| Share | | | | “The problem is that the GDP growth is just not a |
| “How many times have we heard this?” asks | | | | great benchmark for the SGR,” says Weinstock. |
| Alan Weinstock an insurance broker at “Once | | | | “The fact is that running a medical practice grows |
| again physicians are facing Medicare payment cuts | | | | at a faster rate.” |
| and unless Congress intervenes before June 1, this | | | | Fixing the SGR Formula so it Works |
| time the gouge could be over 20 percent.” | | | | Naturally the question that is on most people’s lips is |
| According to the American Medical Association (AMA) | | | | why Congress doesn’t fix the SGR permanently. |
| physicians have faced cuts nine times in seven years. | | | | Most agree that a 21 percent cut in physician payment |
| And even though Congress stepped in, much of what | | | | is truly excessive and would threaten access to |
| they did was funded in ways that merely put the cuts | | | | medical care for most seniors. However, the experts |
| off to a future date instead of correcting the problem. | | | | estimate that a permanent fix could run as much as |
| The end result is that Medicare payments to | | | | $245 billion. |
| physicians today are only about one percent higher | | | | Last November, the House passed the Medicare |
| than they were in 2001. So once again it is up to | | | | Physician Payment Reform Act that fixes |
| lawmakers to step in and stop a potential 21.2 percent | | | | Medicare’s SGR formula and eliminates the |
| cut. | | | | accumulated deficit. It replaces the current SGR |
| How the SGR Formula Works – in Theory | | | | formula for 2010 with one that is linked to the Medicare |
| The purpose of the Sustainable Growth Rate (SGR) is | | | | Economic Index. |
| to act as a cost-control measure on physician | | | | The Medicare Economic Index is the gauge of inflation |
| services provided under Medicare. It is based on the | | | | in physician-practice costs. However, in 2011 the SGR |
| growth rate of the gross domestic product (GDP). If | | | | will return to being based on the GDP. Only now it will |
| expenditures exceed the GDP, Medicare then | | | | be split into two service targets -- GDP plus two |
| attempts to recoup this money by cutting physician | | | | percent for primary care and preventive services and |
| reimbursement. | | | | GDP plus one percent for all other services. |
| The problem is that while the SGR traditionally | | | | And just this month House leaders discussed a |
| generates cuts and has done so since 2002, | | | | five-year "fix" (California Healthline) which reportedly |
| Congress has had to step in and halt them because of | | | | would increase physicians' Medicare reimbursements |
| the number of physicians who threaten to stop seeing | | | | by 1% to 2% over the next several years, before a |
| Medicare patients if their reimbursement amounts | | | | 37% cut to the payments in 2015. |
| decrease. The end result is that the difference | | | | “The fact is that there needs to be permanent |
| between targeted and actual spending on these | | | | reform of this outdated system,” comments |
| Medicare services continues to accumulate. So every | | | | Weinstock. “Continually placing doctors and seniors |
| year that the pay cuts are postponed, they become | | | | in this tenuous situation is not healthy for anyone. |
| larger and larger. | | | | |