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Fam Pract Manag. 2006;13(1):27

Physicians await action to prevent Medicare payment cuts

A 4.4-percent cut in physicians’ Medicare payments is scheduled to take place this month unless Congress acts soon. The cuts are the result of the “sustainable growth rate” (SGR) formula, which ties physicians’ Medicare payments to the gross domestic product and results in lower payments when utilization of services exceeds SGR spending targets.

At press time, both the House of Representatives and the Senate had narrowly approved a federal-deficit-reduction package that included a measure to freeze physicians’ Medicare rates for one year; however, a procedural roadblock was forcing the House to take up the bill again to resolve changes made by the Senate to the conference report.

The AMA, AAFP and other physician organizations have been lobbying to correct the flawed formula. Without corrective action, rates are scheduled to decrease through 2012.

Medicare takes first steps toward pay-for-performance

The Centers for Medicare & Medicaid Services (CMS) recently unveiled the Physician Voluntary Reporting Program, considered by many to be a precursor to a Medicare pay-for-performance program. Under the program, physicians will report quality data to Medicare using temporary “G-codes” and will receive feedback on their performance. Eventually, data will be gathered via electronic health records. The AAFP opposes the program.

“A disproportionate burden of this program falls on the shoulders of primary care physicians, whose services have been long undervalued by Medicare,” AAFP Board Chair Mary Frank, MD, wrote to CMS. “The voluntary nature of this program does little to assuage the fears of our members that it will soon be attached to a pay-for-performance structure that is unlikely to compensate them for the additional burden that it imposes.”

The AAFP argues that many of the program’s measures are not appropriate for family physicians. The organization advocates for use of the “starter set” of measures developed by the Ambulatory Care Quality Alliance.

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