Medical Societies Outline Sustainable Growth Rate Replacement Proposal

The American Medical Association and more than 100 state and specialty medical societies on Monday outlined a set of strategies to eliminate the sustainable growth rate formula and transition to a "higher performing Medicare program," Modern Healthcare reports.

In a letter to Senate Finance Committee Chair Max Baucus (D-Mont.), Committee ranking member Orrin Hatch (R-Utah) and the chairs and ranking members of the House Ways and Means and Energy and Commerce committees, the groups wrote the SGR -- the formula by which physician payments are set under Medicare -- "is an enormous impediment to successful health care delivery and payment reforms that can improve the quality of patient care while lowering growth in costs."

The groups laid out a Medicare reform plan in which physicians could choose their own payment models and demonstrate that they are accountable for cost and quality issues without resorting to payment penalties (Lee, Modern Healthcare, 10/15).

Details of the Letter

The letter comes as providers face a 27% payment cut scheduled to take effect on Jan. 1.
Average payments under the SGR have been stagnant for more than 10 years, according to the letter, which notes that physicians "facing the constant specter of severe cuts under the SGR cannot invest their time, energy and resources in care redesign" (AMA letter, 10/15).

The groups identified three driving principles of a high-performing Medicare plan:

• Successful delivery reform;
• Investments in and support of physician infrastructure for delivery and payment reform; and
• Medicare payment updates that reflect the cost of providing services, efforts to improve quality and cost management (Oh, Becker's Hospital Review, 10/15).

The letter adds that "physician-led, patient-centered models" require a defined and substantial transition period for development and implementation (AMA letter, 10/15).