AAFP, Other Groups Call on Conference Committee to Repeal SGR

Overseas Contingency Operations Funds Could Fill Gap

January 25, 2012 03:55 pm News Staff

The AAFP has joined with several other physician organizations and associations in calling on a House and Senate conference committee to repeal the sustainable growth rate (SGR) formula by using excess funds assigned to Overseas Contingency Operations (OCO) to help pay for the cost of the repeal.

In a letter(3 page PDF) to Rep. Dave Camp, R-Mich., chair of the House Ways and Means Committee and of the congressional conference committee, the AAFP and more than 100 physician organizations and state medical societies said the long-stated goal of Congress to repeal the SGR is now "within reach."

"We urge you to take advantage of (this opportunity) immediately by using excess baseline projections for Overseas Contingency Operations to help offset necessary Medicare baseline changes," the organizations say in the letter.

"Using the OCO baseline as an offset for the accumulated SGR bad debt amounts to 'cleaning the books,' by eliminating one flawed budget gimmick with another and allowing for a more accurate accounting of future government expenditures without increasing the federal deficit," says the letter. "It also provides an opportunity to immediately repeal the SGR and to establish a pathway toward a truly sustainable physician payment system that focuses on improving quality and value for our nation's Medicare beneficiaries."

Congress approved a bill in December that blocked a 27.4 percent SGR reduction scheduled to take effect on Jan. 1. The short-term fix is scheduled to expire on Feb. 29, and the conference committee is meeting in Washington to reconcile differences in House and Senate bills that would postpone the Medicare payment cut for a longer period of time.

In the letter, the AAFP and the other groups point out that according to "current procedures, the CBO (Congressional Budget Office) is required to score mandatory spending according to current law, resulting in massive scheduled cuts of more than $290 billion that are included in the current budget baseline for physician services provided to Medicare beneficiaries."

The letter also notes that the "cost of repealing the SGR gets worse over time."

"In 2005, CBO projected that the cost of repealing the SGR was $48 billion," the letter says. "That cost is now $290 billion and growing rapidly."

The letter warns that "temporary patches that continue to assume even deeper future cuts add to this challenge, regardless of their duration."

In the letter, the AAFP and the other organizations acknowledge that "our nation faces significant fiscal challenges and that Medicare is not immune."

"However, it is impossible to implement common sense programmatic reforms while an immediate and constant threat of massive cuts hangs over the program. Accordingly, we urge you to utilize the opportunity provided to this conference committee to eliminate the SGR permanently."