This post was authored by John Gordon Harold, MD, MACC, president of the ACC and Clifford A. Hudis, MD, FACP, president of American Society of Clinical Oncology.

For the first time in years, Congress has a real opportunity to reverse an avoidable but recurring misstep in health care policy by repealing the sustainable growth rate (SGR) formula. The viability of medical practice as we know it in the U.S. and, by extension, the health care of millions of older Americans covered by Medicare, depends on action now.

Established by Congress with the best of intentions in 1997 as a means to impose fiscal discipline, the SGR formula sets Medicare payments to physicians through yearly and cumulative spending targets: if Medicare physician spending for a given year exceeds the spending target for that year, reimbursement rates to physicians are adjusted downward; if spending is below a given target, rates are increased.

One problem of many with this collective approach is that it does not account for changes in health (for example, increasing obesity) or changes in technology, including effective but costly diagnostic tests and new treatments. Perhaps as a consequence, since 2002, the federal government has consistently and significantly underestimated the amount it will need to reimburse physicians for treating Medicare patients and actual expenditures have repeatedly exceeded the target.

Rather than fix the SGR formula, Congress has passed more than a dozen short-term patches (the so-called “doc fix”) that provide a temporary reprieve—but only increase the size of the total eventual cumulative cut required by the law. In other words, the doc fix simply delays the inevitable while turning the SGR into a yearly political “hot potato” that creates intolerable instability for medical practices while still failing to meet its original goals of reducing the nation’s debt and curbing the growing cost of health care.

By delaying the intended SGR cuts year after year, the total cost to close the current shortfall is now estimated by the Congressional Budget Office at $139 billion. Five years ago, fixing the cumulative overruns would have cost approximately $50 billion, or roughly one-third of the current price tag, illustrating the rapidly increasing costs of health care and consistently unrealistic spending targets set under this system.

The latest SGR patch delayed a scheduled 24.4 percent cut to Medicare physician payments until 2014. If enacted today, cuts of this magnitude would force many doctors out of business—and effectively shut out untold numbers of Medicare patients from medical care. In fact, the impact is already being felt with growing numbers of doctors limiting the number of Medicare patients they treat or opting out of the program entirely.

Doctors make a lifelong commitment to devote lengthy training and subsequent experience to caring for people who are sick, often scared, and in need of the specialized treatments we provide. Our two medical societies represent highly trained specialists who care for the most common, life-threatening illnesses experienced by the majority of Medicare beneficiaries—cancer and heart disease. In fact, more than 60 percent of all cancer diagnoses and nearly half of heart disease cases occur in the Medicare population, individuals 65 years of age and older. As the population ages, this incidence is expected to rise. Further, as medical technology advances, the need for our members’ services will only grow. The physicians we represent rely heavily on Medicare reimbursement to treat these patients; pay nurses and staff; and cover rent, patient record and billing expenses, malpractice insurance, and other administrative costs.

The current unpredictability of Medicare physician reimbursement forces doctors to practice in a chronic state of uncertainty because we never know when Congress will pass the next fix and how long it will last. Every time the current SGR patch expires, medical practices face cash-flow problems within a week or two as bills come due for payment and funds are not there. Furthermore, long-term plans to hire staff or enhance services cannot be made when revenue projections are unclear. The uncertainty even negatively impacts new research when practices are reluctant to bear the costs of routine care required when patients participate in clinical trials that hold tremendous promise for life-enhancing treatments. These cuts, whether threatened or real, not only put patient access and medical practice at risk today, but also reduce the long-term investment needed to improve health care in the future.

Fortunately, as a nation, we have the rare opportunity to directly address this problem during the current legislative session. Policymakers, health care providers, patient advocates, and others are showing a new political will to finally take the SGR issue head on. Both Chambers of Congress are now working hard to identify a workable path that would ultimately repeal the current reimbursement formula and replace it with a more rational, reliable Medicare payment system that reflects the realities of delivering medical care in today’s world.

With these efforts, we are encouraged by increasing Congressional support for a system that would reward high-quality, accountable health care. Of course, any such solution must also include a reasonable period of transition that will allow the medical practice community to adapt to changes, while continuing to provide high quality care for their patients.

It will never be less expensive to fix the Medicare reimbursement system than it is today. Every year that we delay just increases the pain and cost of the ultimate day of reckoning. While much work remains, current Congressional efforts must succeed—once and for all—if we are to uphold our nation’s promise to provide health care for millions of older Americans.

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