Congress Must Block Payment Cuts, Say AAFP, Other Health Care Groups

September 17, 2012 03:55 pm News Staff

The AAFP has joined with more than 120 other health care organizations in calling on Congress to pass legislation that would block Medicare physician payment cuts scheduled to take effect in early January as a result of the sustainable growth rate (SGR) formula and the Budget Control Act's sequestration provision.

In a Sept. 12 letter(4 page PDF) to House and Senate leaders, the AAFP and the other health care organizations strongly urge Congress "to work diligently during the fall to reach a bipartisan agreement to pass legislation nullifying the Medicare physician payment cuts called for under the BCA's (Budget Control Act's) sequestration provision and the SGR formula."

The SGR calls for a 27 percent cut in the Medicare physician payment rate on Jan. 1, while the BCA's sequestration provision would cut the Medicare payment rate by 2 percent on Jan. 2 unless Congress acts to block the reductions.

"Sequestration also will result in across-the-board cuts to a wide range of essential programs to ensure high quality and accessible patient care," says the letter, which originated with the AMA. "We believe that Congress should not abdicate its responsibility to deliberate and make policy decisions on what is important and needs to be funded."

The Budget Control Act of 2011 imposed caps on discretionary programs to reduce funding by more than $1 trillion during the next 10 years. That act also created a Joint Select Committee on Deficit Reduction to propose legislation to reduce deficits by another $1.2 trillion, and it put in place a sequestration provision to encourage the committee to reach a budget agreement.

However, the Joint Committee was unable to reach a budget agreement, which triggered across-the-board payment cuts that are scheduled to take effect in January. This includes the 2 percent reduction in the Medicare payment rate and might mean even greater cuts to discretionary federal spending programs such as Title VII primary care training grants.

"The combination of a sequestration cut and looming SGR payment cut would not only impede improvements to our health care system, it could lead to serious access to care issues for Medicare patients as well as employment reductions in medical practices," the letter states.

According to the letter, the BCA's Medicare cuts "could not occur at a worse time."

"Medicare physician payments have been nearly frozen for a decade, while the cost of caring for patients has increased by more than 20 percent," the letter says. "Congress still has not revealed a clear path for addressing the 27 percent cut in 2013 called for by the Medicare SGR formula."

The letter also points out that physicians face present and future financial penalties if they do not successfully participate in a number of Medicare programs, including electronic prescribing, the electronic health record meaningful use program, the Physician Quality Reporting System and the value-based modifier program.

The AAFP and the other organizations reaffirmed their commitment to work with Congress "on the shared goal of delivery and payment reform in the Medicare program to promote high-quality, high-value and better-coordinated care to our patients."

"As we approach the new year, physicians are faced with the discouraging prospect that our shared goal will be undermined due to the increasing level of uncertainty in the Medicare physician payment system. Congress has a responsibility to ensure that sufficient funding is available to sustain adequate payment for medical services provided to our nation's seniors and disabled populations under the Medicare program.

"The status quo is unsustainable and will do considerable harm to the Medicare program, as well as the broader health care delivery system."