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Friday Nov 18, 2011

Proposal Offers Hope for SGR Solution

Every year since 2003, Congress has made temporary fixes to the flawed Medicare payment system. Once again, a potential cut is looming that would threaten the viability of our practices and limit patient access to care.

Despite the staggering 27.4 percent cut we're faced with starting Jan. 1, we do not want yet another patch on the unworkable sustainable growth rate, or SGR, formula. What we need instead is a permanent fix.

U.S. Rep. Allyson Schwartz, D-Pa., gets it. Last month, Schwartz sent a letter signed by 117 members of Congress from both sides of the aisle to members of the Joint Select Committee on Deficit Reduction, the so-called supercommittee. She urged them to include a long-term solution to the Medicare physician payment system as part of a deficit reduction plan.

On Nov. 16, Schwartz unveiled a legislative proposal that not only would repeal the SGR, it also offers a 10-year plan to stabilize payments in a way that would recognize the value of primary care.

Schwartz asked the supercommittee to consider her proposal, which has support from the AAFPthe American College of Obstetricians and Gynecologists, the American College of Physicians, the American Geriatrics Society, the American Osteopathic Association, the Association of American Medical Colleges, and the Society of Hospital Medicine.

The AAFP provided input during development of the proposal, which would transform the Medicare physician payment system through the following steps:

  • After a one-year freeze of physician payments at 2011 levels, payments for primary care services would increase 2.5 percent each year from 2013 through 2016. All other physician services would receive 0.5 percent updates during the same time frame.
  • By October of 2015, CMS must issue a menu of health care delivery and payment models based on testing and evaluation of such models by the Center for Medicare and Medicaid Innovation. CMS also would be required to issue guidance for physicians related to transitioning their practices to these models.
  • Physicians who adopt new models would receive incentives, while non-adopters who retain a straight fee-for-service model would be subject to disincentives in the form of reduced updates starting in 2018.
  • Beginning in 2022, payments under the new coordinated care models would be updated annually between 1 percent and the Medicare Economic Index, while straight fee-for-service payments would be frozen at 2021 levels.

We will be working with CMS to assure these new payment models are consistent with our blended payment model of fee-for-service, care management payments, and pay-for-performance/shared savings to support the patient-centered medical home. 

Schwartz clearly understands the gravity of the situation facing our health care system. We will continue to push this issue forward until others in Congress understand that another patch on the SGR doesn't solve the problem for physicians or our patients.


If we expect the PCP to survive and be able to continue medical and emotion care to our seniors was must correct this problem. It has been neglected to long. In todays envirnoment it is difficult to stay in pactice with all the extra paperwork. For the small groups or solo physicians not passing is going to devastating. Each Doctor supports at least two FTEs so this would also put more people out of work. I would also love to give my hard working employee a fair raise to keep up with raising costs. This issue is about people and their health. Not politics.

Posted by Carl E Flor, MD on November 20, 2011 at 11:20 AM CST #

Thank you for your post Carl. I agree with you the issue of resolving the SGR problem should be about people and their health. You are exactly right, "it has been neglected too long." Yesterday's failure of the supercommittee means it has been neglected yet again. Congress created the SGR and only Congress can fix it. This means it is unavoidably a political issue and sadly a partisan issue. The AAFP has and will continue to ask that both parties set partisan politics aside and Congress fix this SGR problem once and for all. We family physicians cannot sit on the sidelines while such important decisions affect our patients and our practices. We must continue to increase our advocacy efforts until this problem is solved.

Posted by Glen Stream, MD on November 22, 2011 at 07:55 AM CST #

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