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AAMC Joins Physician Groups on SGR Reform Letter

October 19, 2012—The AAMC joined over 100 other physician groups—including the American Medical Association (AMA)—in a Oct. 15 letter  to members of Congress urging them to repeal the Medicare sustainable growth rate (SGR) formula and laying out “principles and core elements that can form the basis for new federal policy on a transition from the SGR to a higher performing Medicare program.”

With the possibility of a 27 percent cut on Jan. 1, 2013, should Congress fail to act, the letter states, “Physicians facing the constant specter of severe cuts under the SGR cannot invest their time, energy, and resources in care re-design.  The first step in moving to a higher performing Medicare program must be the elimination of the SGR formula.”

The letter adds, “Although the SGR must be eliminated, the physician community recognizes that this is only one-half of the equation…. New payment models are needed that can offer physicians opportunities and allow them to lead changes in care delivery while being rewarded for improving the quality of patient care and lowering the rate of growth in costs.”

The letter says that the transition plan must include core elements that:

  • Reflect the diversity of physician practices and provide opportunities for physicians to choose payment models that work for their patients, practice, specialty, and region;
  • Encourage incremental changes with positive incentives and rewards during a defined timetable, instead of using penalties to order abrupt changes in care delivery; and
  • Provide a way to measure progress and show policymakers that physicians are taking accountability for quality and costs.

The letter also offers a basic structure for a new program that would:

  • Reward physicians for savings achieved across the health care spectrum;
  • Enhance prospects for physicians adopting new models to achieve positive updates;
  • Tie incentives to physicians’ own actions, not the actions of others or factors beyond their influence;
  • Enhance prospects to harmonize measures and alter incentives in current law;
  • Encourage systems of care, regional collaborative efforts, primary care and specialist cooperation while preserving patient choice;
  • Allow specialty and state society initiatives to be credited as delivery improvements (deeming authority) and recognize the central role of the profession in determining and measuring quality; and
  • Provide exemptions and alternative pathways for physicians in practice situations in which making or recovering the investments that may be needed to improve care delivery would constitute a hardship.

The letter also emphasizes that a transition period is necessary for physicians to prepare for new delivery reforms. The letter said, “[T]hese physician-led, patient-centered models must be developed and implemented during a defined and robust transition period that can fill in the gap between elimination of the SGR formula and implementation of a new system nationwide.”


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


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