AAFP Statement: 2014 Proposed Medicare Physician Fee Schedule

Positive Steps Overshadowed by Looming Threat of SGR Cuts

Tuesday, July 9, 2013


Statement attributable to:
Jeffrey Cain, MD, President, American Academy of Family Physicians

LEAWOOD, Kan. — “If the United States is going to achieve meaningful health system reform, we must have meaningful Medicare physician payment reform. In its proposed 2014 Medicare physician fee schedule, CMS made good steps toward that goal by adjusting misvalued codes and proposing two new codes for complex chronic care management.

“Within the constraints of the dysfunctional sustainable growth rate formula that dictates Medicare physician payment, the proposals are encouraging. But they can go only so far because the pending SGR cuts undermine CMS’ efforts. The ultimate result: a continued threat to Americans’ access to primary medical care.

“Largely as a result of adjustments to misvalued codes, CMS would raise payment for evaluation and management services by 2 to 3 percent. CMS estimates that family physicians would realize a 1 percent overall increase in payment for their medical expertise, but only if Congress averts the pending SGR cuts scheduled to occur on January 1, 2014.

“Such changes demonstrate CMS’ intent to support primary care through policies that promote comprehensive and continuous care. But, in light of the SGR’s mandate that CMS slash Medicare physician payment by 24.4 percent, these incremental increases do nothing to sustain primary medical care, much less build the primary care physician workforce. The SGR-required payment cut shines a bright light on the need for Congress to replace this dysfunctional system.

“If Congress fails to avert this disastrous pay cut before 2014, family physicians once again will be forced to choose between caring for Medicare beneficiaries at a significant financial loss or ending their participation in Medicare. Worse, the impact of a 24.4 percent Medicare cut will snowball as commercial insurers, who often base their payment on the Medicare rate, reduce their reimbursement to physicians as well. An American Academy of Family Physicians analysis of the proposed cut shows the typical family physician would lose a total of $89,763 and a three-physician practice would lose $269,289 in revenue next year. No small business can sustain itself in the face of such drastic revenue reductions.
“The AAFP calls on Congress to repeal the SGR by passing the Medicare Physician Payment Innovation Act (HR 574). The bill repeals the SGR, establishes annual, positive updates on physician payment, provides for a transition to a sustainable payment system and helps better recognize the value of primary medical care.

“Congress has eloquently expressed its concern about the dire shortages of primary care physicians and other professionals. But when it comes to changing policies and making an investment in building the primary care physician workforce, their actions are woefully inadequate.

“It’s time to walk the walk. We again call on Congress to repeal the flawed sustainable growth rate formula that imposes annual threats to elderly and disabled patients’ access to needed care.”

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Founded in 1947, the American Academy of Family Physicians represents 136,700 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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