Congress wrestles with the future of SGR

WASHINGTON – The House Energy and Commerce Health Subcommittee is looking at ways to move beyond the Sustainable Growth Rate formula, the current method of paying Medicare physicians.

 

Over the past 10 years, Congress has postponed SGR adjustments 12 times, with six of those coming in the past year. Physicians are under one such extension now, which postpones a nearly 30 percent pay cut until Jan. 1, 2012.

 

American Medical Association President Cecil B. Wilson, MD, called the SGR "a failed formula."

"The longer we wait to cast it aside, the deeper the hole we dig," he told the subcommittee at a May 5 hearing. "It is past time to replace the SGR with a policy that preserves access, promotes quality and increases efficiency."

 

The AMA is recommending that Congress repeal the SGR and implement a five-year period of positive Medicare physician payment updates while the government pilots new payment systems.

 

Wilson said a replacement for the SGR should allow physicians to choose from a menu of new payment models that reward physicians and hospitals for keeping patients healthy and managing chronic conditions.

 

Mark McClellan, MD, director of the Engelberg Center at the Brookings Institution and former administrator of the Centers for Medicare and Medicaid Services, said doctors are "the lynchpin" in Medicare, and they should lead efforts to make changes to the payment system. "No one knows better," he said.

 

"No one thing will fix this," said Harold Miller, executive director of the Center for Healthcare Quality and Payment Reform. "Multiple things will have to take place, including a comprehensive set of reforms on how the physician is paid as well as patient responsibilities."

 

Subcommittee Chairman Fred Upton (R-Mich.) said the original 1965 Medicare legislation promised that the government would not interfere in the practice of medicine.

 

"Today, the federal government, through the Medicare program, sets irrational spending targets and administers the prices for more than 7,000 physician services," he said. "This is a long way from that original promise."

 

Frank Pallone (D-N.J.) said the time has come for Congress to stop playing "a game of chicken" over the SGR. "This is a high hurdle," he said. "If this is going to get done we all have to be engaged and open-minded."

 

The subcommittee has requested feedback from 51 physician organizations on how to overhaul Medicare physician payment. Upton said the letters would be invaluable to the committee as it considers the issue.