As AAFP Rallies Members, Senate Considers Yearlong SGR Patch

As the AAFP continues to rally support for a one-year Medicare payment patch, the U.S. Senate is focused on passing a measure that would provide an extension of the current payment rate through the end of 2011, thus nullifying a 25 percent Medicare payment cut scheduled to take place Jan. 1.

The AAFP sent an Action Alert to AAFP members on Dec. 7 urging them to e-mail their congressional representatives in support of a one-year payment patch. On Dec. 8, Senate leaders introduced the Medicare and Medicaid Extenders Act of 2010, H.R. 4994, which will extend the current Medicare payment update through 2011. If the Senate passes the bill, the House is expected to approve it next week, giving physicians a reprieve from the continuous cycle of payment cuts called for by the sustainable growth rate, or SGR, formula. If adopted by Congress, H.R. 4994 will mark the fifth and longest physician payment patch enacted this year.

In its call to action to members, the AAFP explained that House and Senate leaders are negotiating a yearlong extension of the payment rate in an effort to provide time for the physician community and Congress to establish a three- to five-year SGR patch that could include a positive differential payment for primary care physicians.

According to the Action Alert, even if AAFP members have sent letters to their congressional representatives before, it is important to do so again. "Congress needs to hear support for a 12-month extension from family physicians," says the Academy.

Congress passed a one-month Medicare payment extension in late November that temporarily blocked a 23 percent payment reduction scheduled to take effect on Dec. 1. Without congressional intervention, physicians will face a reduction of nearly 25 percent on Jan. 1.

The legislation before the Senate contains other measures, as well, including a provision that addresses the Medicare work geographic adjustment floor. According to current law, the Medicare fee schedule is adjusted geographically for three factors -- physician work, practice expense and medical malpractice insurance -- to reflect differences in the cost of resources needed to produce physician services. The provision in the bill would extend the existing floor on the physician work index through Dec. 31, 2011, according to a bill summary (3-page PDF; About PDFs) released by the Senate Finance Committee.

The total cost of the legislation is estimated to be $19.2 billion during the next 10 years. The cost primarily will be financed by changes in the health care reform law that would recoup more money from consumers who purchase insurance through state-based health insurance exchanges starting in 2014.