AMA Wire

Wednesday, April 17, 2013

This Week's News

President, House of Representatives both planning for SGR repeal

President, House of Representatives both planning for SGR repeal

With the release of the president's 2014 budget last week, both sides of the political arena have underscored their commitment to eliminating Medicare's sustainable growth rate (SGR) formula in favor of moving toward a new payment system.

The president's budget builds in the cost of repealing the SGR formula and calls for "the continued development of scalable accountable payment models" to promote affordable quality care.

"We are pleased that President Obama's 2014 budget recognizes the need to eliminate the broken Medicare physician payment formula known as the SGR and move toward new ways of delivering and paying for care that reward quality and reduce costs," AMA President Jeremy A. Lazarus, MD, said in a statement. "The president's proposals align with many of the principles developed by the AMA and 110 other physician organizations on transitioning Medicare to include an array of accountable payment models."

In October, the AMA and more than 100 other medical associations submitted driving principles and core elements for a high-performing Medicare system to Congress. The principles call for repeal of the SGR formula and outline how the system can adopt new models of care delivery and payment that reward high-quality care and cost-savings.

At the same time the president was preparing his budget proposal, two influential committees in the U.S. House of Representatives were soliciting physician input on a draft framework for eliminating the SGR formula.

The AMA on Tuesday sent formal comments to the U.S. House Energy and Commerce Committee and the Ways and Means Committee on its latest draft, urging the lawmakers to ensure the transition to a new Medicare payment system supports physicians in their practices while implementing practical means to boost quality. The committees announced in February that they plan to bring the bill before the full House this summer.

Although pleased with this progress toward repeal of the SGR formula, the AMA also raised concerns about several problematic proposals unveiled in the president's budget last week.

"While eliminating the SGR would be a step forward, the budget takes a step backward by aiming to achieve more savings through the Medicare Independent Payment Advisory Board (IPAB), which would set another arbitrary spending target and rely solely on payment cuts to reach it," Dr. Lazarus said. "The AMA strongly supports bipartisan proposals to eliminate this panel."

Dr. Lazarus also pointed to proposed cuts to graduate medical education (GME) funding. "As the nation deals with a physician shortage, it is important that all medical students can complete their training and care for patients," he said.

The AMA has been urging Congress through its Save GME campaign to preserve funding for medical residencies so the nation has an adequate physician workforce to meet its health care needs.

While the president's budget does not represent a change in law and is not expected to be introduced as legislation, it does provide options for Congress to consider as it develops legislation to address the nation's fiscal issues this year. The proposal also offers insight into the Obama administration's budget priorities, which could play a role in the debate about government spending.