AAFP Responds to Obama Administration's 2012 Proposed Budget

Proposal Pays for Two-year SGR Fix, Lays Groundwork for Primary Care

February 23, 2011 03:45 pm News Staff

A two-year extension in Medicare physician payments and funding for training future FPs are some key components for family physicians in the Obama administration's 2012 fiscal year budget. The proposed budget is a "step in the right direction (in) reinforcing the foundation of family medicine and the health care system that it supports," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, in a prepared statement.

HHS Secretary Kathleen Sebelius answers questions about the Obama administration's proposed budget, which offers ways to pay for a two-year extension to the Medicare physician payment program.

The Obama administration released its proposed budget(www.hhs.gov) for the 2012 fiscal year, or FY 2012, on Feb. 14. Among other things, the proposal would pay for a two-year extension of the sustainable growth rate, or SGR, formula and increase money for health professions training programs, including Section 747 of Title VII of the Public Health Service Act. Section 747 is the only federal program specifically for the training of family physicians.

"By proposing a two-year, paid-for moratorium on the mandatory Medicare pay cuts under the sustainable growth rate formula, the budget, if enacted, would provide respite from the monthly and sometimes bimonthly threats to the financial stability of family physician practices," said Goertz.

In addition, he noted, the budget would "lay the groundwork for an eventual legislative solution to the dysfunctional Medicare physician payment formula that has destabilized elderly and disabled Americans' access to the health services they need."

Goertz pointed out, however, that the AAFP has called for a payment differential for primary care, and he expressed disappointment that the budget does not include that request.

The Obama budget actually proposes a 10-year fix to the SGR, at a cost of about $370 billion, according to HHS Secretary Kathleen Sebelius. However, the budget only lays out payment remedies for a two-year SGR fix, which would cost about $62 billion. The administration proposes combining several measures to pay for the two-year fix, including using more generic drugs and recouping money from Medicare and Medicaid efforts to halt fraud and abuse.

Additionally, the administration's proposed budget seeks a $101 million increase for Section 747 of Title VII. "Budget recommendations for Title VII of the Public Health Service Act ... would support innovative programs that would produce an additional 2,500 physicians and physician assistants over five years," said Goertz.

He also praised funding for the National Health Service Corps, or NHSC, in the Obama budget. "The budget proposes National Health Service Corps funding that maintains a commitment to building up the primary care physician workforce -- the underpinning of a high-quality, efficient health care system," said Goertz. "Combined with provisions of the (Patient Protection and) Affordable Care Act, the NHSC budget supports more than 3,000 new medical school loan repayment programs for new physicians who establish practices in underserved areas."

In the final analysis, said Goertz, the administration's budget represents a "recognition that ensuring access to family physicians is integral to better health for Americans and controlled health care spending nationwide."

"Americans depend on primary care physicians for access to immediate care, as well as ongoing and comprehensive health services. ... The administration's FY 2012 budget for health care programs is a step in the right direction to reinforcing the foundation of family medicine and the health care system that it supports."


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