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Lawmakers urged to seize the moment on Medicare SGR reform

At the first Medicare hearing of the session, House members set a goal to eliminate the unstable payment formula this year.

By Charles Fiegl — Posted Feb. 25, 2013

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After years of uncertainty and temporary fixes to Medicare's problematic payment system for physicians, lawmakers said they are committed to working with doctors on the reforms needed to build a better program.

Congressional leaders spoke with physicians during the American Medical Association National Advocacy Conference in Washington in February about the urgency of fixing the flawed sustainable growth rate formula used to calculate physician payments in Medicare, as well as addressing other problems in the national health system.

Congress has passed overrides to prevent SGR cuts to Medicare 15 times since 2002, noted Rep. Fred Upton (R, Mich.), chair of the House Energy and Commerce Committee. Congress once again has an opportunity to address Medicare payment issues, but this time on a permanent basis, he said.

The Congressional Budget Office estimates that eliminating the SGR would cost $138 billion over 10 years, which is down from a projection of $244 billion in November 2012 and of nearly $300 billion in June 2011. Paying for the elimination of the SGR has been a main obstacle for lawmakers, Upton told physicians attending the conference on Feb. 13.

“It's obviously a very large amount, but a smaller mountain to climb,” Upton said. “The main point is that we have a window of opportunity to finally address the significant problem the president left out of his health reform law.”

Upton said the Affordable Care Act not only did not address the SGR, but also created the Medicare Independent Payment Advisory Board that the AMA and other organized medicine groups oppose. The 2010 health system reform law also failed to change the medical liability system, he added.

The reform law did provide an insurance coverage expansion to millions of Americans and offer new public health initiatives, Sen. Sherrod Brown (D, Ohio) said later at the conference. He encouraged physicians to meet with their representatives and discuss making the U.S. health system better. He suggested that physician practices invite members of Congress to visit their offices to see how regulations and laws affect them.

“One of the first things I did my first year in Congress, I went to an ophthalmologist's office, because I wanted to see what they did,” Brown said. “I spoke with him about payment issues but also saw how he did his job.”

Hearing marks opening salvo on SGR

Upton received applause from AMA members when he stated his goal of moving an SGR repeal bill to the House floor this year. The next day, the Energy and Commerce health subcommittee began working on that goal by holding a Medicare hearing.

The Medicare Payment Advisory Commission had recommended repeal as far back as 2001, Glenn Hackbarth, the commission's chair, told the panel. Continuation of the SGR poses an increasing risk to patients. Although there has not yet been evidence of risk on the national level, MedPAC's fear is that patients could lose access to physicians if the SGR continues. There also is a tight market of physician supply and demand in certain areas, which could become ground zero for a health crisis for beneficiaries, Hackbarth said.

The latest offset estimate from CBO provides a window of opportunity for Congress, he said. “The SGR repeal is now on sale, but the sale may not last forever.”

DID YOU KNOW:
Congress has passed overrides to prevent SGR cuts to Medicare 15 times since 2002.

At the same time, SGR repeal is too expensive to pay for just with cuts to other areas of Medicare, said Rep. Frank Pallone (D, N.J.), the top-ranking Democrat on the subcommittee. “I worry that every time there needs to be changes to meet the SGR goal or to deal with other health care initiatives … we always assume the cuts have to be within the health care system,” he said.

Pallone added that many are delighted to see the projected cost of SGR repeal is at its lowest level in years, but $138 billion is a significant amount of money. He suggested shifting the cost burden away from health programs by tapping unused overseas contingency funds from the drawdown of foreign wars to pay for repeal.

Use of war funding, however, is not a serious option, Upton told a reporter after the AMA conference.

The Medicare program has experienced a low period of growth for utilization of physician and other services, and no one knows for sure what is driving the trend, Hackbarth said. Many look to the recession as the primary reason for the slow growth, but Medicare patients continued to have access to coverage during the economic downturn.

Public health factors, such as relatively light flu seasons and decreases in imaging utilization due to cost and radiation exposure concerns, also may be playing a part. Others speculate that more people in the health care system have recognized that the payment landscape is changing, and they are preparing for the shift by restraining spending, he said.

Regardless of the cause, the AMA in a statement urged the subcommittee and Congress to “take advantage of the fact that the cost of repealing the SGR is lower than it has been in many years and move promptly to replace the formula with a new system that encourages quality care while reducing costs.”

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ADDITIONAL INFORMATION

Accountable payment for all

Alternative payments should be available to all physicians, including those who are not in large practices or systems, said Harold Miller, executive director of the Center for Healthcare Quality & Payment Reform, during a recent congressional hearing. He gave several examples of how accountable payment models can be aligned to different specialties, including:

Cardiology: Offer a condition-based payment that allows physicians to redesign coronary artery disease care delivery regardless of treatment type or site of service.

Gastroenterology: Enable physicians to manage inflammatory bowel disease and reduce unnecessary hospitalizations.

Neurology: Create a condition-based payment that enables physicians to manage all epilepsy care needs, including preventive care measures.

Obstetrics-gynecology: Offer a single payment to physicians for labor and delivery, which frees the doctor and patient to choose the best method of delivery and location.

Source: Testimony of Harold D. Miller to House Energy and Commerce health subcommittee, Feb. 14 (link)

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