AMA, AAFP, Other Physician Groups Call On Congress to Replace SGR

The AAFP has joined with a number of other physician groups to remind lawmakers that Congress needs to replace the sustainable growth rate, or SGR, formula as part of any comprehensive health care reform plan.

In a Sept. 18 letter to the Senate, written and circulated by the AMA, the signatory groups point out that, "Physicians face a payment cut of over 21 percent on Jan. 1, 2010, and further substantial cuts for the next several years" under the SGR.

The letter is in response to a recently introduced Senate Finance Committee bill that proposes a one-year SGR "patch" but does not replace the formula. According to the letter, which was signed by more than 120 physician organizations, the bill would create a "short-term patch that leaves the underlying problem in place."

"A new Medicare physician payment system is essential for establishing a stable foundation for new payment models and delivery reforms," says the letter. "In fact, retaining the SGR runs counter to delivery reforms now being considered by Congress as part of comprehensive health system reform."

The letter reiterates the AAFP's repeated efforts to replace the SGR.

"We have been going to Washington and urging Congress to replace the SGR for nearly 10 years," said AAFP Board Chair Jim King, M.D., of Selmer, Tenn., in an interview with AAFP News Now. "We have told Congress that the formula used in the SGR is broken and not useable. Congress needs to replace it with a formula that makes sense."

There is widespread agreement among congressional Republicans and Democrats that the SGR needs to be replaced -- a consensus that makes it more likely Congress will eliminate the SGR if it passes health care reform legislation, says King.

In the House, the three committees responsible for drafting health care reform legislation -- Energy and Commerce, Ways and Means, and Education and Labor -- have approved a tricommittee bill (at the THOMAS Web site, type "H.R. 3200" in the search box after selecting "Bill Number") that would eliminate the SGR. But the Senate Finance Committee apparently is having trouble coming up with the money needed to offset a repeal of the SGR, King said.

In the letter, the AAFP and the other physician groups point out that "Initiatives to improve care coordination, promote primary care and preventive services, and encourage wellness initiatives will ultimately generate system-wide savings by avoiding hospitalizations and other costly interventions."

"However, in the short term, the volume of physician visits and other services will increase," the letter says. "If the SGR remains in place, the activities policymakers want to promote will trigger additional payment cuts."

The letter also says replacement of the SGR is necessary to provide a "stable, predictable physician payment system that allows physicians to plan ahead for practice innovations, investments and personnel decisions that are fundamental to improved care coordination and chronic disease management is critical for broad-based health care reform to occur."

"A stable payment system will also help sustain the physician workforce, which policymakers acknowledge will experience severe shortages in the near future, just as the baby boomer generation begins entering the Medicare program," the letter states.

Not surprisingly, the AAFP and other physician groups who signed on to the letter describe the status quo as unsustainable.

"The physician community is willing to embrace significant changes to help reform the Medicare program," says the letter. "This has been demonstrated by our support for comparative effectiveness research, our support for incentive programs to encourage electronic prescribing and the adoption of health information technology, and our efforts to develop new performance measures and appropriateness criteria.

"We are committed to working with Congress to design a new Medicare physician payment system that promotes delivery reforms that will help bend the spending curve for Medicare and other populations."