Medicare pay momentum shifts to multi-year fix

The House SGR proposal offers physicians possible raises through 2013. The AMA says it treats the immediate problem but is no substitute for permanent overhaul.

By — Posted May 20, 2010

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House leaders on May 20 floated a plan to prevent Medicare physician pay cuts for the next 3½ years and replace scheduled cuts with positive pay updates. Physician organizations acknowledged that this appears to be the only politically feasible option at this point, but reiterated that a permanent solution is still needed.

The proposed plan is designed to be amended to an unemployment assistance and tax extenders bill slated for congressional consideration. If it is enacted, it would replace a 21% cut set to take place June 1 with a 1.3% Medicare physician pay increase for the remainder of 2010, followed by another 1% raise for 2011.

In 2012 and 2013, physician pay would not face cuts, and rates also could increase in each of those years under a modified formula. The proposed two-tiered modification makes it more likely that pay for primary care services would be eligible for raises, even if rates for other services remain frozen. Starting in 2014, the system would revert to the current sustainable growth rate formula unless lawmakers pass additional legislation to stop the cuts from returning.

American Medical Association President J. James Rohack, MD, said the AMA was deeply disappointed Congress would not scrap the SGR this year, a permanent solution that becomes more expensive the longer lawmakers wait. However, he said, "achieving full repeal of the payment formula is apparently not feasible at this time."

Although the proposed House plan would be a temporary reprieve for doctors and their patients, Dr. Rohack said, the AMA will keep pushing for Congress to enact a long-term fix well before cuts are projected to return in 2014.

The American College of Physicians came out in strong support of the House proposal, though the organization also said it would keep advocating for a permanent solution. The plan "recognizes the importance of ensuring that spending on all physician services be allowed to grow at a higher rate of growth than the unrealistic limits set by the SGR, while creating the opportunity to provide higher updates for undervalued primary care and preventive services," said ACP President J. Fred Ralston Jr., MD.

The American Academy of Family Physicians also backed the plan and the special consideration for primary care rates.

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