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Lawmakers Seek SGR Alternatives, But Who Will Pay?

Joe Cantlupe, for HealthLeaders Media, June 1, 2011

Unlike the SGR, which bases reimbursement on the overall spending on all physician services, a proposed new system, the "separate service category growth rates" (SCGR) would determine reimbursement based on the spending and volume growth among services. Among the advantages: it recognizes that all physician services are not alike, and lower growth services, such as primary care, would no longer be the subject of the "blunt cuts" of the SGR, according to Salgian.

 "There's a recognition of a need for three to five years of stability and let's figure out what this new replacement can look like," Salgian says. "The healthcare reform law has a number of demonstration projects in there, including accountable care organizations, bundling projects, shared savings models, and shows what this system may look like."

Indeed, according to the HealthLeaders Media Industry Survey 2011, more than half, (52%) of physicians surveyed said they expect to be part of an ACO within the next five years.

"Quality improvements have got to be part of this," Salgian adds. "We understand that costs need to be brought down and quality improvements help bring those costs down. We are working with other physician groups to put together these proposals. There should be a separate service category where primary care, surgery and others, three to five separate targets, rather than one global target for all physicians,"

David Hoyt, MD, FACS, a trauma surgeon and executive director of the American College of Surgeons, testified before the House Energy and Commerce health subcommittee, noting that the "current fee-for-service model" is unsustainable.

"Any new payment system should be part of an evolutionary process that achieves the ultimate goals of increasing quality for the patient and reducing the growth of health care spending – goals we do not believe are mutually exclusive," Hoyt said in his testimony.

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