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AMA President: Physician Fee Schedule Obsolete

John Commins, for HealthLeaders Media, October 20, 2009

American Medical Association President J. James Rohack, MD, says budget neutrality in the healthcare reform debate should not derail the push to abolish what he says is an obsolete Medicare physician fee schedule that will carve out up to $245 billion in payment reductions for physicians.

"From a practical standpoint, this problem predates any discussion of health system reform by this current president," Rohack tells HealthLeaders Media. "This problem was adopted in 1997. The first problems in cuts started in 2001. This is a leftover problem that should be standing on its own and should be fixed on its own and not be considered part of a new package that a new president is considering."

Rohack is in Washington this week to lobby the Senate in support of the Medicare Physician Fairness Act of 2009, or S. 1776.

Budgetary rules require Congress to offset any increased spending for healthcare reform under a sustainable growth rate formula that was implemented in 1997. S. 1776, sponsored by Sen. Debbie Stabenow, D-MI, would reset the SGR formula to zero and eliminate what is estimated to be up to $245 billion debt that has accumulated during the past six years as a result of Congress' annual fixes to ensure physician payments were not reduced.

The AMA, the American Academy of Family Physicians, and other physicians' organizations have banded together in support of the bill.

Rohack says the new emphasis on cost-saving, patient-centered, preventative care makes the SGR formula obsolete. Abolishing the formula, he says, would allow Congress to develop a new payment system that rewards efforts to treat and control chronic diseases, and reduce hospitalization. "This formula is designed to make cuts as volumes go up. It's an old formula that doesn't reflect what 21st medicine is and will become even more in the future," he says.

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