AAFP Statement: Extension of Medicare Payment Prevents Crisis but Fails to Solve the Problem

Friday, February 17, 2012

Statement attributable to:
Glen Stream, MD, MBI
American Academy of Family Physicians

“Congress has missed an important opportunity to permanently solve the Medicare physician payment crisis, ensure health security for elderly and disabled Americans, and enable physicians to develop the long-term plans needed to redesign their practices into patient-centered medical homes.

“By passing a 10-month extension of Medicare physician payment, Congress failed to capitalize on the Overseas Contingency Operations funds that could have offset the cost of repealing the sustainable growth rate formula that is crippling the system. Each temporary fix merely postpones — and worsens — the inevitable. By the end of this year, the law will require Medicare to slash physician payment by 32 percent. Beginning in 2013, the cost of a permanent fix will skyrocket from nearly $316 billion today to $335 billion.

“The continued threat of deeper cuts to Medicare physician payment is the tip of the iceberg. Private insurers and TRICARE — which covers members of the military and their families — base their physician payment on the Medicare rate. When Medicare threatens to slash reimbursement, the private sector follows. That reality underlies recent survey data showing that a 25 percent Medicare pay cut would force more than one in 10 family physicians to close their doors. No business can remain viable when forced to work in such an uncertain and shifting revenue environment.

“Temporary extensions do not solve the problem, and Congress should not pretend they are resolving their constituents’ health insecurity with such patches. A permanent solution must be put into place. Congress must develop a Medicare payment plan that rebalances our health care system on primary care, narrows the gap between primary care and subspecialties with at least a 3 percent positive differential for primary care physicians, and ensures health access stability for the elderly and disabled.

“End the charade. Give Americans a solution. Repeal the SGR. Replace it with a system that stabilizes Medicare with predictable, sustainable payment that builds on primary medical care and thereby improves outcomes and helps control costs.”

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Founded in 1947, the American Academy of Family Physicians represents 134,600 physicians and medical students nationwide, and it is the only medical society devoted solely to primary care.

Family physicians conduct approximately one in five of the total medical office visits in the United States per year – more than any other specialty. Family physicians provide comprehensive, evidence-based, and cost-effective care dedicated to improving the health of patients, families and communities. Family medicine’s cornerstone is an ongoing and personal patient-physician relationship where the family physician serves as the hub of each patient’s integrated care team. More Americans depend on family physicians than on any other medical specialty.

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