Jeremy Lazarus, MD, President, American Medical Association

SGR may be on the way out. As I write this, there is emerging agreement among health policy experts and policymakers that the time has come for Congress to truly reform the Sustainable Growth Rate Medicare payment system.

SGR’s history is dismal: in the past dozen years, SGR payments to physicians for Medicare Services have remained static while the cost of care has risen 22 percent. As a result, many physicians have been forced to limit or deny Medicare patients just to keep their offices open.

Over the years, the AMA has led public a campaign to get Washington’s attention. We have testified before Congressional committees and worked behind the scenes. Last October we wrote to Congress outlining transitional principles that should replace SGR. The Colorado Medical Society was one of more than 100 medical organizations that signed that letter.

And while it is never a sure thing to predict the future, least of all in Washington, the signs are positive.

  • Recently the Medicare Payment Advisory Commission, a key congressional advisory panel, once again urged Congress to put an immediate end to SGR. Other private sector groups like the Bipartisan Policy Center are also calling for repealing the SGR.
  • The president’s 2014 budget also recognizes the need to eliminate the broken Medicare physician payment formula and move toward new ways of delivering and paying for care that reward quality and reduce costs. The president’s proposals align with many of the principles developed by the AMA and other physician organizations on transitioning Medicare, including that there be an array of accountable payment models and a period of stability for physicians where they have the flexibility to choose options that will help them lower costs and improve the quality of care for their patients.
  • In March, a bipartisan bill to repeal SGR was reintroduced in the House by Rep. Allyson Schwartz (D-PA) and Joe Heck, DO (R-NV).
  • At the AMA’s National Advocacy Conference in February, House Energy and Commerce Committee chair Fred Upton (R-MI) affirmed his intention to complete his committee’s work on legislation to repeal the SGR and reform the Medicare physician payment system by August.
  • The House Ways and Means Committee and the Energy and Commerce Committee’s majority (Republican) staff has also circulated a draft of a joint framework for repealing SGR. The committees’ proposal is generally consistent with the principles we sent to Congress last fall. It would immediately repeal the SGR, promote a diversity of new payment and delivery reform models, modify but still preserve fee-for-service, and maintain the medical profession’s leadership role in developing quality measures and data reporting systems.

We view these as very positive developments. It is encouraging to see this focused attention on the Medicare physician payment system so early in the year combined with the effort by committees with jurisdiction over Medicare to solicit comments directly from physician groups. The AMA will remain in close touch with committee members and staff and will be working to shape the missing details into policies that are consistent with our principles.

Sequester cuts challenge progress
In the meantime, the outlook for the sequester cuts are not so positive. The Budget Control Act of 2011 called for $1.2 trillion in federal spending cuts over 10 years. Unless Congress changes the law, federal spending will be subject to sequestration until 2022.

We all know that payment rate cuts and freezes are not enhancing value in the Medicare program. In fact, inadequate Medicare payment rates work to stifle physicians’ ability to invest in new technology and staff – key moves in adopting new systems of well-coordinated, cost effective care.

The future of the sequester likely will depend on whether Congress and the White House can reach a new budget agreement to address deficit and spending concerns.

The AMA is working to educate members of Congress about the negative consequences of sequestration. We also cosponsored a study with the American Hospital Association and American Nurses Association detailing the impact the cuts will have on health sector employment.

During the coming months the AMA will continue to work with CMS and all of organized medicine in urging Congress and the Obama Administration to move from discussion to action and deliver on long overdue reforms.


Categories: Communications, Colorado Medicine, Practice Evolution, Payment Reform, Initiatives, Advocacy, AMA