Medical groups urge SGR fix in fiscal cliff compromise

The Alliance of Specialty Medicine on Monday joined a number of other medical organizations as it called on Congress to permanently fix the flawed sustainable growth rate (SGR) Medicare payment formula as part of any legislation designed to avert the fiscal cliff.

In a letter sent to congressional leaders yesterday, the alliance of 13 separate specialty medicine organizations said that finding a replacement for the SGR should be “on your list of priority provisions that must be acted on by the end of the year.”

“As you know physicians treating Medicare beneficiaries face an insurmountable cut of 26.5 percent in their reimbursements beginning in 2013, not to mention the multitude of other financial penalties related to Medicare’s improvement initiatives and an additional 2 percent sequestration pay cut,” the letter stated. “As a result, physicians are reconsidering their participation in the Medicare program, limiting the number of Medicare patients they see, or leaving the practice of medicine altogether.”

 

But with such delicate negotiations aimed at averting the fiscal cliff – the automatic across-the-board spending cuts, coupled with the expiration of lower income tax rates – it seems unlikely the legislation would include any so-called “doc fix” for SGR. Since enacted more than a decade ago, the SGR has only been allowed to cut doctors’ Medicare payment rates once – in 2002. Every year since then, Congress has regularly over-ridden the cuts. The 26.5 percent cut slated for 2013 under SGR is a cumulative figure based on these yearly delays.

Other medical organizations have also recently called on Congress to repeal the SGR, but have also included a level of pragmatism in their recommendations. Last week, the American Academy of Family Physicians contacted congressional party leaders John Boehner (R-Ohio) and Nancy Pelosi (D-Calif.) with five priorities it would like included in the fiscal cliff package, two of them directly related to the SGR.

As it has each year, the AAFP letter urged that the SGR spending cuts not be implemented for 2013. In addition, it also asked Congress not to pay for the “doc fix” by repealing recent provisions in health reform that will raise Medicaid payment rates for primary care services to equal those paid by Medicare.

“The most important issue at this time, as it has been for more than ten years, is the flawed formula used to determine the Medicare physician payment rates,” the AAFP letter stated. “The formula clearly does not work and it must be replaced. It is built on a fee-for-service system that pays only for the volume of services offered, rather than the value of the health care delivered.”

As it has for the last six years, AAFP called for a long-term fix to the SGR that is based on a blended payment system, which would be included if the Medicare Physician Payment Innovation Act (HR 7505), were to pass.

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