Latest Deficit-reduction Plan Includes Repeal of SGR

The AAFP and 16 other physician groups have moved quickly to acknowledge the proposed elimination of Medicare's sustainable growth rate, or SGR, formula in a bipartisan deficit-reduction plan put forth by six key senators.

In a widely circulated letter, the physician organizations commended the Senate's bipartisan "Gang of Six" for recognizing that reform of the Medicare physician payment formula -- specifically a full repeal of the SGR -- must be included in deficit-reduction legislation.

The physician groups that signed the letter, including the AAFP, represent more than 700,000 physicians.

The Senate plan, which was proposed by Sens. Mike Crapo, R-Idaho.; Saxby Chambliss, R-Ga.; Tom Coburn, R-Okla.; Richard Durbin, D-Ill.; Mark Warner, D-Va.; and Kent Conrad, D-N.D., instructs the Senate Finance Committee to permanently reform or replace the SGR and fully offset the costs with health savings -- although the plan does not identify the source of those savings. At the same time, the proposal vows to "maintain the essential health care services that the poor and elderly rely upon."

The estimated cost of an SGR repeal is $298 billion.

Kevin Burke, director of the AAFP Division of Government Relations, says the language in the proposal is still somewhat vague. "We'll need to see more details before we can consider whether to recommend supporting the proposal as a whole," said Burke.

Nevertheless, the proposal represents the only viable, bipartisan debt-reduction plan that specifically includes repealing or permanently replacing the SGR. "The value of having the Gang of Six proposal include repeal of the SGR is itself a positive step toward a better payment model," Burke said.

In the letter, the AAFP and the other physician organizations said they "look forward to learning more details of the proposal in the coming days and continuing to work with the many members of Congress from both chambers and both parties who are committed to resolving this issue once and for all."