Physician association members testifying before a House Energy and Commerce committee hearing May 5 offered alternatives to the SGR formula, which mandates a 29.5% physician pay cut in 2012.
In the hearing, American Medical Association (AMA) members recommended that Congress repeal the Sustainable Growth Rate (SGR) formula immediately, establish five years of positive Medicare payment updates on practice costs, and use the borrowed time to test and evaluate various payment models to find a permanent fix.
Both the AMA and the American Academy of Family Physicians (AAFP) support a five-year transition. Reworking the payment system during the transition would ensure continued access to care for Medicare beneficiaries, said Michael Burgess, M.D. (R-Texas), a subcommittee member. Repealing SGR will be costly, he added, but the current payment system has to go.
A controversial option on the table is private contracting, which would allow patients and physicians to negotiate freely for most outpatient Medicare services without penalty. Medicare rates would apply for emergency medical services or urgent care.
Private contracting is in the Medicare Patient Empowerment Act, introduced by Rep. Tom Price, M.D. (R-Georgia). While some lawmakers like the idea, others cringe at the thought of its introduction in a system now restrained by the threat of civil and criminal charges. Removing that blanket, patient advocates argue, could unleash behaviors that drive up healthcare costs and impair availability of care.
“These proposals serve to fundamentally undermine the purpose of the Medicare program by unraveling the protections against high costs that prevent people from accessing the care they require," said Joe Baker, president of the New York-based Medicare Rights Center.