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ACP Applauds Introduction of Bipartisan Bill to Eliminate Medicare SGR Formula

Proposal Creates Pathway to Better Payment Models

May 9, 2012

The American College of Physicians (ACP) today applauded Rep. Allyson Schwartz (D-Pa.) and Rep. Joe Heck (R-Nev.) for their bipartisan introduction of H.R. 5707, the Medicare Physician Payment Innovation Act of 2012 this morning.

The bill is designed to eliminate the flawed Sustainable Growth Rate (SGR) formula and the turmoil brought by its resulting scheduled cuts. The SGR cuts threaten to drive physicians out of the Medicare and TriCare programs, creating severe access problems for seniors, disabled persons, and military families. (TriCare updates are set by the Medicare SGR formula, so military families are at the same risk of losing access to doctors because of the scheduled cuts as persons enrolled in Medicare.) The legislation stabilizes payments for six years, provides higher updates for undervalued primary and coordinated care services, and creates a pathway to new physician payment models that would better align payment with value to patients.

“Over the past decade, the repeated threat of cuts to physician payments resulting from the SGR have brought chaos to the practice environment,” said David L. Bronson, MD, FACP, president of ACP. “It is difficult for physicians to keep their doors open, especially for our members in practices that care for underserved populations, particularly in the nation's low income and rural communities, with the constant threat of Medicare payments being cut by a quarter or more.”

Every year since 2001, the Sustainable Growth Rate (SGR) formula, which is used to determine payments for physicians’ services under Medicare, has threatened to impose steep cuts in Medicare payments for care provided to America’s seniors. While Congress typically acts to avert payment reductions, the average Medicare payment rate this year is essentially the same as it was in 2001. By consistently postponing the cuts, Congress has dug a hole that has grown to hundreds of billions of dollars. Unless Congress acts to fix this flawed payment formula, doctors will face a projected cut of nearly 30 percent on January 1, 2013.

“We enthusiastically support this legislation,” continued Dr. Bronson. “It not only addresses the continued threat of the SGR formula, it also moves Medicare beyond a pure fee-for-service payment model toward new models that better align payment with value.”

The legislation will:

  • Repeal the SGR, fully paid for by using money that has been set aside for military operations that the administration says are not needed and will never be spent.
  • Protect access to care for seniors, disabled persons, and military families, by eliminating all scheduled SGR cuts, including the one scheduled for January 1.
  • Stabilize payments through 2018, with no cuts for the next six years and positive updates to all physicians during 2014-2017.
  • Provide a higher update for undervalued primary, preventive and coordinated care services, whether provided by primary care physicians or by other specialists.
  • Accelerate development, evaluation and transition to new payment and delivery models, like Patient-Centered Medical Homes, developed with input by the medical profession and with external validation.

ACP believes that the bipartisan Medicare Physician Payment Innovation Act will benefit seniors, disabled persons and military families,” concluded Dr. Bronson. “We strongly urge Congress to pass the bill before the next scheduled SGR cut on January 1, 2013

The American College of Physicians (www.acponline.org) is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include 132,000 internal medicine physicians (internists), related subspecialists, and medical students. Internists specialize in the prevention, detection, and treatment of illness in adults. Follow ACP on Twitter and Facebook.

Contact:
David Kinsman, (202) 261-4554, dkinsman@acponline.org
Jacquelyn Blaser, (202) 261-4572, jblaser@acponline.org

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