Adjustments in Proposed Medicare Fee Schedule Positive for FPs, Says AAFP

SGR Still Poses Threat to Patient Access, Care

July 10, 2013 12:12 pm News Staff

CMS has released the 2014 proposed Medicare physician fee schedule. According to AAFP President Jeff Cain, M.D., of Denver, the fee schedule adjusts misvalued codes and proposes two new complex management codes for primary care physicians, which could help create a more equitable payment system.

[Medicare and various medical terms written on green chalkboard]

By adjusting misvalued codes, CMS could raise payment rates for evaluation and management services by as much as 3 percent, resulting in an estimated 1 percent overall payment increase for family physicians, said Cain. "Such changes demonstrate CMS' intent to support primary care through policies that promote comprehensive and continuous care."

However, any increase for primary care is threatened by the sustainable growth rate (SGR) formula, which calls for a 24.4 percent reduction in the Medicare physician payment rate on Jan. 1. "In light of the SGR's mandate that CMS slash Medicare physician payment by 24.4 percent, these incremental increases do nothing to sustain primary medical care, much less build the primary care physician workforce," Cain said. "The SGR-required payment cut shines a bright light on the need for Congress to replace this dysfunctional system."

Cain also warned that "if Congress fails to avert this disastrous pay cut before 2014, family physicians once again will be forced to choose between caring for Medicare beneficiaries at a significant financial loss or ending their participation in Medicare."

If enacted, the pending SGR reduction would cost the average family physician $89,763 in revenues next year, meaning a three-physician practice would lose $269,289 in revenue, according to an analysis of the proposed cuts by the AAFP.

"No small business can sustain itself in the face of such drastic revenue reductions," said Cain.

In his statement, Cain urged Congress to pass the Medicare Physician Payment Innovation Act(, a bipartisan bill that would repeal the SGR and put in place mechanisms to better reward primary care and encourage adoption of innovative payment models.

The AAFP is preparing a summary of the 2014 proposed Medicare physician schedule for members and will submit comments to CMS on the fee schedule before the deadline for comments expires on Sept. 6.

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