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AMA President Testifies Before Congress, Urges Medicare Physician Payment Reforms

Recommends three-pronged approach to reform the physician payment system

For immediate release:
May 5, 2011

WASHINGTON - Today, American Medical Association (AMA) President Cecil B. Wilson, M.D., testified before the House Energy and Commerce Health Subcommittee, urging Congressional leaders to reform the deeply flawed Medicare physician payment formula, also known as the Sustainable Growth Rate (SGR). This formula will trigger a drastic cut of nearly 30 percent on January 1.

“The SGR is a failed formula,” said Dr. Wilson. “The longer we wait to cast it aside, the deeper the hole we dig. It is past time to replace the SGR with a policy that preserves access, promotes quality and increases efficiency.”

In his testimony, Dr. Wilson recommended a three-pronged approach to reforming the physician payment system. This approach includes repealing the SGR, implementing a five-year period of stable Medicare physician payments, and laying the pathway for a new payment system.

During the five-year period, a variety of new payment models designed to enhance care coordination, quality, appropriateness and costs would be tested. This period would also provide time to carry out demonstration and pilot projects that would form the basis for a new Medicare physician payment system. Because fiscal stability is imperative, the AMA recommends positive payment updates that keep pace with growth in medical practice costs over this period.

“A replacement for the SGR should not be another one-size-fits-all formula,” said Dr. Wilson. “A new system should allow physicians to choose from a menu of new payment models that rewards physicians and hospitals for keeping patients healthy and managing chronic conditions.”

To assist with the process of testing and evaluating payment models, the AMA is working with specialty and state medical societies to form a new Physician Payment Reform and Delivery Leadership Group. This group will include physicians who are currently participating in payment and delivery innovations and other experts. By sharing expertise and resources, physicians can assess the models that will improve patient care, learn how to get programs off the ground, address challenges and determine the impact of these reforms on patient care and practice economics.

Read Dr. Wilson’s full testimony.


Brenda Craine
Director, AMA Media Relations

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