Last week the House Energy and Commerce Committee had a landmark hearing to ostensibly evaluate alternatives to the Medicare SGR physician payment formula (or the SGRrrr expressed as a growl) in a hearing titled: “The Need to Move Beyond the SGR.”  The idea is to eradicate the SGRrrr.  Hello. It’s getting to be about time, now that the formula has accumulated over $300 billion in national debt, due to its flawed design by Congress and their inability to face the bad advice they got to stop the nonsense and dump it. This hearing is a follow up to the Committee’s March 28 letter to 51 medical organizations requesting feedback on long-term physician payment solutions. The half-dozen panelists’ suggestions for an SGR replacement varied slightly; however, all agreed that a full repeal and replacement with a new payment model is necessary for sustainability within health delivery. 

Despite some differences around the edges, the proposals from the AMA, the American Academy of Family Physicians (AAFP), the American College of Surgeons (ACS), the American College of Physicians (ACP), and the American Osteopathic Association (AOA) lay out remarkably similar paths toward eliminating fee-for-service (FFS) reimbursement or drastically reducing its role. Don’t you think this is remarkable?

The AMA and other physician reps advocated for a 5-year period of stable payments while new payment models focusing on quality and efficiency are tested and evaluated. This makes sense. AAFP suggested an increased focus on patient-centered homes, as well as an increase in the primary care incentive payment included in the Affordable Care Act (ACA) to 20 percent.  The AMA is getting aggressive about payment reform, in part as a means to once again push Congress to fix the SGRrrr mess.  Costs are going through the roof for insurance and Medicaid and everything else.  Except -- believe it or not -- for Medicare -- which for the first time in many years is projected to inflate at ONLY 3-4% over the coming decade.  But, of course, by 2020, with the Boomers in full force in consuming Medicare costs, the Medicare costs are going to explode. 

The SGRrrr will cut payments to doctors in 2012 by 30%, effectively killing Medicare access for many patients. Of course, if the SGRrrr were to be eliminated at full cost, that would add $300 billion in Medicare costs to the debt dilemma.  I don’t think they have the guts to do it, but we should work at making it happen.

Congress can and will hold payments to doctors flat in fee-for-service Medicare until some kind of payment reform is implemented that changes the cost curve, which is one reason that Medicare costs are lower than previously. But none of this is sustainable.  Most doctors will just throw in the towel. Even AMA, despite pressure to protect the status quo, is realizing that new payment models are needed, and fortunately they are working with us and others to figure out how to get out of the mess we’re in.

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