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Lawmakers Seek SGR Alternatives, But Who Will Pay?

Joe Cantlupe, for HealthLeaders Media, June 1, 2011

"The system that is currently used to pay physicians for providing services to beneficiaries in the Medicare system is broken and has been for some time," said Rep. Joseph R. Pitts, (R-PA), subcommittee chairman, in a statement. "The dilemma that currently threatens doctors and Medicare beneficiaries alike is all too familiar. According to the most recent Congressional Budget Office estimate, if nothing is done, physicians will see reimbursement for services provided to Medicare patients by 29.4% on Jan. 1, 2012, according to Pitts.

According to the AMA, many physicians, faced with cuts, want out of Medicare. As many as 82% of physicians say they will need to make significant changes in their practices that will affect access to care, according to the AMA. We have been here before.

Meanwhile, the cost of fixing the problem continues to grow, as Pitts calculates it. In March, the CBO estimated that the price just to wipe out the accumulated debt and return to a baseline of the SGR would be about $298 billion.

"We've been doing this for 10 years, dealing with the 'doc fix.' In reality it's not good for doctors, it's not good for patients; just in terms of going through this every year," says Christian Salgian, director of the division of advocacy and health policy for the American College of Surgeons. "Somewhere around October, November, or December, depending on the year, it gets down from discussions of a long term fix, 'let's get something done here' to "let's stop the cut." There is a shift in mindset with some kind of desperation. It's just kicking the can for another year, and nobody supports that. We're talking about 30% cuts for another year, and all we would be doing is hiding the cuts for another year."

Salgian says Congress has to deal with the $300 million in possible cuts and get rid of the SGR. Once the SGR is eliminated, legislators can work on a timeframe that would allow demonstration projects to be examined under a new Medicare physician payment system, the subcommittee was told by the physicians, and not a "one-size-fits-all formula."

Specifically, they are proposing to replace the SGR with a separate service system that they say recognizes the unique various types of physician services, while allowing for increased payments for areas experiencing workforce shortages like primary care. 

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