AAFP Joins in Call for More Equitable Medicare Payment System

Groups Want More Predictability, Stability in Payment

October 25, 2012 04:05 pm News Staff

The AAFP and scores of other physician-led organizations are urging Congress to repeal the sustainable growth rate (SGR) formula and instead adopt a series of payment principles that would convert Medicare from a volume-based system to a value-based system promoting innovative payment and care models.

[Piggy bank with bandages]

In a letter to House and Senate committees(6 page PDF), the AAFP and more than 100 other health care organizations describe the SGR as an "enormous impediment to successful health care delivery and payment reforms," that must be eliminated.

However, repealing the SGR is only half of the equation, which is why the organizations have developed a set of driving principles and core elements for moving from the SGR to a higher performing Medicare payment program.

The first principle holds that successful delivery reform is "an essential foundation for transitioning to a high-performing Medicare program that provides patient choice and meets the health care needs of a diverse patient population."

The Academy and the other organizations call on Medicare to "invest (in) and support physician infrastructure that provides the platform for delivery and payment reform." Moreover, Medicare payment updates should "reflect costs of providing services, as well as efforts and progress on quality improvements and managing costs."

In addressing the composition of a new Medicare payment system, the organizations are calling for a system that

  • reflects diversity in physician practices and allows physicians to choose models that work for their unique circumstances;
  • encourages incremental changes via positive incentives and rewards during a defined timetable, instead of using penalties;
  • rewards physicians for savings achieved across the health care spectrum; and
  • ties incentives to a physician's own actions rather than the actions of others or factors beyond their influence.

"Many ground-breaking innovations, including many led by physicians, are already underway in Medicare and the private sector that can guide the development of a new and improved Medicare physician payment system," says the letter.

But the constant threat of SGR cuts makes it difficult for physicians to invest in redesigning their model of care, the letter says. "Each year, patient access to care is eroded because the threat of steep physician payment cuts and last-minute congressional action to avoid these cuts create an environment where new Medicare patients have difficulty securing physician appointments."

The groups call on Congress to "stop this vicious cycle now so that a transitional framework can be put in place that will provide some stability and predictability for seniors and physicians, along with needed delivery innovations."