Efforts to Repeal, Replace SGR Provide AAFP Key Advocacy Opportunities

June 13, 2013 06:00 pm James Arvantes

In a departure from their typical last-minute sustainable growth rate (SGR) formula patch, members of Congress seem to be focusing on repealing and replacing the SGR formula before the end of the year, and several measures are in the works that the AAFP is monitoring and responding to as appropriate.

[AAFP Advocacy]

The current movement on the SGR likely is in response to an announcement from the Congressional Budget Office (CBO) that the cost of repealing the SGR has fallen to $139 billion, a decrease of $107 billion from a previous CBO score, which makes repealing the SGR now a relative bargain.

The latest effort from Congress is a draft Medicare reform proposal put forth by the House Energy and Commerce Committee. In response to a request for comments, AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane, Wash., sent a June 10 letter(9 page PDF) that called for strengthening and expanding the role of primary care in the nation's Medicare system. This would entail the creation of a new category of evaluation and management (E/M) codes to reflect the intensity and complexity of primary care office visits, as well as implementation of various incentives to encourage adoption of the patient-centered medical home (PCMH) model.

Story Highlights
  • As Congress works on possible solutions to repealing and replacing the current Medicare payment system, the AAFP is providing guidance to various committees.
  • The latest effort on the sustainable growth rate comes from the House Energy and Commerce Committee, which asked the AAFP to respond to a number of queries on Medicare payment legislation.
  • As part of the reform process, the AAFP is calling for a new category of evaluation and management codes that would reflect the intensity and complexity of primary care office visits.

It also includes incentivizing patient use of the PCMH by eliminating out-of-pocket expenses for services provided through the PCMH, said Stream. "Payment reform needs to include revisions to fee-for-service, especially higher payment rates for primary care and payment for the coordination of care."

Stream also called for immediate enactment of a blended payment model to support care coordination and other activities that are an inherent part of primary care. "Real payment reform, if intended to support a primary-care-based delivery of health care, should include a per-patient, per-month payment for the management of care and a payment for quality improvement, as well as a fee-for-service payment that fairly compensates physicians for acute-care services."

Stream urged Congress to take other steps, as well, including the enactment of medical liability reform and workforce training reform to support primary care training in nonhospital settings.

The draft proposal put forth by the Energy and Commerce Committee marks the third time in the past few months a congressional committee has issued some type of language to repeal and replace the SGR formula. In each instance, the respective House and Senate committees have reached out to the AAFP to seek input on how to best structure a more equitable Medicare payment and delivery system.

[SGR reform chart]

And, in each instance, the AAFP has responded quickly and forcefully to the informational requests, delivering a reform message that resonates on Capitol Hill and puts the Academy in a position to shape and perhaps even drive fundamental changes in the Medicare program.

"Both the House and Senate are looking at ways to decrease Medicare costs," said AAFP President Jeff Cain, M.D., of Denver, in an interview with AAFP News Now. "All of the proposals are looking to promote payment for value over volume in some way, shape or form, and to accomplish that, you need to have more effective and better primary care."

Thus far, however, only one House committee -- the Energy and Commerce Committee -- has issued a "discussion draft" of legislative language to eliminate the SGR while reforming the Medicare payment and delivery system. Two other committees -- the House Ways and Means Committee and the Senate Finance Committee -- still are in the drafting stage.

The AAFP has provided feedback on each of the committees' inquiries about parts of the drafts, setting forth certain core principles that include a period of payment stability, an increase in rates for primary care services, and a fundamental shift to transition Medicare from a volume-based to a value-based health care system through the PCMH and other primary-care-based models of care delivery.

The AAFP also has expressed support for H.R. 5707, the Medicare Physician Payment Innovation Act of 2013, the only bipartisan Medicare reform legislation to emerge from Congress so far this year. The legislation would immediately eliminate the SGR while providing a 2.5 percent increase in payments for primary care physicians during the next four years.