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Medical Groups Sound Alarm on SGR 'Crisis'

Cheryl Clark, for HealthLeaders Media, September 30, 2010

The dreaded sustainable growth rate formula (SGR) that cuts physicians' Medicare pay takes effect in 61 days (Dec. 1) but already the American Medical Association, 66 specialist practitioner societies and 50 state medical groups, are sounding the alarm.  Again.

If nothing is done, the 23% cut in physician fees Dec. 1, will be followed by another 6.5% cut Jan. 1, reductions that could seriously impair the ability of seniors to access care because many physicians who now accept Medicare beneficiaries will stop doing so, physician groups say.

"The AMA is calling on Congress to immediately address this impending crisis when they return to Washington after the November elections," AMA President Cecil B Wilson, MD, said in a statement.

"Without action to stop the cuts, Congress will create a Medicare meltdown with access to care threatened for seniors and baby boomers who will begin entering Medicare in January," Wilson said.  "Ultimately, a permanent solution must be passed to fix this broken system, but Congress must first stop the 30% payment cuts threatening seniors' access to care now."

The SGR has called for across-the-board reductions in physician payment rates to take effect in every year since 2002. But every year, the cuts have been postponed by legislation, after dire warnings and alarms from medical groups.

On June 25,  after similar campaigns, the reductions were postponed again when President Obama signed into law Congressional legislation that postponed the SGR's implementation of 21.3% cuts, plus a physician fee increase of 2.2% through Nov. 30. Combined, they total a 23.5% decrease in reimbursements through Nov. 30. 

The SGR formula has called for an across-the-board reduction in physician payment rates every year since 2002, and since 2003, through May 31, 2010, the cuts have been averted by legislative action. Last week, after a sustained battle, Congress finally approved—and President Obama signed into law on June 25—a provision postponing the SGR through Nov. 30. The reduction called for the SGR (21.3%)—plus an increase in physician rates approved by Congress (2.2%)—would essentially create a 23.5% decrease in reimbursements.

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