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  • 1. Beyond the SGR – Family Medicine’s Asks Kevin J. BurkeAAFP Director of Government Relations May 14, 2012
  • 2. Medicare Physician Payment Reform— Beyond the SGR Family Medicine’s Asks:1) Repeal the Medicare Sustainable Growth Rate (SGR) formula [w/ unused war fighting (OCO) funds as the offset]2) Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians3) Use the transition period to determine effective health delivery alternatives
  • 3. Ask #1: Repeal the Medicare Sustainable Growth Rate (SGR) formula [w/ unused war fighting (OCO) funds as the offset]• If Congress fails to act, the SGR formula reverts to previous payment level: o MPFS decrease of 30.9% Jan. 1, 2013 o Budget “sequestration” cuts an additional 2% o Annual cuts > 5-7% thereafter
  • 4. Ask #1: Repeal the Medicare Sustainable Growth Rate (SGR) formula [w/ unused war fighting (OCO) funds as the offset] • Congress has renewed the waiver of the SGR annually (and sometimes monthly) for some 10 years. • Investment in the practice is untenable when only short-term funding is available.
  • 5. Ask #1: Repeal the Medicare Sustainable Growth Rate (SGR) formula [w/ unused war fighting (OCO) funds as the offset]• Problem made worse (more costly) by delay• With withdrawal from mid-east conflicts, OCO funds budgeted for those conflicts won’t be available.
  • 6. Ask #1 – Repeal the Medicare SGR formula [w/ unused war fighting (OCO) funds as the offset]Pushback: Repeal is too costly (~$300B/10 yrs)Response:• It will only get more expensive• Physicians are now paid at 2001 rates• MedPAC reports Medicare patients are finding some difficulty in scheduling p.c. physician• Restraining health care costs means more primary care – can’t get that with SGR
  • 7. Ask #1 – Repeal the Medicare SGR formula [w/ unused war fighting (OCO) funds as the offset]Pushback: The OCO funds should be used to offset pending defense cuts.Response:• Previously, OCO funds were in the range of $900 billion.• This should be enough to offset SGR repeal with funds left for other purposes.• But OCO funds decrease as time goes on.
  • 8. Ask #2: Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians.Pushback: What replaces SGR if it is repealed?Response:• Gradual, predictable shift to a payment that recognizes the value of primary care.• Several years of statutorily defined payment rates pegged to the current rate.• Include higher rate for primary care physicians who are providing primary care services.
  • 9. Ask #2: Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians.Pushback: Why pay more for primary care?Response:• Evidence is clear that primary care is essential to restraining costs and improving health.• 100% disparity in payment between p.c. and specialists• FFS undervalues p.c. and overvalues procedures.
  • 10. Ask #2: Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians.Pushback: Didn’t ACA increase payments for primary care – why pay more?Response:• Primary Care Incentive Payment: 10% for some Medicare services only until end of 2015.• Medicaid parity with Medicare for some p.c. services in some states for only 2013-2014.
  • 11. Ask #2: Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians.Pushback: Didn’t ACA increase payments for primary care – why pay more? (cont.)Response:• These do not offset 20 years of undervaluing of services• Non-public payers use Medicare payment rates.• Commonwealth Fund study
  • 12. Ask #3: Use the transition period to determine effective health delivery alternatives• The ACA created the CMS Office of Innovation to test alternative payment models that improve health and reduce payment.• Advanced Payment ACO’s were created to provide up front payments for small and medium practices.• Comprehensive Primary Care Initiative is a multi-payor pilot similar to the PCMH.
  • 13. Ask #3: Use the transition period to determine effective health delivery alternatives.Pushback: Should feds determine what’s acceptable model?Response:• CMS’s Innovation Center should validate data on delivery models that restrain costs and improve care.• Otherwise, there is no effective restraint on the type of models that would be in place.
  • 14. Ask #3: Use the transition period to determine effective health delivery alternatives.Pushback: We know what works, why wait?Response:• Transformation of practices require investment and training.• Specifics of the effective models need to be sorted out.
  • 15. Medicare Physician Payment Reform— Beyond the SGR Family Medicine’s Asks:1) Repeal the Medicare SGR formula [w/ unused war fighting (OCO) funds as the offset]2) Specify payment rates for a transition period (~5 yrs.) with a higher rate (≥2%) for primary care physicians3) Use the transition period to determine effective health delivery alternatives
  • 16. • Please complete the evaluation forms.• Leave the completed forms on the table.• Breakout sessions begin at 3:00 p.m. – Media training – Graham Center studies – Comparative research – Medicaid changes.