The American Medical Association is expected to propose a three-part approach to changing the Medicare physician payment formula during a congressional hearing Thursday to examine the issue.
AMA to offer payment formula proposal
According to a copy of AMA President Dr. Cecil Wilson's written testimony, the association representing 216,000 of the nation's physicians suggests fixing the current payment system by repealing the sustainable growth-rate formula; implementing a five-year period of stable Medicare physician payments that keep pace with medical practice cost growth; and shifting to new payment models that enhance care coordination, quality, appropriateness and costs.
Wilson's testimony highlights that for nearly a decade, the SGR formula has called for annual reductions in Medicare reimbursements. In 2002, payments were cut by 5%, and Congress has intervened a dozen times since then to prevent additional cuts.
“The 10-year cost of a long-term solution has grown from about $48 billion in 2005 to nearly $300 billion today, and physician payments are scheduled to be cut by 29.5% on Jan. 1, 2012, with cuts potentially coming in future years,” according to the testimony. Providing a permanent solution, Wilson suggests, would provide more stability to patients covered by other payers that tie their rates to Medicare, including military members and their families, retirees in the Tricare program, retired federal employees and those enrolled in state Medicaid programs.
Meanwhile, the AMA recommends that physicians receive positive Medicare physician updates that keep pace with growing medical practice costs for the years 2012-16. “During this time, policymakers, stakeholders and experts would work to develop and transition to a new Medicare physician payment system,” Wilson said in his testimony, adding that this would provide predictability at a time when physicians are making considerable investments in health information technology and quality-improvement initiatives.
Wilson's written testimony also included an attachment detailing demonstration and pilot models that he said “hold great promise” for identifying payment reform methods that improve patient care and quality—as well as physician operating margins—as they reduce the growth of Medicare spending. These include models for payment bundling, patient-centered medical homes and accountable care organizations.
The House Energy and Commerce Health Subcommittee will host its hearing Thursday, May 5. The other hearing witnesses are Michael Chernew, professor of health policy at Harvard Medical School; Dr. Roland Goertz, president of the American Academy of Family Physicians; Dr. David Hoyt, executive director of the American College of Surgeons; Dr. Mark McClellan, a senior fellow at the Brookings Institution; Harold Miller, executive director at the Center for Healthcare Quality and Payment Reform; and Dr. M. Todd Williamson spokesman for the Coalition of State Medical and National Specialty Societies.
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