{"id":4706,"date":"2013-01-31T17:48:49","date_gmt":"2013-01-31T22:48:49","guid":{"rendered":"http:\/\/www.poweryourpractice.com\/?p=4706"},"modified":"2013-01-31T17:48:49","modified_gmt":"2013-01-31T22:48:49","slug":"dissecting-the-medicare-sgr","status":"publish","type":"post","link":"https:\/\/carecloud.com\/continuum\/dissecting-the-medicare-sgr\/","title":{"rendered":"Time for a Change: Dissecting the Medicare Sustainable Growth Rate"},"content":{"rendered":"

If you\u2019ve practiced medicine in the past 16 years, chances are you\u2019ve heard of the Medicare Sustainable Growth Rate (SGR). In essence, it was meant to cap Medicare spending but ultimately had quite the opposite effect.<\/p>\n

Now, Congress faces the yearly burden of allocating billions to the botched program to prevent radical cuts to doctor\u2019s Medicare payments. Just last month, Congress had to apply a last minute \u201cdoc fix\u201d<\/a> during the fiscal cliff debacle to prevent a staggering 26.5% reduction.<\/p>\n

We think it\u2019s due time to take a look at the history of the Medicare SGR, what went wrong and how the experts suggest we fix it.<\/p>\n

What is the Medicare SGR?
\n<\/strong>Legislated as part of the Balanced Budget Act of 1997<\/a>, the SGR determines how much Medicare pays for physician services.<\/strong><\/p>\n

Under the SGR, total Medicare spending on medical services is supposed to follow a target path that is contingent on the rates of growth in physicians\u2019 costs, Medicare enrollment, and economic GDP.<\/p>\n

If spending during the year exceeds the pre-determined SGR goal, then the amounts paid to physicians for services are supposed to be reduced the following year to shift total spending back on track.<\/p>\n

Flawed System
\n<\/strong>Originally, Congress expected the SGR to only slightly lower payment rates because, at the time, the volume and complexity of physician services were growing more slowly than expected.<\/p>\n

Due to an increase in said volume and complexity in the early 2000\u2019s, though, the SGR began to produce a 4.8 percent cut in payment rates — way more than anticipated. Since then, the payment cuts have jumped to almost 27%, forcing Congress to intervene.<\/p>\n

In an AMA survey, 60% of responding physicians said they would be forced to limit the number of new Medicare patients if these cuts stay unchecked<\/strong>.<\/p>\n

\u201cUltimately, it is our country\u2019s families and seniors who will pay the price for congressional inaction,\u201d said Glen Stream, MD, chair of the American Academy of Family Physician\u2019s board of directors. \u201cWe need to end the uncertainty that undermines patients\u2019 confidence in Medicare and disrupts physicians\u2019 ability to provide ongoing care.\u201d<\/p>\n

More than half of physicians interviewed in the AMA survey also admitted that if Medicare payments diminish they would put off purchasing new medical equipment or installing new information technology in their practices — stalling advances in Meaningful Use standards<\/a>.<\/p>\n

Because the SGR\u2019s designers significantly misjudged the increase in volume and complexity of services, decreases in physician payments have also become more severe with each passing year. If the SGR isn\u2019t corrected, Medicare payment rates could drop by 40% in 2016.<\/p>\n

Drastic reductions in payments combined with increasing practice costs could make medicine a less attractive career choice for students and force many physicians 55 or older to retire. This would lead to a devastating shortage of doctors in the U.S. over the next decade.<\/p>\n

The Solution
\n<\/strong>The SGR approach is faulty because it attempts to restrain Medicare spending for physicians\u2019 services by limiting payment rates\u00a0without controlling the growth in the volume and complexity of services.<\/p>\n

The Medicare Payment Advisory Commission recommends repealing the SGR formula<\/strong> and including new incentives for individual physicians to control volume growth in the new legislation.<\/p>\n

Several organized medicine groups spent the latter part of 2012 lobbying legislators to permanently repeal the formula. Leaders from the American Medical Association, the American Academy of Family Physicians, the American College of Physicians, the American College of Surgeons and the American Osteopathic Assn. all met with politicians to stress the importance of replacing what doctors consider a severely broken payment system.<\/p>\n

\u201cOur message to Congress is clear. We are ready to work with you to move toward a stable Medicare program that promotes quality innovations for patients, provides a rewarding work environment for physicians, and reduces costs for taxpayers,\u201d said AMA President Ardis Dee Hoven, MD.<\/p>\n

PYP hopes Congress gets the message and begins moving toward a solution. If not, doctors will continue to face unprecedented cuts for their services and be forced to treat less Medicare patients.<\/p>\n

If you\u2019re interested in getting involved, the AMA suggests contacting your local representative and senator<\/a> to petition for a repeal of the Medicare Sustainable Growth Rate.<\/p>\n

What would your practice be forced to do if Medicare payments were cut by more than 25%?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019ve practiced medicine in the past 16 years, chances are you\u2019ve heard of the Medicare Sustainable Growth Rate (SGR). In essence, it was meant to cap Medicare spending but ultimately had quite the opposite effect. Now, Congress faces the yearly burden of allocating billions to the botched program to prevent radical cuts to doctor\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":32788,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth"],"yoast_head":"\nTime for Change: Dissecting Medicare Sustainable Growth Rate<\/title>\n<meta name=\"description\" content=\"It\u2019s due time to take a look at the history of the Medicare SGR, what went wrong, and how the experts suggest we fix it. 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