Here we go again: Same SGR song, newest verse

AMA Leader Commentary. By William G. Plested III, MD, Oct. 16, 2006.

AMA LEADER COMMENTARY

A few words about current events in medical practice

SEE ARCHIVES

A message to all physicians from AMA President William G. Plested III, MD.

As I write this article, we are in the middle of an all-out effort to work with Congress to avert a 5% across-the-board cut in physician reimbursement scheduled to take effect Jan. 1, 2007.

As you know, this cut is mandated by the sustainable growth rate formula used by the Centers for Medicare & Medicaid Services to determine physician payment levels.

Since we are in active discussions at this time, I obviously don't know what the outcome will be. Hopefully, by the time you read this, we will have an answer. The reason I write anyway is that, whatever the outcome, there are several lessons that are important for all physicians to understand, especially since we have been in this identical position repeatedly over the past several years.

First, a brief word about the SGR itself. The formula is simply a legislative device to prevent marked cost increases in the physician component of the Medicare program. Arguably, that is a reasonable goal. But the rigidity of the formula is such that it does not recognize legitimate causes of cost increases such as those due to increasing numbers of seniors who need increasing amounts of outpatient care.

Clearly, physicians should not face decreased reimbursements because of such realities. Other sectors of our health care delivery system have reimbursements based upon changes in the costs of delivering care. It is only reasonable and fair to expect that physicians be treated in a similar manner. And Medicare Part B premiums will rise 5.6% next year, while doctors' payments are scheduled to decline.

For the past several years, we physicians have faced cuts dictated by the SGR formula on a recurring basis. Year in and year out, we have spent enormous amounts of time, energy and resources on efforts to get rid of the SGR formula and to secure reasonable, cost-of-living type increases in physician payment.