In April, the U.S. House Ways and Means Committee sent letters to 70 physician and healthcare organizations seeking their input to find a "long term solution" to—or at least viable options for—the existing Sustainable Growth Rate formula that doctors desperately want to change.
"Republicans and Democrats alike agree that continuing to do temporary, short-term patches is a less than ideal way to deal with the physician payment issue," a House Ways and Means spokeswoman told HealthLeaders Media. She declined to be identified here.
"Steps must be taken toward a permanent legislative solution, and that requires gathering the input of the stakeholders most affected on the front lines—our physicians and the patients they treat," the official added. The letter "is an important step toward securing the input of these stakeholders and will be instructive in how the process moves forward."
The House letter invited physicians groups to offer their guidance and suggestions concerning various financial structures for improved care. In response, physician groups asked Congress to scrap the SGR and replace it with flexible payment options that reward quality and efficiency.
Under the current SGR structure, Medicare physician payments would be reduced 30.9% on Jan 1, 2013, unless, of course, Congress can be counted on to stop it—which they have continually done, in a one-step, two-step for years. The ongoing threat of reduced payments, while the physicians groups' payment needs increase each year, destabilizes their business operations and planning, as long as the formula stays in place.
On the surface, the mere focus of the letter on the SGR suggests immediate hope.
Don't believe it, insiders say. It's probably illusory.
SGR reform absent from GOP's agenda
For one thing, it's summer and it's an election year—a double deal-breaker for advancing issues in Washington. Absolutely nothing will happen regarding the SGR, not for months, or possibly this year, I am told. In addition, Republicans have a different healthcare focus, not the SGR: The GOP priority is getting rid of "Obamacare."
That push is reflected in a separate Washington D.C. document making the rounds. It's a memo from Rep. Eric Cantor, (R-VA), the House majority leader, sent to his GOP colleagues over the Memorial Day weekend. I received a copy. It makes no mention of SGR.
Instead, Cantor mentions what the GOP may tackle if the Supreme Court overturns President Obama's healthcare reform. The court is expected to consider challenges to the law sometime in June.
"Independence Day to August, Americans will rightly be focused on the effects of the Supreme Court's ObamaCare decision when we return from July Fourth," Cantor writes. "Although we do not know how the court will rule, we are prepared to move forward to ensure that the whole unworkable law is fully reported."
"We have a busy legislative agenda planned this summer and our schedule will undoubtedly require further additions," Cantor adds. "I hope this memo provides you and your constituents with an outline of our pro growth plans for the months ahead."
Obviously, Cantor's agenda is not set in stone, nor is it reflective of what the House may do, although 240 Republicans and 190 Democrats are seated in this legislative session. But it does give an idea that the SGR is not a key consideration. "Hey," one healthcare organization official told me about Cantor's letter, "it's politics."
Payment reform requires flexibility
The House Ways and Means Committee's letter to physician groups, however, makes it seem that the committee is serious about looking into changes around the SGR, but offered no timetable as to when it would act.
The House letter invited physician groups to look into various financial issues faced by doctors, as well as organizational alignment strategies.
"Given the SGR situation and the long-term fiscal challenges faced by the Medicare program, this committee recognizes the urgent need to transform Medicare's physician payment system to one that preserves and promotes the patient-physician relationship and rewards physicians for the high-quality and efficient care they provide," says the committee's April 27 letter to physician groups.
"Experts agree that there is no 'one-size-fits-all' solution and that a reformed payment system will require some flexibility to account for the diverse needs of both beneficiaries and physicians," the letter adds. "As we continue to work toward a permanent, fiscally responsible solution for the SGR, we are seeking input from the physician community and other stakeholders."
Short-term fixes result in deficits
The committee noted that Congress has repeatedly enacted legislation to avert scheduled rate cuts since 2003. It also said that the short-term fixes have resulted in deficits of $300 billion over the past decade.
In response to the House Ways and Means Committee letter, American Medical Association CEO James L. Madara, MD, pointed to payment rules under Medicare Part A and Medicare Part B that have "not adapted to the increased use of physician services vs. hospital services." The AMA adds, "This imbalance creates disincentives for physicians who are working hard to provide the most efficient and efficient care for their patients."
An official of the AMA, who also declined to be identified, commented later on the letter, saying, "Eliminating the formula remains a top priority for the AMA and this letter is one step in working with Congress to see that goal achieved." The official noted that the Senate Finance Committee had a roundtable discussion on the SGR in March.
Physicians' groups offer payment models
Both the AMA and the Medical Group Management Association Medical Group Management Association have offered the House Ways and Means Committee similar payment models to consider that would advance payment reform.
In her letter, MGMA President/CEO Susan Turney, MD, said she supported "looking at various payment reform models, and the MGMA supports the testing of new models that promote integrated care delivery and encourage cost-effective medical treatment" Options for evaluation include bundled payments, partial capitation, accountable care organizations, medical homes and "other hybrid approaches that couple fee for service payments with a risk based bonus opportunity," she adds.
But "first and foremost," Turney wrote, Congress must act to permanently "repeal the flawed SGR formula used to annually update Medicare physician payment rates." In the process, Congress should test other payment and delivery models, she added. "Physicians should have the flexibility to adopt different approaches based on their composition, capabilities and community needs."
That all sounds fine. Whether the House Ways and Means Committee does anything remains to be seen.
A year ago last May, the House Energy and Commerce Committee's subcommittee on health conducted a hearing, "The Need to Move Beyond the SGR."
"The committee sent a similar letter last spring (to that of the House Ways and Means Committee, soliciting physician input)" says a healthcare organization official. "And nothing happened."
Joe Cantlupe is a senior editor with HealthLeaders Media Online.
