Payment Reform Woes Generate Letter to Congressional Leaders

A number of organizations, including the AAFP, are persistently working to ensure a 27.4 percent reduction in the Medicare payment rate does not take effect on March 1. As part of their ongoing efforts, these organizations are calling on Congress to approve fundamental Medicare payment reform and thus avert the payment reduction called for by the sustainable growth rate (SGR) formula.

In a Feb. 10 letter to House and Senate leaders, the AAFP and four other organizations -- the American College of Physicians, the Center for Medicare Advocacy Inc., the Medicare Rights Center and AARP -- said Medicare payment reform is long overdue.

"Congress has long recognized that the SGR is a poor method for establishing Medicare payment rates for doctors," says the letter. "In each of the last nine years, it has voted to override the cuts mandated under the formula. New payment methods are needed that maintain access and encourage the delivery of high-quality care. Another temporary patch to avoid the cut scheduled to take place in a few short weeks does not deliver the stability people with Medicare need."

In the letter, the AAFP and the other groups also note that "stop-gap measures have served to increase the size of future cuts, the cost of long-term reform and the insecurity among people with Medicare about their ability to maintain access to their doctors."

During the past several weeks, the AAFP has partnered with other health care organizations and associations in urging Congress to repeal the SGR and approve fundamental Medicare payment reform. On Jan. 31, AAFP leaders also joined their colleagues from other physician specialty organizations to press House and Senate members for a permanent Medicare payment solution during a series of Capitol Hill meetings.

Although Congress approved a bill that postponed SGR reduction scheduled to take effect Jan. 1 in late December, the patch only lasts for two months. Without congressional intervention, the SGR cut will take effect on March 1. Currently, a House and Senate conference committee is meeting to reconcile differences in House and Senate bills that would postpone the Medicare payment cut beyond the March 1 deadline.

The letter, which was sent to members of the congressional conference committee, notes that the committee needs to address the current payment formula to ensure the future of the Medicare program. "Congress has an opportunity to repeal the SGR -- the first step toward enacting a better payment system -- by redirecting money from the Overseas Contingency Operations (OCO) fund the Pentagon says will never be spent," says the letter.

Use of the OCO funding also would "enable Congress to repeal the SGR without requiring beneficiaries to pay more."

"Each of the organizations signing onto this letter supports the use of OCO (funding) in the final package," says the letter. "As we address this problem, we must also ensure we keep the Medicare program affordable for beneficiaries, especially given that today, the average older person spends nearly 20 percent of his/her income on health care."

Moreover, the letter notes, "We also urge a continued focus on physician services, including care coordination provided by primary care physicians, which are key to achieving the goals of better care, better health and lower costs."