Medicolegal Issues

Continued Pressure, Collaboration, Member Action Key to Ending SGR


Faced with a looming 27% cut in Medicare physician payment rates and a one-year timeline to find a solution, 2011 was the year Congress was going to stop the vicious circle of short-term “doc fix” patches and finally put an end to the Sustainable Growth Rate (SGR) formula. A serious solution really did seem possible when the House Energy and Commerce Committee solicited ideas on how to solve the problem.

SHM and other healthcare groups responded, and there seemed to be genuine interest in acting on the various plans that were presented.

What happened?

In reality, 2011 became the year of deficit reduction (if not in actions, at least in words). Every discussion in Congress seemed to come back to the deficit. Hearings were held, countless bills were introduced, blame was cast, and, eventually, the powerful Joint Deficit Deduction Committee, or “supercommittee,” was charged with finding at least $1.5 trillion in savings. At one point, the committee was even urged to “go big” and come up with $4 trillion in savings.

The deficit-reduction-or-bust mentality suddenly made an SGR fix and its $300 billion price tag seem like a pretty hard sell.

Undaunted, groups representing caregivers tried to turn the focus on the deficit into an opportunity and even approached the supercommittee to resolve the SGR matter—an illogical step at first glance, but the reasoning did make long-term sense. The cost of fixing the SGR will only increase with time, and it is estimated that elimination will cost $600 billion in 2016. A timely fix will be cheaper, as delay will only serve to further increase the deficit.

Although an SGR replacement did not happen in 2011 and action in 2012 might turn out to be exceedingly difficult, there are now realistic replacement plans out there.

In an effort to appeal to the deficit committee, SHM worked closely with U.S. Rep. Allyson Schwartz (D-Pa.) to develop and submit a framework for eliminating the SGR and eventually phasing out fee-for-service. Despite these efforts, the deficit committee failed, and lawmakers were left with limited time before the scheduled SGR payment cuts were to take effect on Jan. 1.

As 2011 came to a close, a short-term extension that would last until the end of February was all that Congress could agree to. The SGR cycle began anew.

The positive in all this is that, although an SGR replacement did not happen in 2011 and action in 2012 might turn out to be exceedingly difficult, there are now realistic replacement plans out there. For example, Schwartz is looking to introduce legislation based on her above-mentioned framework, but doing so will need broad support.

Moving forward, it will be imperative for societies like SHM and practitioners like hospitalists to keep pressure on Congress. Individual hospitalists will continue to play an important role by contacting their elected officials. This can be done through personal phone calls and letters, or by responding to SHM’s legislative action alerts. You can even act now by visiting SHM’s legislative action center.

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