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Medical Groups Sound Alarm on SGR 'Crisis'

Cheryl Clark, for HealthLeaders Media, September 30, 2010

In a letter to U.S. House of Representatives Speaker Nancy Pelosi and House Minority Leader John Boehner, the medical groups said that if there is no action to prevent the SGR from taking effect, the 23% cut take for Medicare and TRICARE payments for physician services would be followed by another reduction.

"To make matters worse, an additional cut of 6.5% will follow on Jan. 1, 2011.  Physician practices simply cannot absorb cuts of this magnitude in programs as important as Medicare and TRICARE," they wrote.

The situation is causing indirect havoc to physician practices as well, they explained.

Congress enacted short-term stopgap measures, but three times failed to act in time and Medicare payment cuts of more than 20% went through.  The Centers for Medicare and Medicaid held back payments until the legislation was passed.

However, the groups' letter emphasizes, there were highly disruptive consequences. "Many practices were forced to seek loans to meet payroll expenses, lay off staff, or cancel capital improvements and investments in electronic health records and other technology," their letter says.

"Furthermore, when payments resumed, many physicians experienced long delays in receiving retroactive adjustments. This is not the way to manage a program that seniors and the disabled rely on; Congress must act to avoid a repeat of the disruptive cuts that occurred this year."

And there could be political fallout as well from seniors who could end up paying more. The medical groups stated that they envision many doctors who now accept Medicare's allowance as payment in full are considering switching their status to that of a doctor who does not participate in Medicare.

Then, their patients will receive bills for more than the Medicare allowance.

"In the meantime, there is an imminent crisis," the letter continues. "A statutory payment update that lasts at least through the end of 2011 will provide time for Congress and the physician community to develop a long-term solution, to ensure that seniors can count on finding physicians to care for them, and that physicians will not view Medicare and TRICARE as threats to the viability of their practice."


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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