Physicians Ask Congress for SGR Alternatives

Physicians' advocates have asked Congress to scrap Medicare's widely reviled sustainable growth rate (SGR) payment scheme and replace it with flexible payment options that reward quality and efficiency.

The House Ways & Means Committee in April had asked the American Medical Association and the Medical Group Management Association to suggest alternatives to the SGR, which is scheduled for a 30.9% reduction on Jan. 1, 2013.

AMA CEO James L. Madara, MD, in a May 25 letter to the committee said any cost-efficient payment model redesigns should give physicians the resources and flexibility to keep patients healthier, improve care coordination, manage chronic conditions, reduce duplication of services, and prevent avoidable admissions. 

"For Medicare's physician payment system to move in this direction, there needs to be a transition period with opportunities for physicians to move into innovative payment and delivery models in ways that enable them to gain skills and experience in taking accountability for improving care and lowering growth in costs," Madara wrote.

"Physicians should have opportunities to help design an array of innovations and choose those that best fit their specialty, practice, patient population, capabilities, market, partners, and resources."

Madara told the committee that a "full menu of innovations" must look beyond shared savings programs and accountable care organizations, and toward initiatives that include performance-based and bundled payments, global- and condition-specific payments, warranties for care, and medical homes.

In addition to flexible payment models, Madara said physicians also need flexible implementation dates "available on an ongoing basis so physicians can plan for the needed changes and join as they become ready."

MGMA President/CEO Susan Turney, MD, in her letter "strongly" urged Congress to repeal SGR as a critical first step in payment reform, and replace it with "stable payments for a period of several years to allow testing of different payment and delivery models, and then allow for a transition to new models."

Turney offered alternative payment models that were largely identical to those suggested by Mardara. The MGMA leader praised the committee for acknowledging that a new payment model cannot be a "'one size fits all' method given the diversity of medical practices. Physicians should have the flexibility to adopt different approaches based on their composition, capabilities and community needs."

MGMA also wants to "break down the silos" that separate payment systems for Medicare Part A and Part B so that different practice models can be accommodated.

"According to the Congressional Budget Office, physician spending only represents 13% of all Medicare spending versus 32% under Part A (hospital inpatient services and SNF)," Turney wrote.

"To truly address costs, incentives must be aligned to encourage physicians to reduce spending in the highest cost areas of the Medicare program. Many of the new emerging models will only succeed if the silos are broken down, allowing physicians and hospitals to work together to prevent hospitalizations and provide cost effective care."