Medicare Physician Payment

Currently, physicians are paid for their services to Medicare patients by means of the flawed Sustainable Growth Rate (SGR) formula.The SGR produces negative payments based on unrelated economic factors, not on the health care needs of Medicare beneficiaries or physicians’ costs of providing care.

For over a decade, Congress regularly has found it necessary to override this dysfunctional formula, a testimony to its inappropriateness. Congress must now do so again to prevent steep cuts to Medicare physician payment rates and corresponding access problems for our nation’s seniors.

The AAFP, therefore, calls on Congress to pass a multi-year extension of the SGR with differential payment for primary care while physician organizations and policy centers collect data on the various payment model experiments like the Patient-Centered Medical Home and Accountable Care Organizations. We recommend using the resulting data to develop a new and effective physician-endorsed payment model.