Doc groups lean on lawmakers for Medicare SGR fix

Congress has been relatively quiet regarding its efforts to repeal the Medicare sustainable growth-rate physician pay formula, but physicians are keeping the pressure on lawmakers—even if they aren't pitching any ideas to cover the $126 billion price tag.

One healthcare expert warned about a potential fight between hospitals and physicians over paying for the SGR Repeal and Medicare Provider Payment Modernization Act of 2014.

But the American Medical Association and other physician groups are staying out of the “pay-for” discussion.

In a slight contrast to their colleagues' silence, the Alliance of Specialty Medicine sent a letter to Congressional leaders. It was signed by 12 specialty societies who urged that “any offsets identified are acceptable to ensure swift enactment of a permanent and meaningful solution to the flawed Sustainable Growth Rate formula prior to the expiration of the current SGR patch on April 1, 2014.”

An SGR-driven 24% pay cut is set to go in effect if Congress doesn't act by March 31, and Congressional leaders have already rejected a proposal to include a nine-month delay of the pay cuts in the bill raising the nation's debt ceiling. That would have been the 17th temporary legislative “patch” delaying SGR-driven payment decreases, and the previous 16 have cost $153.7 billion. The 11-year anniversary of the first SGR patch, included in an appropriation bill signed by then-President George W. Bush on Feb. 20, 2003, is fast approaching.

In a letter to Congress signed by the AMA and 112 other state and specialty associations, doctors called enacting another short-term patch fiscally responsible and an impediment to healthcare-delivery innovation.

“The legislation introduced last week is the product of more than a year of bipartisan, bicameral work to build a stronger Medicare program,” the letter stated. “Short-term remedies are no longer acceptable.”

The Coalition of State Medical Societies, a group of nine state medical associations with 158,500 members, expressed its support for the legislation, saying in a letter that it “represents a marked improvement over the status quo” and that SGR repeal was long overdue.

“The irrational cuts mandated by the SGR have hung like an annual albatross around the necks of physicians, Congress, and our associations for more than a decade,” according to the letter.

The coalition, which comprises Arizona, California, Florida, Louisiana, New York, North Carolina, Oklahoma, South Carolina and Texas state medical societies, also noted that physician payment increases were long overdue but questioned whether the bill's proposed five years of 0.5% pay hikes would be sufficient to cover increases in practice expenses.

The same concern was expressed by Dr. William Jessee, former president and CEO of the Medical Group Management Association and now a senior vice president with the Integrated Healthcare Strategies consulting group. Jessee noted that medical practice expenses—such as salaries, rent, utilities, information technology, insurance and supplies—have been increasing at an annual rate of about 5%. The only way practices will be able to make ends meet with 0.5% pay raises is to increase their volume.

“And that is the very problem that is pushing Medicare to the verge of bankruptcy,” Jesses said. “My prediction is that, if this bill is enacted, we will be having the same debate about how to control Medicare costs in 2015, '16, '17 and beyond that we have been having for the last several decades.”

While Jessee said “there is much to like about the bill,” especially the stability it would create by “eliminating the annual melodrama” over looming SGR-driven pay cuts, he still had many concerns.

“First and foremost is the question of how this will be paid for,” Jessee said in an e-mail. “Hospitals know that they are a big target, and the American Hospital Association is already mobilizing to fight any effort to pay for the SGR fix by reductions in hospital Medicare funding. If we have hospitals and doctors pitted against one another over this bill, the only way I can describe the likely result is 'UGLY.'”

Follow Andis Robeznieks on Twitter: @MHARobeznieks