Q&A: Ardis Dee Hoven 'Optimistic' SGR Will Be Repealed

Citing bipartisan support in Congress, Ardis Dee Hoven, MD, president of the American Medical Association, believes a "doc fix," in the form of a total repeal of the sustainable growth rate funding formula for physicians, is imminent.

After years of lobbying, the American Medical Association may be close to witnessing the repeal of the much maligned Sustainable Growth Rate funding formula for physicians. An amendment in the bipartisan budget deal that emerged this week in Congress calls for repealing the SGR permanently and creating a three-month long bridge to prevent the looming 24% cut to physician Medicare reimbursements.

AMA President Ardis Dee Hoven, MD, spoke with HealthLeaders Media on Wednesday about the AMA's latest efforts to repeal the SGR, and why it's different this time around. The following is an edited transcript.

HLM: The AMA has tried unsuccessfully for years to get repeal SGR. What's different this time?

ADH: This time the momentum and bipartisan bicameral support for repealing SGR getting us to a better place is well underway. The collaborative effort, the work that these committees have been doing in terms of listening to us and understanding and incorporating our recommendations into the proposed pieces of the legislation is important and we are appreciative. It started with the [House] Energy and Commerce Committee [which] came out with their bill in late July to get the ball rolling.

HLM: But why has the momentum finally shifted toward permanent repeal?

ADH: Everybody is tired of having to deal with this on an annual basis. The concept is destabilizing the Medicare program [and that] is something that most people and members of Congress just cannot tolerate. Then, for the first time, we saw a significant fiscal change around repealing the SGR.

We have paid something like $146 billion over the last ten years just patching it and now the Congressional Budget Office is marking this at about $116 billion to replace it. The numbers are getting better. It's the fiscally responsible thing to do and members of Congress understand this.

HLM: How will the repeal of SGR be funded?

ADH: The AMA and physician leadership have been talking about policy and what we think is in the best interests of patients and the Medicare program. We understand the fiscal issues. We understand the pressures that members of Congress are under right now and their fiscal responsibilities as they manage that. We are going to have to entrust that to them, knowing that this is going to be difficult for them. But I am convinced that they are going to do this. I am very optimistic about this and I am anxious to see it through.

HLM: What replaces the SGR?

ADH: What happens is a total repeal. It is my understanding that we will have about three years of payment updates. That is what is being proposed right now by the Ways and Means Committee—of about .5%. That will allow physician practices to stabilize and allow them to begin to move to new alternative payment models such as accountable care organizations, primary care medical homes, bundled payments, and other models of payment around delivery and have that period of transition to these new innovated models of care. That is what is going to replace SGR.

HLM: What should we look for in the coming days and weeks?

ADH: We know the mark ups are going to happen on Thursday. We are going to see the (House) Ways and Means and [Senate] Finance committee beginning to do their final evaluations of amendments and… giving us solid information as to what they are going to propose in their legislation.

HLM: How will we know that this thing is still on track in the coming days and weeks?

ADH: You will see evidence of it fairly soon. You are going to see bipartisan support for this. You are going to see support from the medical communities, [and ]the state and specialty societies as well. You are going to see some bipartisan support financially for how this is going to be managed. That's when we will know it's go on track. 

HLM: Will any of this happen by the end of the year?

ADH: The cut of 24% that we would normally experience this year would go into effect on Jan. 1. We know that Ways and Means is proposing a bridge of three months, which is really a pathway to get us to repeal. We want them to get it correct and make sure that all the 'I's are dotted and the 'T's are crossed. We are very supportive of this bridge period to get us to the permanent repeal.

We know that during that bridge there will be a .5% payment update for the three months and then starting with the calendar year, the new proposal would go into place. Things are actually stabilized. The plans are in place. Members will go home for the holidays. They will return and continue to complete their work.

HLM: What are the biggest threats to the SGR repeal?

ADH: The threats are getting less and less as the days go by. From my perspective there aren't any significant threats out there at this point. The important thing is not just repealing SGR but getting the elements changed that we felt strongly about. We have already seen that happen with pieces around the quality reporting issues, the payment for care coordination services, and development and implementation of alternative payment models. These sorts of things we have already worked significantly through with Congress.

The big issue of late has been the payment updates over a period of years to stabilize Medicare, and the Ways and Means Committee announcement is that they are going to propose a three-year stabilization period with payment updates, which is very good and supportive of where the AMA and physician leadership have been.

HLM: What should individual AMA members and other physicians do to help?

ADH: They need to stay tuned. They need to watch our website and our information which is going to be rapidly rolling out to them about what is happening, what the plan is, what the process is, and what they need to be doing about it. Until we see the final language… they need to stay informed.

When we say it's time to encourage calling they need to do it. If they already have a strong relationship with their members of Congress they should be on the phone or electronically talking to them about the need to repeal SGR permanently and to advocate for the changes we are recommending to Congress.