The American Medical Association and more than 40 medical specialty societies are urging the Medicare Payment Advisory Commission to revise its blueprint for repealing the Sustainable Growth Rate formula.
While the physician community has been lobbying hard for a permanent fix to the SGR, the statutory formula used in setting Medicare physician fees, the coalition of medical societies is not satisfied with how MedPAC proposes to solve the problem. In an Oct. 3 letter to MedPAC Chairman Glenn Hackbarth, the coalition said the commission’s current plan compounds the financial pressures physicians face and potentially threaten access.
Under the MedPAC plan, outlined at a meeting on Sept. 15, the current SGR formula would be repealed, the almost 30% physician payment cut slated for Jan. 1 would be averted, and a 10-year plan would be enacted to establish a predictable series of fee updates for physicians.
In advance of MedPAC’s Oct. 6-7 meeting to finalize the plan, coalition members said that they object to how the commission proposes to achieve this.
Under the MedPAC plan, payments for some primary care services would be frozen for 10 years, with a 17% cut to the remaining services for 3 years, followed by a payment freeze. The coalition said the plan to cut and freeze payments was "risky," since it comes at a time when physicians must choose between making costly technology investments or face financial penalties from Medicare. They added that the 17% cut has the potential to threaten access to care.
Another sticking point is how MedPAC proposes to pay for eliminating the SGR. That $200 billion would be funded through cuts to postacute care, increased beneficiary cost sharing, as well as payment cuts to hospitals, labs, drugs, Medicare Advantage, and durable medical equipment.
Coalition members contend that providers should not have to bear the brunt of these cuts. They suggested that MedPAC instead embrace offsets identified by other groups, such as the Congressional Budget Office, the Simpson-Bowles Commission, and the so-called Senate Gang of Six. Those existing proposals draw on a broader scope of items and therefore limit the impact on providers and beneficiaries, according to the coalition’s letter.
The physician groups also questioned the revenue projections underlying the proposal. In their letter to MedPAC, the physician groups said that MedPAC’s prediction that aggregate Medicare revenues to physicians will increase despite a proposed 17% pay cut simply didn’t make sense.
"Even if expenditures per patient did go up at the projected rate, it cannot be presumed that net incomes and physicians’ ability to cover their cost of practice will increase accordingly," according to the letter. "In fact, with such a large gap between projected practice costs and proposed payment rates, there is every reason to think that physician incomes will shrink, potentially reducing their ability to retain staff and continue to provide high quality care to Medicare beneficiaries."