AAFP Weighs In on House Republicans' Draft Proposal to Repeal SGR

In comments regarding a House Republican draft proposal to eliminate the sustainable growth rate (SGR) formula and reform the nation's Medicare fee-for-service payment system, the AAFP has suggested that the proposal does not go far enough in supporting primary care.

In a letter (7-page PDF; About PDFs) to House Republican leaders, AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., said the AAFP supports the overall direction and intent of the draft proposal, which was released jointly by the chairmen of the House Ways and Means Committee and the Energy and Commerce Committee. However, according to Stream, the draft proposal needs to include adoption of specific payment measures on a permanent basis to bolster the provision of primary care services and enhance patient access to primary care services.

In his letter to the two House committee leaders, Stream said the draft proposal needs to permanently extend two existing provisions in the health care reform law that increase Medicare payments for primary care services: the primary care incentive payment and a Medicaid parity regulation that brings Medicaid payments for certain primary care services and some preventive health services at least in line with Medicare levels. Both provisions are scheduled to expire within the next few years.

The draft proposal is similar to a bipartisan bill introduced by Reps. Allyson Schwartz, D-Pa., and Joe Heck, R-Nev., that would reform the Medicare payment system by eliminating the SGR and taking steps to reward primary care and the adoption of innovative payment models. The bill includes a 2.5 percent annual payment increase between 2015 and 2018 for primary care physicians and other health care professionals, compared to a 0.5 percent annual increase for nonprimary care specialists.

Unlike the Schwartz/Heck bill, however, the Republican draft proposal does not specify a payment increase for primary care physicians and other primary care health professionals, said Stream. Moreover, the draft proposal does not specify any payment amount and does not talk about alternative payment systems.

"At present, more than 1.3 million Medicare beneficiaries have difficulty finding a primary care physician due to a severe shortage," said Stream. "A major factor in the supply of these physicians is the income disparities between primary care and specialty physicians. Nonprocedural services, which constitute the majority of primary care services, are undervalued under the current system, while care coordination is rarely reimbursed at all."

The draft proposal also fails to say how Congress would pay for an SGR fix. The cost of repealing the SGR is the major reason Congress has not replaced the flawed payment system already.

The draft proposal comes shortly after the Congressional Budget Office (CBO) said the cost of repealing the SGR now stands at $138 billion during the next decade, a decrease of $107 billion from the previous CBO score. The revised CBO estimate strengthens arguments for repealing the SGR soon because the cost of doing so could increase during the next several months.