Health Affairs: MedPAC's SGR Fix Commits "Regrettable" Policy Errors

When the Medicare Payment Advisory Commission made recommendations in October on how Congress should fix the sustainable growth rate formula, it made two "regrettable" policy errors, according to a Health Affairs article written by Jeff Goldsmith, an associate professor of public health sciences at the University of Virginia and president of Health Futures.

MedPAC recommended that the $300 billion SGR fix be spread across the entire healthcare sector, with $100 billion to be laid on physicians. MedPAC proposed updates that would freeze current payment levels for primary care physicians and would reduce payments for specialists by 5.9 percent for three straight years followed by a freeze.

Mr. Goldsmith argued that MedPAC should not have assumed the freeze on primary care Medicare rates will be adequate to replace the exodus of older primary care physicians. Additionally, he said the 17 percent across-the-board cuts in Medicare fees to specialists will "accelerate the exodus of practitioners from the 24/7 specialties like general surgery and cardiology already under way."

Instead, Mr. Goldsmith recommended five reforms that could help resolve the SGR problem:

•    Clean up the "conflicts of interest" in high technology diagnosis and therapy.
•    Disallow drug companies and device manufacturers to pay physicians.
•    Enact malpractice reform.
•    Enable organized medical practice, through independent practice associations or physician-sponsored health plans, to play a bigger role in managing healthcare costs.
•    Focus on improving care coordination for the sickest 5 percent of Medicare beneficiaries.

Related Articles on the Sustainable Growth Rate:

CMS Releases Physician Fee Schedule, Includes 27.4% Cut to Physician Payments

MedPAC Approves Final SGR Repeal, Physician Payment Fix

AHA, AMA Urge MedPAC to Consider Other Issues With SGR

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