ACP Urges Feds to Move Beyond the SGR

May 9, 2011

The American College of Physicians has released a statement criticizing the "flawed" sustainable growth rate formula.

The American College of Physicians (ACP) has released a statement applauding the chairs of the House Energy and Commerce Subcommittee on Health for holding a hearing on what the ACP calls the “flawed” sustainable growth rate (SGR) formula.

“ACP has long-advocated that the SGR formula needs to be repealed and replaced with positive, predictable, and permanent payment updates. While the SGR produces/threatens annual Medicare payment cuts that harm all physicians, the adverse impact on internal medicine practices can be devastating. With the dark cloud of the SGR hanging over their heads, these practices are not only unable to invest in the capability to enhance care coordination; they struggle to even keep their doors open to patients,” the statement said.

According to the statement, every year since 2001, the current, “fatally flawed” SGR formula has threatened to impose steep cuts in Medicare physician fee schedule payments for care provided to America’s seniors. While Congress typically acts to avert payment reductions, the average Medicare payment rate this year is essentially the same as it was in 2001. “By consistently postponing the cuts, Congress has dug a hole that has resulted in an estimated 30% scheduled cut in January, 2012. The current cost to dig out of this hole has grown to hundreds of billions of dollars.”

Unless Congress acts to fix the payment formula, doctors will face a projected cut of more than 29% on January 1 and cuts up to 40% in the coming decade. With practice costs increasing 20% over this period, cuts of this magnitude will create an access crisis for Medicare patients.

“The College proposes a two-stage process that is intended to lead to a permanent replacement of the current flawed Medicare payment system, including the SGR, and, in so doing, recognizes the value of primary and comprehensive care provided by internists and other medical specialists and provides stability in payments for all specialties.”

During the first stage, Medicare would stabilize and improve payments under the current Medicare fee schedule for the next five years by eliminating the SGR as a factor in establishing annual updates and by ensuring higher payments and protection from budget neutrality cuts for undervalued evaluation and management services, the ACP argues.