Letter Outlines Academy's Priorities

AAFP Board Chair Calls for White House, Congressional Action on Key Issues

December 12, 2012 02:40 pm News Staff

The AAFP is urging Congress and the White House to protect and preserve the nation's primary care infrastructure during the current budget negotiating process by acting on five core principles that are vital to the current and future viability of primary care and family medicine.


Congress and the administration are engaged in intense negotiations about the Budget Control Act's (BCA's) sequestration provision, which calls for across-the-board-payment cuts starting in January, including a 2 percent Medicare physician payment cut. At the same time, physicians are facing a 26.5 percent reduction in the Medicare physician payment rate on Jan. 1 as a result of the sustainable growth rate (SGR) formula. In addition, a series of tax cuts is set to expire at the end of the year.

In a Dec. 11 letter(3 page PDF) to congressional leaders and the White House, AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., urged Congress to take action on five core principles:

story highlights

  • The AAFP is urging Congress and the White House to protect and preserve the nation's primary care infrastructure by taking action on five key issues.
  • In a Dec. 11 letter to congressional leaders and President Obama, the AAFP explains how the issues affect primary care and family medicine and the role these specialties play in assuring patient access to care.
  • As a first step, the AAFP is calling on Congress to block a pending 26.5 percent reduction in the Medicare physician payment rate.
  • prevent the implementation of scheduled cuts in Medicare physician payments,
  • do not repeal the Medicare payment increase for primary care services to pay for a year's extension of the SGR,
  • maintain current funding for graduate medical education,
  • stop the damaging across-the-board reductions produced by the BCA's sequestration requirements, and
  • keep intact the health insurance subsidies for individuals and small businesses that purchase health plans through state or federal health insurance exchanges.

"The most important issue at this time, as it has been for more than 10 years, is the flawed formula used to determine the Medicare physician payment rates," said Stream in the letter. "Every year since 2001, the SGR has meant that physicians face unacceptable cuts in the Medicare physician fee schedule, and every year, usually at the last minute, Congress has had to override the formula's pending reductions in payment rates."

Stream stressed that the formula doesn't work and must be replaced. The SGR formula "is built on a fee-for-service system that pays only for the volume of services offered rather than the value of health care delivered," said Stream. "It promotes fragmentation and duplication of services rather than coordination and efficiency."

Moreover, the SGR undermines physicians' adoption and implementation of health care system priorities such as electronic health records and quality improvement and pay-for-performance programs, as well as compliance with policies governing these initiatives, Stream said.

He pointed out that the AAFP and other primary care physician organizations favor a blended payment system that incorporates fee-for-service and other payment modalities to better coordinate and align services and support innovative care models, such as the patient-centered medical home.

"However, if Congress does not have sufficient time to legislate an appropriate replacement payment system before the end of the year, the AAFP strongly recommends that you take the appropriate steps to prevent the cuts from being implemented," said Stream. "Ideally, you would accomplish this through a period of mandated stable payments, with primary care physicians providing primary care services eligible for a payment rate at least 2 percent higher than that for nonprimary care physicians."

This is the approach taken by the Medicare Physician Payment Innovation Act, a bill introduced by co-sponsors Rep. Allyson Schwartz, D-Pa., and Rep. Joseph Heck, D.O., R-Nev., and supported by the AAFP, Stream noted.

The Republican-controlled House, meanwhile, has proposed paying for a yearlong extension of the Medicare physician payment rate by eliminating a provision in the health care reform law to bring Medicaid payment rates for primary care services at least up to the level of Medicare rates for the next two years. In the letter, Stream reiterated the AAFP's strong opposition to the GOP proposal, which would reduce patient access to Medicaid services.

"Patients will face obstacles in connecting with a patient-centered medical home and will be forced to rely on expensive episodic, acute-care services provided in other settings, such as hospital emergency rooms," said Stream.