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MedPAC commission endorses proposal to repeal sustainable growth rate
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The Medicare Payment Advisory Commission has voted to endorse a proposal repealing the sustainable growth rate, replacing it with a 10-year alternative funded in part through 5.9% Medicare specialist payment cuts over the next 3 years followed by a 7-year payment freeze, according to a Medicare Payment Advisory Commission spokesperson.
Announced last month by the Medicare Payment Advistory Commission (MedPAC), the proposal also includes a 10-year freeze of payments to Medicare primary care physicians.
The recommendations have been opposed by a number of organizations and associations, including the American Medical Association (AMA), American Association of Orthopaedic Surgeons, the American College of Surgeons, the American Orthopaedic Foot and Ankle Society, the North American Spinal Society and The Endocrine Society — all of which, among others, signed a letter sent to MedPAC on Oct. 3.
“The AMA strongly opposes the Medicare physician payment recommendation voted on today by MedPAC,” AMA president Peter W. Carmel, MD, stated in an AMA release. “The commission joins many groups who have put forth proposals to repeal the broken Medicare physician payment formula. However, offsetting part of the cost of repeal through drastic cuts and long-term freezes to physicians falls far short of what is needed to preserve patients’ access to care.”
“The recommendation voted on today by MedPAC flies in the face of their previous recommendations to stop harmful physician cuts that threaten access to care for patients,” Carmel added. “The failed Medicare physician payment formula was created by Congress and the cost of repeal has increased over time due to the budget gimmicks they used to finance frequent short-term fixes. Congress must act now to permanently repeal the formula and stabilize the Medicare system for patients and physicians.”
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The sustainable growth rate (SGR) adopted in 1997 was used to replace the previous Medicare Volume Performance Standard (MVPS) system to attempt to make certain that the Medicare beneficiary cost did not exceed the growth in gross domestic product (GDP) of which health care costs now compromise between 17% to 17.5%. The SGR for 2010 was -8.8%, and the conversion factor for the physician’s fee schedule, therefore, is approximately -21.3%. The implementation of the SGR has been delayed until Jan. 1, 2012. This system is clearly obsolete, because it always will result in a decrease in physician fees due to the negative cash flow associated with health care costs and as a percentage of GDP.
Unfortunately, a 5.9% decrease in physician fees compared to the proposed 17.5% decrease may be as good as we are going to get, and perhaps that is what MedPAC realizes. Using the government’s method of discounting the conversion factor, which is what Medicare did this past year (6% decrease), they can argue that the relative value units (RVUs) have not been reduced; but once a lowered conversion factor is applied, the reimbursement to the physician is always decreased.
— Jack M. Bert, MD
Orthopedics
Today Business of Orthopedics Section Editor
Woodbury, Minn.
Disclosure: Bert has no relevant financial disclosures.