AAFP Applauds House Passage of Bill to Fix Broken Payment Formula

The AAFP has hailed House passage of a bill that would provide a permanent fix for the sustainable growth rate, or SGR, formula as a victory for both Medicare patients and their physicians.

"This legislation builds a good foundation on which comprehensive, meaningful and sustainable health care reform can be built and assures Medicare patients that they will get the care they need, when they need it, from the most appropriate physician," said AAFP President Lori Heim, M.D., of Vass, N.C. in a prepared statement.

The House passed H.R. 3961, the Medicare Physician Payment Reform Act of 2009, (at the THOMAS Web site, type "H.R. 3961" in the search box after selecting "Bill Number") on Nov. 19 by a vote of 243-183. The measure would replace the SGR formula with physician updates that are tied to inflation rather than to specified targets. If enacted, the bill would block a 21.2 percent reduction in the Medicare physician payment rate scheduled to go into effect Jan. 1.

H.R. 3961 also would eliminate the accounting debt accumulated by the SGR formula, thus removing the primary obstacle in preventing the adoption of a reasonable formula to determine physician payment under Medicare. The bill passed with no Republican votes; 11 Democrats also voted against the legislation. According to the Congressional Budget Office, if enacted, the legislation would cost about $210 billion during the next 10 years.

Last month, Senate leaders were unable to bring to the floor a similar bill that would have permanently fixed the SGR formula. House passage of H.R. 3961 means House members are likely to include an SGR fix in any negotiations with the Senate in a final health care reform bill, according to analysts.

"This legislation will help create stability within the Medicare physician payment system and reduce physicians' annual uncertainty of whether their medical practices can afford to continue to accepting Medicare beneficiaries," said Heim in the prepared statement. "By replacing the flawed formula on which Medicare physician payment is now based with a system that more appropriately pays for patient evaluation and management services, H.R. 3961 promotes comprehensive, coordinated care that's been shown to improve patients' health and help rein in costs."

Heim, in an interview with AAFP News Now, said the SGR was designed to try to control costs. "Obviously, it did not, and so we need to look to a solution that is going to work for both patients and physicians," she said.

Heim also lauded the AAFP's efforts in promoting passage of H.R. 3961. The AAFP issued an Action Alert on Nov. 12, asking AAFP members to contact their representatives and urge them to support H.R. 3961.

In addition, Heim and other AAFP leaders and members have explained the importance of the legislation for patients and physicians during a series of meetings with legislators and their staff members.

"We have been very active in explaining to congressional members the importance of this bill for patients and physicians and the importance of finally fixing the SGR as opposed to continually just putting a Band-Aid on it," Heim said.