Academy Rallies Support for Medicare Payment Measure

Legislation Would Provide a Reprieve From the SGR Until January 2014

May 20, 2010 03:25 pm News Staff

The AAFP is throwing its support behind legislation that would provide a positive update in the Medicare physician payment rate for the next three-and-a-half years, giving physicians a longer-term reprieve from the continuous cycle of payment cuts called for by the sustainable growth rate, or SGR, formula. Without congressional intervention, physicians face a 21.3 percent reduction in the Medicare payment rate on June 1.

"While we all agree that Congress should permanently address the hopelessly flawed SGR formula that continues to threaten the stability of the Medicare program, the long-term solution is still not available," said AAFP Board Chair Ted Epperly, M.D., of Boise, Idaho, in a prepared statement. "As we work on finding this solution, we appreciate the bipartisan, bicameral commitment of Congress to make sure the disruptive cuts don't go into effect."

Epperly also sent a letter to congressional members urging support for the physician payment amendment to legislation currently being considered in the House. That legislation, H.R. 4213, is known as the Tax Extenders Act.

"The measure contains a provision that will help provide stability to the physician payment formula until January 2014," said Epperly in the letter. "In addition, it would revise the way physicians are paid by Medicare to recognize an increasingly important role for primary care physicians in the delivery of efficient, effective health care."

The measure would provide a 1.3 percent update in the Medicare physician payment rate on June 1, followed by an additional 1 percent update on Jan. 1, 2011. In 2012-2013, the bill would use two payment targets contained in another bill, H.R. 3961, which passed the House last November -- one would provide a conversion factor based on the gross domestic product, or GDP, plus a 2 percent increase for primary care and preventive health services, and the other would apply a conversion factor of GDP plus a 1 percent.

In addition, the legislation would prevent payments from falling below current levels between 2012 and 2014, in the event that the conversion factor would fall below zero.

In 2014, the payment formula would revert back to the SGR, creating a physician payment reduction of 37 percent. House and Senate leaders are expected to act before the end of 2013 to block such a massive cut, but replacing the SGR with a new payment formula would cost, at a minimum, some $300 billion.

Most of the opposition to the proposal comes from the Senate, which has raised objections because the payment formula is not paid for with reductions in spending or increases in revenues. As a result, the AAFP is encouraging members to contact their senators to tell them to ensure the pending 21 percent cut does not go into effect on June 1.

In his prepared statement, Epperly said the new payment provision in H.R. 4213 "recognizes the importance of allowing for growth in the services provided by primary care physicians, especially if we are to respond to the increased demand for these services as more Americans get covered by insurance."

"The data are clear that health care based on primary care will be both more efficient and more effective," said Epperly.

In his letter to Congress, Epperly said the legislation "builds on the recent efforts of Congress to recognize the value of primary care and provides stability of payment for several years."

The SGR has triggered steep reductions in the Medicare payment rate during the past several years, and even though Congress has continually intervened at the last minute to block the reductions, the ongoing threat of cuts has created a great deal of anxiety in the physician community.

"While we are disappointed that the bill does not provide the permanent payment reform that we and the physician community have been seeking, it takes a step in the right direction," said Epperly. "We will continue to work with Congress to find a permanent payment formula that includes the precedent of improved and differential payment for primary care physicians."