Professional associations suggest guiding principles for SGR replacement

Dozens of professional healthcare associations are listed on an Oct. 15 letter to Sens. Max Baucus (D-Mont.) and Orrin Hatch (R-Utah), both members of the Senate Committee on Finance, calling for an end to the sustainable growth rate (SGR) formula and offering suggestions for alternatives.

“The SGR formula is an enormous impediment to successful healthcare delivery and payment reforms,” read the letter from, among others, the American Medical Association and its state-level affiliates. “Physicians facing the constant specter of severe cuts under the SGR cannot invest their time, energy and resources into care redesign. The first step in moving to a higher performing Medicare program must be the elimination of the SGR formula. The status quo is bad for patients, physicians and taxpayers.”

Physicians will face a 27 percent payment cut on Jan. 1, 2013, unless Congress takes action to replace the formula for determining Medicare payment rates or implement a “fix,” as it did in December 2011 and again in February. AMA and others suggest that the temporary fixes, which have been enacted for as little as two months, create uncertainty for physicians and discourage them from accepting new Medicare patients.

“Each year, patient access to care is eroded because the threat of steep physician payment cuts and last-minute congressional action to avoid these cuts create an environment where new Medicare patients have difficulty securing physician appointments,” the letter read.

Included in the letter are a set of guiding principles for Congress to consider should it move to replace the SGR with a more reliable system for determining Medicare payment rates. They suggest that a replacement accurately estimate physician costs, align with various healthcare reform efforts, reward physicians for providing high quality care and invest in infrastructure necessary for physicians’ to meet healthcare reform requirements.

“Physician-led, patient-centered models must be developed and implemented during a defined and robust transition period that can fill in the gap between elimination of the SGR formula and implementation of a new system nationwide,” the letter concluded. “Physician practices of every size and specialty must be supported and encouraged to develop the needed infrastructure and begin adopting the most appropriate model for their patients and their practice.”

Read the complete letter.