Organizations Fight to Repeal SGR, Call for New Payment Methods

The AAFP and several other groups have joined with the nation's largest consumer advocacy organization -- the AARP -- in calling for a repeal of the sustainable growth rate (SGR) formula in favor of enactment of a more equitable Medicare payment system.

In a letter (2-page PDF; About PDFs) to House and Senate congressional leaders, the AAFP, the AARP, and four other physician and Medicare advocacy groups say that the need for payment reform is overdue and that "addressing the current flawed payment formula is a necessary and far-sighted course of action."

"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 fund the Pentagon says will never be spent," states the letter, which also is signed by the American College of Physicians, the American Geriatrics Society, the Center for Medicare Advocacy and the Medicare Rights Center.

The SGR has called for steep reductions in the Medicare physician payment rate during the past 10 years -- reductions averted only by last-minute action by Congress. Physicians face a 26.5 percent reduction in the Medicare physician payment rate on Jan. 1 unless Congress acts to block the cut. As the Jan. 1 deadline looms, the AAFP and other organizations have stepped up pressure on Congress to repeal the SGR and to put in place new payment methods to maintain Medicare access and encourage the delivery of high-quality care.

"Congress has long recognized that the SGR is a poor method for establishing payment rates for health care providers paid under the Medicare physician fee schedule," says the letter. "In each of the last 10 years, it has voted to override the cuts mandated under the formula. These stopgap 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."

The AAFP and the other organizations call on Congress to pass the longest possible SGR fix to allow Congress time to fix the situation permanently. But they also stress that it is important to keep Medicare affordable for beneficiaries.