Medicare Physician Compensation

AMA wants more money for docs

File under “least shocking development of the day”: The American Medical Association opposes cuts to physician salaries. In a letter on Monday, the AMA stated that it expreses:

…strong support for the “SGR Repeal and Medicare Provider Payment Modernization Act of 2014” (H.R. 4015/S.
2000)…Previous Congresses have spent more than $150 billion over the past 12 years to preserve access to care for Medicare beneficiaries by forestalling SGR mandated cuts. However, during that time, few steps have been taken to modernize the Medicare physician payment system to increase quality and value…by ending the cycle of temporary patches to a flawed system, this proposal represents not only critical payment and delivery reform, but prudent fiscal policy as well…The time for its repeal is now.

Despite its obviously self-interested letter, the AMA has a point. As I have written before, the SGR aimed to reduce Medicare spending by slowly decreasing physician reimbursement rates. However, Congress has repealed the SGR every year since 1998. Thus, at the end of each year, doctors are at limbo; legally, they face a cut in Medicare reimbursement of 20-30 percent, but in practice they know Congress is likely to reverse these cuts.

Last week, Congress outlined a bill that would repeal the SGR. As WonkBlog reports:

The plan — which you can read in full here — would repeal the sustainable growth rate, the formula that Congress has used since the mid-1990s to set Medicare rates…What Congress wants to do differently this time around is, by 2021, put as much as nine percent of doctors’ reimbursements at stake if providers can’t hit certain quality standards. It would also include a bonus pool of $500 million for the doctors who do provide really great care.  The idea is to use metrics, such as whether they’re adopting electronic medical records and hitting certain medical quality targets, to adjust upward or downward what doctors’ earn. That’s quite different from the current, largely fee-for-service system, where doctors get a flat fee regardless of whether their patients get any better.

Political momentum may just be heading towards the sensible path or repealing the SGR.

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