TMA: Make SGR Replacement Plan Better

TMA told congressional leaders it "generally supports" their efforts to replace the Sustainable Growth Rate (SGR) formula, which continually threatens drastic cuts in Medicare payments to physicians, but offered suggestions to make the reform effort even better. TMA President Stephen L. Brotherton, MD, made the suggestions to improve the SGR Formula Replacement Proposal in a letter to leaders of the House Ways and Means and Energy and Commerce committees and two of their subcommittees.

 Among Dr. Brotherton's suggestions are:

  • The plan to replace the SGR with a "period of stable payments" must cover physicians' practice operating costs, be updated annually in a way that covers increased operating costs, and at least equal the annual Medicare Economic Index increase.
  • Keep payment for services rendered (fee for service) as a major payment option.
  • An update to Medicare payment locality definitions is overdue and should be required for all multilocality states, not for a select few.
  • A proposal to design new methods for assessing and rewarding quality care does not mention the Medicare value-based payment modifier starting in 2015. TMA hopes Congress will not just add another "quality" program, but replace the current program, "which has serious flaws and may result in financial penalties for physicians who treat disadvantaged patients." 
  • Prohibit performance measurement methods that depend on patient compliance. Do not penalize a physician for a patient's refusal to undergo recommended treatment or diagnostic procedures.
  • Do not impose new administrative requirements unless they produce quantifiable returns.
  • Implement efficiency incentives only if they are developed by physicians, tested in a wide variety of patient care settings, and proven to produce no adverse consequences on patient care.

"There is also an unstated, yet very alarming, premise when discussing efficiency," Dr. Brotherton wrote. "To be efficient, one must produce or be capable of producing an intended result within a defined set of resources. TMA is concerned about who decides the appropriate resources (and number or amount of resources) that should be brought to any particular patient. The decision on the care that is to be brought to a patient for cure or alleviation of discomfort, pain, or suffering is traditionally left to the patient and physician. Deciding upon whether any particular course of treatment is worth the resources to be expended is extremely value-laden. TMA suggests the government should avoid intervening in these decisions."

The American Medical Association also wrote congressional leaders that "eliminating the SGR formula is essential to developing a high performing Medicare program." AMA said these "driving principles" can be a foundation for a transition plan that organized medicine can support:

  • Successful delivery reform is an essential foundation for transitioning to a high-performing Medicare program that provides patient choice and meets the health care needs of a diverse patient population.
  • The Medicare program must invest and support physician infrastructure that provides the platform for delivery and payment reform.
  • Medicare payment updates should reflect the costs of providing services as well as efforts and progress on quality improvements and managing costs.

Action, June 14, 2013


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