Energy and Commerce Committee Seeks Academy's Input on Medicare Physician Payment Reform

As the effort to eliminate or reform the sustainable growth rate, or SGR, formula continues, the House Energy and Commerce Committee is asking the AAFP and other organizations to submit ideas and proposals for reforming the system. Specifically, the committee is asking the organizations for ideas on how to reform the Medicare physician payment system to reduce spending, pay physicians and other providers fairly, and provide a fair value for services.

The committee, which plans to hold a hearing on the issue in early May, sent a bipartisan letter (2-page PDF; About PDFs) to the AAFP and 50 other organizations asking them to submit ideas and suggestions that can be translated into legislative proposals.

"The current payment system for physician services in Medicare is a major threat to the integrity of the program and the ability of America's seniors to access quality health care," says the committee in the letter to the AAFP. The SGR has called for steep reductions in Medicare payment rates during the past several years, forcing Congress to intervene at the last minute to block the cuts. Without another congressional fix by the end of this year, physicians are facing a 29.5 percent reduction in payments on Jan. 1, 2012.

However, according to the letter, "The House Energy and Commerce Committee is determined to achieve a permanent, sustainable solution to the Medicare physician payment problem this year."

The letter adds, "The problems preventing reform of the payment system are twofold: a budgetary hole of $300 billion and a lack of consensus among experts and stakeholders about what kind of payment system should replace the Medicare physician fee schedule. It is the latter question on which we invite your comment."

The committee stresses in its letter that, "Unless we begin the process of developing a long-term solution, we will once again be faced with the unwanted choice of extending a fundamentally broken payment system or jeopardizing access for Medicare beneficiaries."

"We cannot let either happen," says the letter.

According to AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, the committee's request for proposals demonstrates that it is "at least taking a positive step toward a longer-term, if not a permanent (payment) solution."

The AAFP has not yet formally responded to the committee's request, but the Academy adheres to a set of principles that will be used to frame that response. For example, the AAFP supports Medicare payment reform that, at the very least, recognizes and attempts to reduce the discrepancy in payment between primary care and nonprimary care physicians. It also supports a blended payment model to better support and reward care coordination and the patient-centered medical home.