MedPAC Proposal to Repeal SGR Not ‘Worth the Paper It Is Written On’

October 11, 2011
Aubrey Westgate

The proposal would help physicians dodge a 29.5 percent pay to Medicare services, but it would slam them with other - perhaps more serious - problems.

The Medicare Payment Advisory Commission (MedPAC) is officially endorsing a plan to repeal the Sustainable Growth Rate (SGR) system for Medicare reimbursement. But though the proposal would help physicians dodge one bullet (it would avert the 29.5 percent pay to Medicare services scheduled for January 1, 2012), it would slam physicians, patients, and the healthcare system with other - perhaps more serious - problems.

Congress is expected to vote on MedPAC’s proposal later this month. If it does move forward, which managing director of Wagner Healthcare Consulting Richard Wagner says is “a very real possibility,” the proposal could be the straw that breaks the camel’s back when it comes to physicians’ ability to treat Medicare patients without suffering revenue losses.

“As drastic as it may sound and assuming the proposal is followed in its entirety, physicians should at least start to consider the possibility of not participating in the Medicare program,” Wagner told Physicians Practice in an e-mail.

The problem for physicians and patients, he said, is that in order to offset the cost of the SGR repeal (about $200 billion), the MedPAC proposal calls for a decade-long freeze to Medicare reimbursements for primary-care physicians and a 5.9 percent cut to reimbursements followed by seven years of no change for specialists.

“Facing a hard reduction and a long-term freeze, discussions about [Medicare program] defection should become all the more relevant,” Wagner said.

Sue Irwin, president of practice consulting company NCEB - Practice Management Solutions, says if Congress approves the proposal, physicians will not only need to discuss defections, they will need to put those discussions into action.

“To be honest, I believe that all physicians could very well stop treating Medicare patients until they rescind it,” she said via e-mail to Physicians Practice.

Most physicians won’t be able to accept additional revenue losses caused by the freeze and cuts built into the MedPAC proposal, Irwin said, noting that physicians are already hit with higher medical education, staff, and practice operations costs.

“Most people don’t understand the overhead that doctor’s have,” she said.

And though MedPAC is right that the SGR needs to be repealed, its solution to do so is the wrong one, Irwin said.

“I don’t believe the MedPAC proposal is worth the paper it is written on,” she said.

Irwin added that MedPAC’s move is a step toward “working” on revamping Medicare reimbursements, “however I believe it to be an erroneous step.”

Irwin’s and Wagner’s frustrations and concerns are being voiced by physicians and physician groups across the country.

Prior to MedPAC’s official vote on the proposal, more than 40 physician groups sent a letter to the organization outlining their concerns and opposition.

And only a few hours after MedPAC officially endorsed its proposal, AMA President Peter W. Carmel released a statement in opposition.

"The recommendation voted on today by MedPAC flies in the face of their previous recommendations to stop harmful physician cuts that threaten access to care for patients,” Carmel said. “There is already a 20 percent gap between Medicare payment updates and the cost of providing health care to seniors.”

What do you think of the MedPAC proposal? Is it a solution to the long-time issues with the SGR system? If it does pass, how will it affect your practice operations? Share your thoughts below.