Deficit-reduction Plan Falls Short, Says AAFP President

Legislation Fails to Address SGR, Could Threaten Patient Access to Care

August 03, 2011 07:05 pm News Staff

The AAFP has warned Congress and the White House that a recently enacted deficit-reduction plan could worsen patient access to care by reducing Medicare payments to physicians and by failing to address the sustainable growth rate, or SGR, formula.

Congress passed and President Obama signed the deficit-reduction plan on Aug. 2. In a prepared statement, AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, said, "The debt ceiling/deficit reduction plan offers a potentially false promise to patients. It guarantees benefits, but by ignoring Medicare physician payment issues, it potentially denies the actual medical care these benefits cover."

The legislation calls for $900 billion in immediate spending cuts. In addition, it requires $1.5 trillion in reductions in the deficit during the next 10 years.

The legislation also creates a new bipartisan committee on deficit reduction to make recommendations on the second round of cuts and raising revenues. The legislation requires the bipartisan committee to introduce a plan for achieving the cuts and any increase in revenues by Nov. 23. Congress would have until Dec. 23 to vote on the plan. If the government fails to enact the plan by the Dec. 23 deadline, the legislation mandates $1.2 trillion in across-the-board cuts from all federal spending with the exception of Medicaid, Social Security and Medicare benefits.

Story Highlights

  • The AAFP is warning Congress and the White House that a recently enacted deficit-reduction plan could worsen patient access to care.
  • Although the plan could result in billions in savings, reducing Medicare payments creates serious implications for family physicians.
  • Family physician practices often operate on very tight margins, and this plan could threaten their ability to remain open to provide care for patients.

Although the plan could achieve billions in savings by reducing Medicare payments to physicians and other providers, that creates some serious implications for family physicians whose practices often operate on extremely tight margins and whose ability to remain open and provide care for patients will be threatened, according to Goertz.

"The AAFP appreciates the proposal's preservation of Medicaid funding and Medicare benefits, but it still poses a grave threat to Medicare patients' ability to get appointments with their physicians," said Goertz.

In addition, the legislation does not address the SGR payment formula, which has called for steep reductions in the Medicare payment rate during the past several years. Unless Congress intervenes, the SGR formula will mandate a 29.4 percent cut in the Medicare physician payment rate on Jan. 1, driving some family physicians out of business and forcing others to limit or stop accepting new Medicare patients altogether, according to Goertz.

In his statement, Goertz cited data from a 2010 AAFP study showing that a 25 percent Medicare pay cut -- 4 percent less than what is required on Jan. 1 -- would drive 13 percent of family physicians out of business. The study indicates that "more than seven in 10 family physicians would be forced to limit the number of Medicare patients they can accept, and nearly 62 percent will be forced to stop accepting new Medicare patients," Goertz said.

However, the loss of these practices goes far beyond creating serious access problems for patients, particularly in rural and underserved areas that already struggle to find needed medical care, according to Goertz. Family physicians also generate an average $1.3 billion in economic activity in their states, he said. If these practices close, that could result in a significant loss of revenue and jobs in communities across the country.

"If our health care policy fails to ensure the financial viability of physician practices, preserving benefits does little good. In the end, many patients in need will go without care because there will be no one to see them," said Goertz.