Expert Commentary

Why (and how) we must repeal the sustainable growth rate

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This document is unique in many ways, perhaps especially in the unity it demonstrates among all physician organizations. It echoes ACOG’s earlier guidance to the US Congress on essential elements for a Medicare payment system that benefits women’s health. Among ACOG’s recommendations:

Make the new system simple, coordinated, and transparent. A new Medicare physician payment system should coordinate closely with other health-care programs; ensure that information technology is interoperable; and guarantee that quality-measurement programs are the same across all payers and rely on high-quality, risk-adjusted data.

Maintain the global obstetric care package. Medicare currently uses this package to reimburse for pregnancy. It works well and may be a model for global payment options for care provided by other physician types. The global obstetric care payment covers 10 months of care, from the first antepartum visit through the final postdelivery office visit.

Global payments allow a physician to manage costs and care for a patient’s course of treatment, rather than for a patient’s individual medical encounters.

Maintain fee for service for women’s health physicians who have small Medicare populations. Depending on the practice mix, type, and area, ObGyns and ObGyn subspecialists could see relatively few Medicare patients; unique Medicare requirements can pose significant administrative challenges and create inefficiencies with participation. Physicians who have small numbers of Medicare patients must be accommodated—and not penalized—in a new payment system.

Ensure that payment fairly and accurately reflects the cost of care. Medicare payments to obstetricians are already well below the cost of maternity care; no further cuts should be allowed for this care.

Support innovative care models, including a women’s medical home. These models should recognize the dual role that ObGyns may play as primary care and specialty care physicians.

Repeal the Independent Medicare Payment Advisory Board. Leaving Medicare payment decisions in the hands of an unelected, unaccountable body with minimal Congressional oversight is just a bad idea.

Pass medical liability reform. Congress must enact meaningful medical liability reform, which the Congressional Budget Office says could save $40 billion—enough for a small downpayment on SGR repeal.

A continuing promise

Rest assured that ACOG’s work to ensure appropriate Medicare payments to physicians, and to ensure that your patients have access to needed care, won’t stop until the job is done.

Can we move from the SGR to a high-performing Medicare program?

ACOG, AMA, and 110 state and national medical societies think so, and prescribe driving principles and core elements for the transition

In their letter to Congressional leaders, ACOG, AMA, and other societies acknowledged the “profound change” sweeping through the US health-care system, noting that it offers a “unique opportunity to improve and restructure how we deliver and pay for care.” When it comes to the SGR, however, these organizations conclude that it is “an enormous impediment to successful health-care delivery and payment reforms that can improve the quality of patient care while lowering growth in costs. Physicians facing the constant specter of severe cuts under the SGR cannot invest their time, energy, and resources in care redesign. The first step in moving to a higher-performing Medicare program must be the elimination of the SGR formula,” they write, based on the following principles, values, and key reforms.

Driving principles

  • Successful delivery reform is an essential foundation for transitioning to a high-performing Medicare program that provides patient choice and meets the health-care needs of a diverse patient population.
  • The Medicare program must invest in and support physician infrastructure that provides the platform for delivery and payment reform.
  • Medicare payment updates should reflect the cost of providing services as well as efforts and progress on quality improvements and managing costs.

Core elements of reform

  • Reflect the diversity of physician practices and provide opportunities for physicians to choose payment models that work for their patients, practice, specialty, and region.
  • Encourage incremental changes with positive incentives and rewards during a defined timetable instead of using penalties to order abrupt changes in the delivery of care.
  • Provide a way to measure progress and show policymakers that physicians are taking accountability for quality and costs.

Recommended structural improvements

  • Reward physicians for savings achieved across the health-care spectrum.
  • Enhance prospects for physicians adopting new models to achieve positive updates.
  • Tie incentives to physicians’ own actions, rather than the actions of others or variables beyond their influence.
  • Enhance prospects to harmonize measures and alter incentives in current law.
  • Encourage systems of care, regional collaborative efforts, and primary care and specialist cooperation while preserving patient choice.
  • Allow specialty and state society initiatives to be credited as delivering improvements (deeming authority) and recognize the central role of the profession in determining and measuring quality.
  • Provide exemptions and alternative pathways for physicians in practice situations in which making or recovering the investments that may be needed to improve care delivery would constitute a hardship.

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