SGR Deal Would Fix Perennial Physician Pay Problem

Christopher Cheney, for HealthLeaders Media , February 7, 2014

"The American Medical Association congratulates House and Senate negotiators for taking this critical step toward reforming the nation's Medicare program," Dee Hoven said. "Now Congress is closer than it has ever been to enacting fiscally-prudent legislation that would repeal Medicare's fatally flawed sustainable growth rate (SGR) formula."

Ardis Dee Hoven

Ardis Dee Hoven, MD, President of the American Medical Association

Hoven said reaching a long-term solution for Medicare reimbursement for doctors is critically important for providers and their patients. "Congress has been debating the shortcoming of the SGR policy for more than decade. Continuing the cycle of short-term patches by merely addressing the 2014 cut that is imminent on April 1 without solving the underlying problem would be fiscally irresponsible and further undermine the Medicare program," she said. "It is time for action to repeal the SGR and establish a transition to a new more stable Medicare physician payment policy to better serve America's senior citizens."

In a "Summary of the SGR problem," the lawmakers who crafted the deal offered a scathing assessment of the existing system in their joint statement:

"The Sustainable Growth Rate formula—the mechanism that ties physician payment updates to the relationship between overall fee schedule spending and growth in gross domestic product (GDP)—is fundamentally broken. Although originally introduced as a mechanism to contain the growth in spending on physician services, a decade of short-term 'patches' has frustrated providers, threatened access for beneficiaries, and created a budgetary dilemma from which Congress has struggled to emerge. Over the last decade, Congress has spent nearly $150 billion on short-term SGR overrides to prevent pending cuts."
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