SGR Cuts Loom After Supercommittee Fails

The AMA praised Rep. Schwartz for her efforts to try to repeal the SGR but stopped short of endorsing the plan, saying that it couldn't sign on to the specific schedule of pay increases and penalties given the workflow changes and investments that would likely be required from physicians.

In the wake of the supercommittee's announcement, physicians' groups called on Congress to act immediately to avert the scheduled 27% Medicare pay cut and to come up with some sort of long-term solution to the annual scrambling to avert SGR-related fee cuts.

"The AMA is deeply concerned that continued instability in the Medicare program, including the looming 27% cut scheduled for Jan. 1, will force many physicians to limit the number of Medicare and TRICARE patients they can care for in their practices," Dr. Peter W. Carmel, president of the AMA, said in a statement . "Congress has ignored the reality that short-term patches have grown the problem immensely. The cost of repealing the formula has grown 525% in the past 5 years and will double again in the next 5 years."

Congressional Action Looming

The U.S. Senate voted on Dec. 17 to put off by 2 months a Medicare physician pay cut due to take effect on Jan. 1. The Senate voted 89-19 to approve the package, just before it left Washington for a holiday recess.

But on Dec. 19, as the House came back into session, many congressmen said they would not support the package, mainly because it only provided 2 months of relief, rather than a year or longer. Similar legislation passed the House Dec. 13, but with a longer horizon: If enacted, that bill would replace the 27% cut with a 1% increase for 2 years.

If the House votes against approving the Senate bill, and the two houses cannot compromise before Jan. 1, physicians will see a 27% reduction in fees, as dictated by the Medicare Sustainable Growth Rate (SGR) formula.

The American Medical Association expressed disgust in a statement issued after the Senate vote.

“Waiting until the last week of the legislative session to address a problem that Congress knew was looming all year is not the way to conduct our nation’s business,” AMA President Peter Carmel said in the statement.

The AMA called on Congress to stop instituting stop-gap fixes and to instead replace the SGR formula. “The 12 temporary patches that Congress has applied have raised the cost of solving the problem by more than 500% over the last few years and eroded patients’ access to care,” said Dr. Carmel. “A permanent solution is the long overdue, fiscally responsible approach.”

Alicia Ault contributed to this report.