Tag Archives: SGR

ACA: Helping or Hurting Solo Practice?

It won’t surprise many to learn that the age of the solo practitioner has, for the most part, come to an end. Over the past several years, small and solo practices have closed, been sold to hospitals, or merged with larger groups. The reasons are fairly obvious. Declining payments, rising malpractice costs, increasing regulatory burdens, costly new health information technology requirements, and crushing medical school debt have made it difficult for physicians to operate the small practices that once were commonplace around the country.

Now add the Affordable Care Act (ACA) to the mix. At a July 19 hearing of the House Small Business Subcommittee on Investigations, Oversight and Regulations, lawmakers questioned whether the health reform law would help or hurt physicians looking to keep their practices small and independent. The answers from the expert panel were mixed.

Gone are the days of Marcus Welby. Courtesy Wikimedia Commons/Public Domain License

The emergence of accountable care organizations (ACOs) will drive more hospitals to buy up small physician practices, Mark Smith, president of the physician recruiting firm Merritt Hawkins, predicted. The health reform law heavily promotes the formation of ACOs, which call for physicians and hospitals to work more closely and to share in bundled payments for episodes of care. Mr. Smith said small practices aren’t well-positioned to enter the ACO world if they aren’t integrated with a hospital because the ACO model calls on practices to assume financial risk.

But Joseph M. Yasso, Jr., DO, a family physician in Independence, Mo., who sold his practice to a hospital group 20 years ago, said the ACA’s promotion of patient-centered medical homes could be a lifeline for small practices. Physicians are adapting to the new environment by becoming medical homes and participating in government pilots where they can share in the savings they generate by providing more efficient care, he said.

One thing everyone on the panel did agree on was the need to fix the Sustainable Growth Rate (SGR) formula used in setting physician payments under Medicare. No surprises there either.

— Mary Ellen Schneider

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Summer Doldrums for the SGR

The question of what to do about Medicare’s Sustainable Growth Rate formula, which governs physician pay, likely got its final serious look on Capitol Hill on July 11–that is, before Congress heads out the door for a protracted summer recess and then gets caught up in the fall campaign season. And it wasn’t much of a look.

Sen. John Kyl takes notes as physicians talk about SGR. Alicia Ault/IMNG Medical Media

The Senate Finance Committee held its third and final “roundtable” discussion on the SGR, this time allowing physicians to weigh in.  Representatives from the American Medical Association, American Academy of Family Physicians, American College of Surgeons, American College of Cardiology, and American Society of Clinical Oncology politely answered questions from committee members who showed up. Most of the Democrats on the committee sat in,  at least for a portion of the almost two-hour meeting, while only two Republicans attended–John Kyl (Ariz.) and John Thune (S.D.), who came for only the last half hour.

The discussion meandered quite a bit and quite often, with physicians talking about the need for aligning incentives, creating medical homes, and rewarding quality. Dr. W. Douglas Weaver, a past president of the ACC and current Vice President and Systems Medical Director of Heart and Vascular Services, Henry Ford Health System in Detroit, said that the instability caused by the ever-fluctuating SGR situation was thwarting efforts to create new delivery systems.

But there was little concrete discussion of what to do to avert the 27% cut mandated by the SGR that will take effect January 1, 2013.

Senator Max Baucus (D-Mont.), who chairs the Finance Committee and led the

Sen. Max Baucus and Sen. Orrin Hatch listen to physicians. Alicia Ault/IMNG Medical Media

roundtable, at one point said that while he was hearing great ideas, he wanted to know what action could be taken quickly.  Senator Kyl also tried to steer the discussion back to the practical. He also reminded physicians that Congress is driven by 10-year budget-setting imperatives; thus, any suggestions for the SGR proposed for the short term must also work over the long haul, he said.

The elephant in the room: how to pay for an SGR fix or replacement, now clocking in at about $300 billion and rising. Physicians have steered clear of suggesting any financial solutions.

The committee broke with no promises. In an interview afterwards, Dr. Glen Stream, AAFP president, said that any SGR tinkering would likely be put off until at least after the November election. That puts the onus on a lame duck Congress.

Do you think they will make a short term fix or come up with some kind of permanent solution?

Alicia Ault (@aliciaault on twitter)

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House: System Reforms Second to SGR Repeal

Delivery system reforms come second to repealing the Sustainable Growth Rate formula. That’s according to congressional testimony by private sector payers at a recent hearing of the House Ways and Means Committee.  While each of the panelists presented compelling ideas for delivery system reform, all agreed that the first step to progress is a new payment model.

“The extent to which Medicare can more more swiftly to payment reforms, I think we’d see progress there,” said panelist Dr. Jack Lewin, the chief executive officer of the American College of Cardiology.

Rep. Mike Thompson (D-Calif.) said SGR repeal, not delivery reform, is the number one concern of both doctors and Medicare beneficiaries.

Alicia Ault/Elsevier Global Medical News

“[Doctors] want to make sure that they’re going to get paid for the medical services they provide and Medicare patients want to make sure they’re going to have a doctor to go to; and it stops right about there,” he said. His concerns were echoed by Ranking Member Pete Stark (D-Calif.).

“We keep avoiding the topic of Sustainable Growth Rate formula, in favor of the easier conversations about delivery system reforms, around which we have much stronger agreement,” Rep. Stark said.

Dr. John Bender, president and CEO of Miramont Family Medicine of Fort Collins, Colo., testified that if SGR is not repealed, doctors could have a harder time keeping their practices afloat. He added that he was forced to take out $70,000 loan to cover payroll 4 years ago when SGR was not repealed and Medicare payments were delayed. Today, with stricter policies on loans, that might not be an option, Dr. Bender said, and his practice could go bankrupt.

Len Nichols, director for health policy research and ethics at George Mason University, testified that the Affordable Care Act has brought an end to “business as usual.” He said that Medicare and private payers must work together to find savings, or else face steep cuts.

“We could cut our way to fiscal balance, and in so doing, reduce access to care for millions of Americans. I fear this pathway would likely fail,” Nichols said. “Alternatively, we could align incentives so thoroughly that we actually link the self-interest of clinicians with our common interest in cost reduction and quality improvement, which covering all Americans.”

Rep. Thompson called on his fellow lawmakers to put partisan differences aside to solve the problem that Congress created.

“We have dropped the ball on this one … We need to come together as members of Congress, party stripe not withstanding, and figure out how we come up with the dollars to fix this,” he said.

—Frances Correa (@FMCReporting on Twitter)

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Pushing the Supercommittee: The Policy & Practice Podcast

The AMA launched a multi-million dollar ad campaign to push for an SGR fix now. Courtesy AMA

As the Joint Select Committee on Deficit Reduction, or the Supercommittee, works behind closed doors to find more than a trillion dollars in debt reductions, the American Medical Association is pulling out all the stops to get a permanent fix to the Sustainable Growth Rate Formula on the agenda. Whether the committee chooses to address the SGR issue, they have until Nov. 23 to get their recommendations out.

Meanwhile, the Obama administration has awarded nearly $300 million in scholarships and loan repayment to physicians willing to spend two to four years working in rural communities. The initiative is aimed at boosting the physician workforce shortage in under-served areas.

For more on that, take a listen this week’s Policy & Practice Podcast.


Stop in next week to hear more about the legal wranglings of the Affordable Care Act and physician pay concerns.

– Frances Correa (@FMCReporting)

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Fighting Over the SGR: The Policy & Practice Podcast

The Medicare Payment Advisory Commission (MedPAC) is recommending that Congress throw out the Sustainable Growth Rate (SGR) formula currently used in setting Medicare physician payments. Under that formula, physicians are due to have their Medicare payments cut by about 30% on Jan. 1. But while doctors are unanimous in their loathing of the SGR, there are differing opinions about how to solve the problems with how Medicare pays physicians.

Courtesy Wikimedia Commons/Psychonaught/Creative Commons License

Check out the Policy & Practice podcast to hear how MedPAC wants to pay for its SGR fix and what objections physician groups are raising about the plan. This week’s podcast also features news on the Institute of Medicine’s recommendations on what should be included in an essential package of health insurance benefits for health plans operating in the state health insurance exchanges in 2014.

Take a listen:


Join us next week as we follow the deliberations of the Joint Select Committee on Deficit Reduction and what it means for Medicare and other health programs.

— Mary Ellen Schneider  (@MaryEllenNY)

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President Talks Medicare Cuts: The Policy & Practice Podcast

Courtesy The White House

President Obama released his plan to cut the deficit and Medicare is being asked to help pay the piper. His plan also gives additional power to the unpopular Independent Payment Advisory Board,  an appointed body that will be charged with cutting Medicare spending.

In other Medicare news, the Medicare Payment Advisory Commission gave more details on its plan to replace the Sustainable Growth Rate formula. Radiologists and the American College of Physicians came out against the plan, which freezes payments to primary care for the next decade.

For more on that and details about yet another court hearing on the Affordable Care Act, listen to this week’s Policy & Practice Podcast.


Stay tuned next week for updates on potential Supreme Court action on the health law and more.

—Frances Correa (@FMCReporting on Twitter)

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For Doctors, It’s the SGR: The Policy & Practice Podcast

The Super Committee — officially known as the Joint Select Committee on Deficit Reduction — sat down together officially for the first time last week. With their tight deadline and daunting task, some experts are expressing concern that Super Committee efforts will address the Sustainable Growth Rate formula.

In other SGR news, MedPAC commissioners heard one proposal on how to fix the SGR. While the proposal would lop $100 billion off the price tag for a fix, doctors of many stripes were not pleased with how the savings would be accomplished.

Courtesy Flickr/DonkeyHotey/Creative Commons

Also, a new report from the Census Bureau showed that nearly 100 million more  Americans were uninsured in 2010. However, 18- to 24-year-olds gained coverage. Census officials say that could be because of  provisions in the new health law that keep young people insured through age 26.

For more details, listen to this week’s Policy & Practice Podcast.


Stay tuned next week for an update on Super Committee talks and a debate on what constitutes a “grandfathered” health plan.

—Frances Correa (@FMCReporting)

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Here Comes the Super Committee: The Policy & Practice Podcast

photo courtesy of iStock

The names are in and the lobbying has begun. Physicians — and others — are weighing in with their priorities for the Joint Select Committee on Deficit Reduction — better known as the Super Committee. The group is charged with cutting $1.5 trillion of federal spending by Thanksgiving.

At the top of most doctors’ list: A permanent fix to the Sustainable Growth Rate (SGR) formula, which could lead to a 30% pay cut on Jan. 1. But physicians from several specialties have other concerns they want addressed as well.

Meanwhile, a federal appeals court in Atlanta ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional, pushing the law one step close to its much-predicted airing in front of the Supreme Court.

Regardless of legal wranglings, the feds are busy pushing ACA programs along, with announcements of more than $200 million worth of programs last week.

LISTEN:  For details, check out this week’s Policy & Practice Podcast. Let us know what you think.


—Frances Correa (@FMCReporting on Twitter)

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Docs Brace for Cuts: The Policy & Practice Podcast

image courtesy of iStock

The ink may be dry on the debt ceiling and deficit reduction agreement, but there are still plenty of questions about what it will mean for doctors. The plan to cut trillions in federal spending did not address the Sustainable Growth Rate formula (SGR), the loathed payment formula used to set Medicare physician fees. On Jan. 1, 2012, physician payments are slated to be cut by 30% because of the SGR. Some physicians say that without congressional action to avert the scheduled cut, access to health care could be in jeopardy.

Meanwhile, the debt agreement set up a bipartisan committee that will recommend additional spending cuts. This committee could take aim at Medicare, Medicaid, and the Affordable Care Act.

In other bad news for physicians, a new study in the journal Health Affairs shows that American doctors spend nearly $83,000 per year to deal with health plans and paperwork. That’s four times what their counterparts in Canada spend. For details on this and more, check out the Aug. 8 edition of the Policy & Practice Podcast.

Take a listen and share your thoughts.


The Policy & Practice team will be taking a short summer break, but check back on Aug. 22 for all the latest news on health reform and what it means for you.

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Filed under Family Medicine, Health Policy, health reform, Hospice and Palliative Care, IMNG, Internal Medicine News, Obstetrics and Gynecology, Physician Reimbursement, Podcast, Practice Trends, Primary care, Uncategorized

Lawmakers Agree on Debt Plan: The Policy & Practice Podcast

After weeks of contentious debate, lawmakers have finally reached an agreement to raise the nation’s borrowing limit. The plan includes cuts to lower the deficit by about $1 trillion over 10 years and creation of a committee to determine future cuts. The plan did not address the Sustainable Growth Rate formula and the committee could potentially reduce physician pay under Medicare and Medicaid. Congress is expected to vote on the plan today or tomorrow.

Photo courtesy of iStock

While the details of further cuts remains unclear, federal economists released their predictions on the growth of U.S. health care spending. Not surprisingly, health spending growth was low last year, due to the impact of the recession. And even in 2014, when many Affordable Care Act provisions kick in, the rate of spending growth is predicted to be just 2%  over the average annual growth rate for the rest of the decade.

In related news, a repeal to the unpopular Independent Payment Advisory board has gained bipartisan support. For details on that and more, listen to this week’s Policy & Practice podcast.


Check back next week for more on the fallout from the debt agreement and health reform implementation.

—Frances Correa (@FMCReporting on Twitter)

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