Internists Offer Recommendations for Solutions to Medicare Payment Problems

ACP statement to House Energy and Commerce Subcommittee on Health provides framework for transition to value-based payment models

February 14, 2013

(Washington) - "Repeal of Medicare's Sustainable Growth Rate (SGR) is essential, but repeal by itself will not move Medicare to better ways to deliver care," the American College of Physicians (ACP), said in its statement today to the House Energy and Commerce Subcommittee on Health. "We need to transition from a fundamentally broken physician payment system to one that is based on the value of services to patients, building on physician-led initiatives to improve outcomes and lower costs."

The 25-page statement was submitted for inclusion in the record for the committee's hearing today, "SGR: Data, Measures and Models; Building a Future Medicare Physician Payment System."

A summary of ACP's statement included these highlights:

A Framework to Repeal the SGR and Progress to Better Models

ACP supports a two-phased approach to eliminate the SGR and transition to better payment and delivery systems that are aligned with value. During phase one, repeal the SGR formula, provide at least five years of stable physician payments, with positive increases for all physician services, and higher payments for primary care, preventive and care coordination services; and in phase two establish a process for practices to transition to new, more effective, models of care by a date certain. ACP is encouraged that this committee's SGR proposal, as released jointly with the Ways and Means Committee on Feb. 7, is largely consistent with this approach.

Reforming Fee-for-service and Transitioning to Value-based Payment

ACP supports shorter-term reforms to start more physicians on the road to better payment models, and reward "early adapters" who already have taken the leadership to participate in payment programs focused on higher quality, improved patient experience, and greater value. This includes development and recognition under Medicare fee-for-service payment polices of two new sets of CPT codes for transition care following a facility-based discharge and for chronic, complex care. These code sets are designed to allow physicians to report their non-face-to-face time, and the clinical staff (team) time spent on patient cases.

Create opportunities for performance-based payment updates based on successful participation in an approved transitional value-based payment program initiative that meets standards relating to the effectiveness of each program, building on successful models in the public and private sectors.

The Role of Performance Assessment in a Reformed Health Care System

Existing Quality Improvement (QI) programs, such as Medicare PQRS, e-RX, and meaningful- use programs must be better aligned with each other, with private-payer initiatives, or with specialty boards' maintenance of certification programs. While strides have been made in aligning the measures, at a high level, the technical requirements within each of the programs are different enough that dual processes must be undertaken.

Improve CMS's ability to provide timely data to participating physicians and practices, which is critical to enable physicians to make adjustments to improve patient care.

In 2012, ACP released a paper, The Role of Performance Assessment in a Reformed Health Care System, in which we laid out a series of policy statements focused on the evolving roles of performance assessment efforts within the realm of medical care, including programs linking payments to reporting and performance on specific quality measures.

Specific Payment and Delivery Reforms that Can Serve as the Basis for a New Medicare Payment System

The patient-centered medical home (PCMH) should be scaled up for broad adoption within Medicare. The PCMH model is an approach to providing comprehensive primary care in a setting that focuses on the relationships among patients, their primary care physicians, and other health professionals involved in their care. Key attributes of the PCMH promote health care delivery for all patients though all stages of life. Other promising care coordination models include: medical home "neighborhoods," Accountable Care Organizations (ACOs), and bundled payments.

A Legislative Pathway to Achieving Comprehensive Payment and Delivery System Reforms

ACP supports bipartisan legislation, the Medicare Physician Payment Innovation Act (H.R. 574), that has been introduced in the 113th Congress that provides a reasonable pathway toward achieving a phased-in approached to repealing and reforming the SGR, permanently.


The American College of Physicians 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. Internal medicine physicians are specialists who apply scientific knowledge and clinical expertise to the diagnosis, treatment, and compassionate care of adults across the spectrum from health to complex illness. Follow ACP on Twitter and Facebook.

David Kinsman, (202) 261-4554
Jacquelyn Blaser, (202) 261-4572