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    Proposed sustainable growth rate solution met with criticism


    Bob Gatty
    Washington—As politicians in Washington battle to find ways to reduce the burgeoning federal deficit, organizations representing physicians, including urologists, are hoping to include reform of the formula used to pay physicians under Medicare as part of whatever deal is worked out.

    But there is worry that the ultimate cure for the sustainable growth rate (SGR) malady could end up being as bad, or worse, than the disease.

    President Obama's proposed American Jobs Act contains $293 billion in funding over 10 years to finance fixing the SGR formula, which results in annual requirements for reimbursement reductions that are almost routinely overruled by Congress.

    However, to help cover that cost, the president would increase the power of the Independent Payment Advisory Board (IPAB), created by the new health care reform law to recommend Medicare spending reductions that are expected to include payment cuts. Meanwhile, the physician community, including the AUA, continues to seek repeal of the IPAB provision in the law—let alone see it have even more authority.

    While the Obama jobs bill faces strong opposition in Congress, the fact remains that if the SGR is to be reformed, the cost is expected to reach or exceed $300 billion over 10 years—and some way to cover that expense will be necessary.

    MedPAC plan met with opposition

    The Medicare Payment Advisory Commission (MedPAC) has proposed a recommendation to provide for that expense, to which the AUA and other members of the Alliance of Specialty Medicine immediately announced their opposition.

    Under MedPAC's plan, Medicare reimbursements to specialists would be slashed by 5.9% per year for 3 years, followed by a rate freeze for 7 years. The reimbursement rate for primary care physicians would be frozen for the entire 10-year period.

    "This proposal simply devalues the expertise and critical care that specialists provide to Medicare patients and will further restrict access to care for them," declared Alex Valadka, MD, an Austin, TX neurosurgeon and Alliance spokesperson. "The failure of the SGR is not the fault of physicians, and doctors should not be required to pay for its repeal essentially through cuts to ourselves."

    Unless some action is taken, Medicare physicians are due to suffer a 29.5% cut effective Jan. 1, 2012—a doomsday scenario that is helping to move SGR discussions along.

    The American Medical Association issued a statement in mid-September expressing its opposition to the MedPAC plan, saying that while the SGR must be repealed this year, the "drastic cuts" proposed would be disastrous for Medicare patients' access to care and would derail delivery innovations that are critical to lowering health care costs.

    AMA President Peter W. Carmel, MD, pointed out that Medicare payment updates have not kept up with the cost of running a medical practice, leaving a 20% gap between reimbursement rates and practice expenses.

    "The proposal MedPAC is now considering poses a very real risk to compromise physicians' ability to retain staff, care for Medicare patients, and make the investments needed to modernize their practices and participate in new models of care delivery like accountable care organizations," Dr. Carmel warned.

    Meanwhile, the AUA signed an AMA-sponsored letter to the Joint Congressional Committee on Deficit Reduction asking that the SGR be repealed, noting that the committee's deadline for recommendations to Congress on steps to reduce the deficit comes just before the 30% Medicare payment cuts are set to take effect Jan. 1.

    The letter to the committee points out that the current budget baseline assumes that massive physician payment cuts will be implemented, even though Congress has rejected less severe cuts 12 times over the past decade. In effect, the cost of the "doc fix" simply has been ignored when deficit reduction negotiations have been conducted.

    "The fiscally responsible course is clear," the physician groups said in their letter to the committee. "This is the time to repeal the SGR so that new payment models can be adopted that promote high-quality, cost-effective care."

    The AUA, as part of the Alliance, urged the Joint Deficit Reduction Committee in a Sept. 8 letter to eliminate the IPAB, a 15-member board of non-elected officials created by the health care reform law. That letter also urged SGR reform.

    "These un-elected individuals will have the authority to make significant changes to Medicare," the Alliance said.

    "We contend that access to specialty care will be severely limited due, in part, to the additional payment cuts the IPAB will impose on physicians, particularly since the IPAB's authority to recommend payment cuts do not extend to other providers, such as hospitals, until 2020."

    The Alliance noted that Medicare reimbursement rates are already well below market rates and are likely to get worse if Congress fails to reform the SGR. However, if targeted spending rates are surpassed, the IPAB could decide to make additional cuts, further pressuring increasing numbers of physicians to stop seeing Medicare patients altogether, the Alliance cautioned.

    "Important health care decisions must not be made by individuals with little or no clinical expertise, resources, or the oversight required to protect seniors' access to care," the Alliance said in urging the deficit reduction committee to recommend repeal of the IPAB.

    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.

    Bob Gatty
    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.

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