MedPAC Considers SGR "Fix" that Would Penalize Specialists

September 16, 2011

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On September 15, the Medicare Payment Advisory Committee (MedPAC), a congressional advisory committee, met to discuss potential recommendations on how to repeal the Medicare sustainable growth rate (SGR) formula, which if not addressed will cut physician pay by 30 percent on January 1, 2012. Though there has long been consensus on Capitol Hill about the need to permanently repeal the broken SGR formula, the high cost to do so, over $300 billion, has prevented definitive action. Unfortunately, the MedPAC proposal includes passing off these costs to physicians, hospitals, and other providers in Medicare to end the SGR and giving physicians predictable ten-year updates.

The proposal would freeze updates to primary care physicians performing primary care services, while updates to specialists or non-primary care physicians would be cut 5.9 percent for three years and then frozen for seven years.

MedPAC also commented that the secretary of Health and Human Services lacked current objective data to determine work and practice expense relative value units (RVU). MedPAC did note that overpriced services should be properly valued in a budget neutral manner that would redistribute funds to undervalued services. This process could be accelerated by requiring the secretary to re-evaluate at least 1 percent of total physician fee schedule spending per year for several years.

MedPAC members agreed that the SGR should be repealed. More of the members indicated a positive impression of the proposal than a negative one. Those who voiced opposition noted concern over the use of statistics showing that patients had more problems finding a primary care physician than a specialist. The statistical bias may occur because specialists are more likely to accept new patients due to higher patient turnover. Primary care physicians have lower patient turnover rates because of the long-term nature of primary care. Because of the turnover differential, it is not surprising that patients would report more difficulty finding a primary care physician than a specialist. It also was noted that cuts to physicians should be equal unless better data could be found to prove that access to primary care faced a greater threat than access to specialists. Others felt that unity was needed and physicians should not be pitted against each other. Finally, regular monitoring would be needed to account for any unintended consequences if this approach were adopted.

MedPAC staff presented these proposals as a starting point for discussion. No recommendation has been finalized, but MedPAC may attempt to do that at its October meeting. The AAN has been following this issue and will continue discussions with MedPAC staff.

The AAN is actively monitoring this situation and will continue to voice strong concerns against any proposal that groups all specialists together. The Academy's top advocacy priority is to improve reimbursement for cognitive care services and to minimize the payment gap between procedural and non-procedural care. The AAN views access to specialists with expertise to treat neurologic diseases—many of which are chronic—as key to any payment reform proposal.