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ACP Applauds Introduction of Bipartisan Bill to Eliminate Medicare SGR Formula

Proposal Creates Pathway to Better Payment Models

February 6, 2013

Washington—The American College of Physicians (ACP) today applauded Rep. Allyson Schwartz (D-Pa.) and Rep. Joe Heck (R-Nev.) for their bipartisan introduction of The Medicare Physician Payment Innovation Act of 2013 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 Charles Cutler, MD, FACP, chair-elect of the ACP board of regents. “It is difficult for physicians to keep their doors open, especially for our members in small or solo practices, with the constant threat of Medicare payments being cut by 25 percent 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, 2014.

“We enthusiastically support this legislation,” continued Dr. Cutler. “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 ensures patient access to physicians while promoting efficiency, quality and value in health care delivery by:

  • Permanently repealing the Sustainable Growth Rate;
  • Stabilizing the current payment system and providing positive payment updates for primary care and specialty physicians;
  • Instituting measures to ensure access to primary care services;
  • Testing and evaluating new payment and delivery models;
  • Identifying best practices and developing a menu of delivery model options;
  • Establishing a transition period for practice transformation;
  • Rewarding providers for high-quality, high-value care;
  • Ensuring long-term stability in the Medicare physician payment system; and
  • Containing the rising growth in health care costs through delivery system reform.

“ACP believes that the bipartisan Medicare Physician Payment Innovation Act of 2013 will benefit seniors, disabled persons and military families,” concluded Dr. Cutler. “We strongly urge Congress to pass the bill before the next scheduled SGR cut on January 1, 2014.”

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 133,000 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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