The sustainable growth rate that determines Medicare physician payments "makes no sense," but it is up to Congress to change the system. That was the word from Herb Kuhn, director of the CMS Center for Medicare Management, who spoke here April 20 during the Family Medicine Congressional Conference, an annual effort by FPs to beef up on legislative issues and contact Congress about them.
Kuhn acknowledged that, without congressional action, physicians would see a 4.3 percent reduction in their Medicare payments next year. But whether lawmakers will step in to resolve the issue depends on their perspective on the 2004 spike in payments to physicians.
The apparent stalemate over SGR drew a pointed response from FPs.
"Is CMS going to allow a situation where we have a 26 percent reduction in fees while we have a 20 percent increase in overhead over the next five years?" asked AAFP President-elect Larry Fields, M.D., of Ashland, Ky. "We have serious issues that we're dealing with today, and I don't see anything coming out that is going to address these."
Kuhn agreed the SGR was illogical, but added that the system saw a 15.2 percent growth in physician payments last year. Moreover, Medicare beneficiaries already will pay 17 percent more for their Part B premiums -- which cover office visits, procedures, and lab and other tests -- next year, up from the 13.5 percent hike in 2004. Revising the physician payment to replace the 4.3 percent reduction would "impact their (patients') Part B premiums. It would add another $1.50 to their premiums," said Kuhn.
"That's unsustainable. We can't keep that up," he said, adding, "We're as open as possible to figuring out how to deal with these problems."
Medicare physician reimbursement issues are "about a formula that doesn’t work," Rosemarie Sweeney, AAFP vice president for socioeconomic affairs and policy analysis, said after the meeting. "And they (CMS) agree with us."
During his presentation, Kuhn also reviewed efforts to trim Medicare expenditures by focusing benefits on preventive care rather than on intervention. He cited the recently implemented "Welcome to Medicare" physical exam for new beneficiaries and the Part D pharmacy benefit. These and other efforts will trim Medicare expenditures, he said.
"We can't solve the cost problem until we update the benefits," he told conference participants. "We have many opportunities to work together."
Among those areas: pay-for-performance policies that reward good medicine and the Medicare Health Support pilot projects that test innovative chronic care management systems.
