Rep. Fred Upton (R-Mich.), chairman of the full committee, said that while Congress can't afford the current rate of spending in physician services, it recognizes the pending 29.4% fee cut to physicians—scheduled for Jan. 1, 2012, to bring rates in line with the SGR formula—will force doctors out of the Medicare program and result in a large number of Medicare beneficiaries losing access to services. Addressing the issue is on the committee's “short list of getting things done this summer,” Upton said.
American Medical Association President Dr. Cecil Wilson testified the SGR formula has called for payment reductions since 2002, when payments were cut by 5%. Since then, Congress has intervened a dozen items to prevent additional cuts. And because funding wasn't provided to reform the formula, the current Congress must address even steeper cuts.
Wilson presented a three-part solution that suggests repealing the sustainable growth-rate formula and implementing a five-year period of stable Medicare payments as policymakers and stakeholders develop a permanent solution. The third element calls for transitioning to a range of new payment models that improve the coordination, quality, appropriateness and costs of care.
Dr. Roland Goertz, president of the American Academy of Family Physicians, and Dr. David Hoyt, executive director of the American College of Surgeons, proposed similar ideas, with Goertz suggesting that the payment update to primary-care physicians during the five-year transition period be 2% higher.
When asked by Rep. Frank Pallone Jr. (D-N.J.), if he thought there was consensus among the nation's medical societies on the issue, the AMA's Wilson highlighted the consensus around those three areas.
Former CMS Administrator Dr. Mark McClellan testified that any payment fix should be coupled with more support for improvements in care that also result in cost savings. He gave the example of Kansas City (Mo.) Cancer Center, where oncologists have partnered with United Healthcare. While the oncologists still get paid for costs related to the chemotherapy they administer, they receive a bundled payment that is not tied to giving more intensive chemotherapy. Instead, the payment provides support for the treatment protocols the physicians deem most important.
During a brief recess in the hearing, McClellan told Modern Healthcare that healthcare providers should not wait to apply these new payment models.
“I think we've done a good deal of testing over the last five years,” McClellan said. “There are a lot of things going on in the private sector and state programs and regional collaborations and other physician-led efforts that are showing you can get better care and lower cost in a wide range of medical specialties and across coordination of care among medical specialties,” he said. “Start now.”