Another crack at SGR
An early February bill introduced in the House by Reps. Allyson Schwartz (D-Penn.) and Joe Heck, MD, (R-Nev.) has once again raised hopes that the sustainable growth rate (SGR) formula payment model for Medicare can finally be repealed.
"The current approach to payment levels based on overall physician expenditure targets, which punishes individual physicians for systemic dysfunction, is the wrong approach to reducing costs," read a summary of the bill jointly released by Schwartz and Heck. "The existing fee-for-service model, particularly with the threat of SGR cuts, rewards overutilization as clinicians seek to compensate for insufficient payments."
The bill, named the Medicare Physician Payment Innovation Act of 2013, is designed to both repeal the severely broken SGR payment formula while providing a five-year period intended to transition payments away from the current fee-for-service model to a payment system that pays for value instead of volume.
"The SGR is an untenable situation," said Charles Cutler, MD, chair-elect of the American College of Physicians' board of regents. "Almost as bad are these postponements that can be anywhere from two months to 12 months. This is a problem that has to go away."
As Cutler tells it, the uncertainty for primary care doctors caught up in the web of the Medicare SGR has a significant affect on primary care practices, like his in Norristown, Pa., that he shares with two other doctors. It impacts everything - virtually every year - from budgeting, retaining or hiring new staff and making equipment upgrades.
"We want to provide the best care we can, but when these huge cuts are in front of us, it is hard to keep the office functioning," Cutler said.
The bill proposes, starting in 2015 and ending in 2018, an annual increase of 2.5 percent for primary care, preventive and care coordination services provided by clinicians for whom 60 percent of their Medicare allowable charges are for those same services. It also provides a 0.5 percent increase for other services. Starting in 2019, the payments from Medicare would switch to ones that pay, in most instances, on value.
"Our current fee-for-service payment rewards production and not value," said Jeff Cain, MD, president of the American Academy of Family Physicians. "The old system is broken and to change our healthcare system towards higher quality and lower costs, we have to move beyond paying for quantity instead of quality. In order to do that, you need to change the basic nature of the way you incent payment."
Cain noted that stabilizing the Medicare payment structure, while also providing a path via new payment models to boost primary care provider income, can help to slowly turn the tide of med students choosing to become specialists as opposed to family doctors. The income gap between specialists and primary care doctors is cited as one of the main reasons for the shortage of primary care physicians - a gap that sees specialists earn an average of $3.5 million more over the course of their careers according to a 2009 report from the AAFP's Robert Graham Center, a policy center focused on family physicians and primary care.
It also appears that the timing this time around for repealing SGR may be good. Just last year, the Congressional Budget Office estimated the cost to fix the SGR would be around $320 billion over a 10-year period. But the most recent CBO estimate said the cost of such a fix has shrunk to $138 billion.
"I have yet to meet an elected official who disagrees with these concepts (the bill) is talking about," said Cutler. "They all recognize that the SGR is flawed legislation and it should be repealed and they recognize the crisis in primary care and want to do something about it. So why can't we fix it?"
