Physician groups respond to SGR patch with relief, disappointment

Physician organizations expressed relief, but also renewed their calls for action, following last-minute negotiations by lawmakers to stave off 28.5% in Medicare reimbursement cuts.

As part of last-minute negotiations to avoid the so-called fiscal cliff, the president and Congress agreed to a 1-year delay in implementing the 26.5% accumulated reductions in Medicare reimbursements mandated under the sustainable growth rate (SGR) formula. The cliff-averting legislation also delays by 2 months an additional 2% sequestration in Medicare reimbursements.

Had the two branches of the federal government not come to an agreement, doctors and other healthcare providers would have faced a 28.5% total reduction in their Medicare payments. The Centers for Medicare and Medicaid Services already had begun taking steps to implement the anticipated cut.

The controversial Medicare physician payment formula requires payment increases to match gross domestic product growth. If expenditures exceed the target, then Medicare tries to recoup the difference by cutting physician reimbursement. The difference between targeted and actual spending on physician services accumulates, however, so that the postponed pay cuts grow larger every year. Over the years, Congress has approved several short-term “patches” to the SGR.

“This patch temporarily alleviates the problem, but Congress’ work is not complete;,” said Jeremy Lazarus, MD, president of the American Medical Association (AMA)."It has simply delayed this massive, unsustainable cut once and for all."

Glen Stream, MD, MBI, FAAFP, board chairman of the American Academy of Family Physicians (AAFP), called the fiscal cliff negotiation outcome “a reprieve for elderly and disabled patients whose healthcare security is jeopardized by continual threats to Medicare physician payment" but added: "The current system, with its deeply flawed sustainable SGR formula, generates…[a] crisis of confidence among elderly and disabled Medicare patients and their physicians.

“Now is the time for Congress to follow through on previous promises and commit to permanently end the ordeal of temporary patches that ultimately drive up the cost of a meaningful solution and destabilized the Medicare payment system,” Stream added.

David L. Bronson, MD, FACP, president of the American College of Physicians (ACP) said, "In the short term, this legislation helps ensure access to high-quality medical care for Medicare beneficiaries, and ensures that physician payments under Medicare will not be cut through 2013. However, a greater bipartisan effort is still needed in the coming year to approve legislation that permanently repeals once and for all the flawed SGR formula, and transitions to payment models that provide predictable annual updates to physicians participating in Medicare, while being aligned with the provision of high quality and efficient care."

Susan L. Turney, MD, MS, FACP, FACMPE, president and chief executive officer of the Medical Group Management Association-American College of Medical Practice Executives, said, “Although Congress again averted another massive Medicare physician payment cut at the 11th hour, this action only perpetuates another year of uncertainty for physician practices forced to continue their work under the dark cloud of looming SGR cuts and the new threat of sequestration cuts scheduled for March. Without action to permanently repeal the [SGR] formula, Congress will replay this fiscally irresponsible scenario again and again, with even larger cuts awaiting practices in the near future.”

Representatives from the AAFP, ACP, and AMA, as well as from the American Osteopathic Association (AOA) and the American College of Surgeons, visited Capitol Hill December 13 to express their desire for a permanent solution to paying physicians who treat Medicare patients.

“Over the past decade, Congress has been unable to enact long-term Medicare physician payment reform," AOA President Ray Stowers, DO, said then. "There is bipartisan agreement that our nation can no longer afford to simply ‘kick this can down the road.’ As physicians, we are committed to providing quality care to our patients, innovating healthcare delivery, and embracing new technologies-yet the lack of predictability and stability under the current payment structure hinders our ability to fully do so.”

The comments expanded on those in a letter signed by more than 100 medical groups and sent to Congress earlier in December.