David H. Henry, MD, FACP, Editor
Pennsylvania Hospital, Philadelphia, PA
We’ve all heard about the Sustainable Growth Rate (SGR)— who hasn’t—but what does it really mean? Congress established Medicare and Medicaid in 1965 through amendments to the Social Security Act to provide health insurance for the elderly and the poor. Initially, tax dollars were put into a fund that physicians and hospitals could access for taking care of Medicare and Medicaid recipients. All went well until health costs began spiraling upward in the 1980s and 1990s. In 1997, the Balanced Budget Act was enacted, and the SGR was born. It was intended to tie physician reimbursement rates for Medicare Part B to the gross domestic product (GDP), so that reimbursements would increase as GDP increased. But it soon became clear that SGR was a good idea only as long as the economy was strong. By 2002, the economy began to slide, and physician costs outstripped GDP. That year, the first SGR cut was applied to physician reimbursement.
Congress consequently put the breaks on the whole system and has frozen the Medicare reimbursement rates six times in the past two years to block the cut in fees that would occur if the SGR formula were allowed to go forward. That action would translate into a cut of about 25% in reimbursement for Medicare patients in 2012 unless current reimbursement is extended—or SGR fixed—once again. Now it seems that that Congress might actually be serious about altering the SGR payment formula. On page 239, Frances Correa reports on a House subcommittee hearing earlier this month at which representatives from the medical community and health policy organizations proposed alternatives to the current SGR formula.
With hindsight, we can appreciate that the SGR can never address the complexities of today’s oncology care. Clearly, the fee-for-service model is too simplistic and outdated. Fee-for-service simply says you see the patient, do something, and charge for it. But what have you done? Have you followed accepted national guidelines and addressed the patient’s care in its entirety—such as chemotherapy, novel therapies, access to clinical trials, testing, symptom management, outpatient versus inpatient treatment, quality of life, and end of life? These questions suggest the need for a program that could aid and promote improved quality of cancer care, and there is one—the Quality Oncology Practice Initiative. It leads naturally into the concept of the oncology medical home, which entails the oncologist assuming total care of a patient during the patient’s oncology experience.
If a new payment system is accepted, it should require that guidelines be followed, quality care delivered, and systems such as electronic health records be in place to document that quality care was delivered. Then practices that provide quality guideline- based and outcomes-driven oncology care will receive appropriate reimbursement, consistent with increasing costs of healthcare delivery.