Medicare Payment Advisory Commission (MedPAC) approves SGR repeal proposal

The Medicare Payment Advisory Commission (MedPAC) voted Thursday to approve the sustainable growth rate (SGR) proposal it issued last month. Medical groups are already expressing their displeasure.

MedPAC’s approved recommendation repeals the SGR for an estimated cost of $200 billion. To cover that cost MedPAC suggests a 10-year Medicare payment rate freeze for primary care physicians and cuts to payments for specialists by 5.9 percent each year for three years followed by a seven-year payment freeze. Some of the other offsets come from durable medical equipment, hospitals and Medicare benefits to seniors.

Prior to MedPAC’s Thursday vote, a slew of medical organizations, including the American Medical Association (AMA), the American College of Cardiology, the American College of Emergency Physicians, the American College of Physicians, the American College of Surgeons and the American Psychiatric Association, sent the commission a letter urging a revision of the commission’s September proposal.

“We share your concern that the SGR is undermining patient and physician confidence in the Medicare program and appreciate the Commission’s effort to present a comprehensive plan intended to improve the prospects for SGR repeal,” read the letter dated Oct. 3. “Unfortunately, however, we cannot support this plan in its present form because it retains many of the SGR’s flaws, undermines physicians’ ability to participate in payment and delivery reforms and calls for payment rates that the Commission itself has previously said could reduce Medicare beneficiaries’ access to medical care.”

As news of MedPAC’s vote in favor of its proposal got out, medical groups began announcing their displeasure.

“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,” said Peter Carmel, MD, president of the AMA in a statement. “There is already a 20 percent gap between Medicare payment updates and the cost of providing healthcare to seniors. Many physicians may also face upcoming payment penalties related to electronic prescribing, health information technology and quality reporting programs. Adding additional physician payment cuts to this mix will leave many physicians unable to care for Medicare patients or make the investments needed to participate in new models of care that can increase coordination and reduce costs.”

“The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship,” said Jack Lewin, MD, CEO of the American College of Cardiology in a statement. “Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes.”

Offering a less strident perspective, the National Coalition on Health Care (NCHC) said in a statement that while some of MedPAC’s offsets may shift more costs onto providers, businesses, health plans and beneficiaries, the proposal is essentially a good thing.

“MedPAC has produced an honest attempt to cut the Gordian knot of federal health policy and end the SGR. Whether or not MedPAC’s shared sacrifice approach is the right one, at least MedPAC has gotten serious about addressing provider payment. It is long past time that our elected leaders do the same,” said NCHC President and CEO John Rother in his statement.

“If we’re ever going to rein in the health costs strangling our nation’s consumers, businesses and public institutions, we must redesign provider payment to encourage the highest-value care for patients. MedPAC’s proposal should spur the Congress and the Administration to get to work,” he concluded.