Scrap SGR Formula for More Equitable Payment System, Academy Tells Congress

July 08, 2011 05:25 pm News Staff

The release of the CMS-proposed Medicare payment fee schedule, which includes a 29.5 percent payment reduction in January, has prompted the AAFP to once again call on Congress to fix the unworkable sustainable growth rate, or SGR, formula.

Congress needs to replace the SGR with a more equitable Medicare payment system that better rewards the provision of primary care services, said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, in a prepared statement. He noted that the SGR has forced Congress to intervene numerous times to block reductions in physician pay for Medicare services. This creates an ongoing cycle of threatened cuts and short-term payment patches, including the looming threat of a January payment reduction.

"Family physicians and our colleagues throughout the medical community find it very challenging to develop workable business plans to maintain the financial viability of our practices under these circumstances," said Goertz. "Congress must reform Medicare payment so that patients know they have access to care when they need (it), physicians can be assured of appropriate payment for their expertise, and the health care system as a whole can anticipate and control costs without shifting those costs onto the shoulders of physicians and other health care providers."

Story Highlights

  • Congress must replace the sustainable growth rate, or SGR, formula with a more equitable Medicare payment system, says the AAFP.
  • Use of the SGR formula has forced Congress to intervene repeatedly to block SGR-mandated reductions in physician pay for Medicare services.
  • In the interim, Congress should impose a five-year extension of Medicare payment updates that includes a 3 percent positive payment differential for primary care physicians who provide primary care services.

Goertz acknowledged that reforming the SGR is a long-term process. It "requires time to develop and implement permanent changes that will improve the quality of care and help restrain growth in health care costs," he noted. However, Goertz added, research has consistently demonstrated that the patient-centered medical home, or PCMH, model meets these goals.

"The PCMH provides not only the first contact a patient has with the health care system, but also the preventive care, management of chronic conditions and coordination of services provided by all the other members of a patient's health care team," he said.

In the AAFP statement, Goertz called for a five-year extension of Medicare payment updates that includes a 3 percent positive payment differential for primary care physicians providing primary care services to help strengthen the primary care physician workforce. "During these five years, Congress should work with the medical community to develop and implement system reform that builds the patient-centered medical home, rewards prevention and wellness, eliminates fragmentation and duplication, and results in a cohesive system of care that prevents unnecessary complications from acute or chronic illness, hospitalizations and other avoidable expenses," Goertz said.

"Only by putting value into the outcome of our services can we ensure better health for our patients and rein in spiraling costs. We call on Congress to end the cycle of threatened cuts and retroactive patches and to permanently reform the Medicare payment system. Only then will our health care system regain the stability that assures our patients access to the care they need, when they need it."


please wait Processing