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AAMC Submits Comments on House Committees’ SGR Replacement Proposal

March 1, 2013—The AAMC submitted a Feb. 25 comment letter  to the House Ways and Means and Energy and Commerce Committees in response to their request for feedback on a Republican sustainable growth rate (SGR) repeal-and-replace proposal. The Republican plan  proposes a three-phase approach that would repeal the Medicare SGR formula and provide for a period of predictable payment rates; reform the Medicare fee-for-service (FFS) payment system to better reflect quality; and further reform Medicare FFS to account for efficiency.  The AAMC letter focuses on three key aspects of the proposal: changes to reimbursement, appropriate quality measures and adequate risk adjustment, and reducing administrative burden on providers.    

The letter points out that the AAMC supports Medicare physician payment reform, and fixing the SGR is crucial to ensure beneficiary access.  The letter also addresses the looming physician shortage stating, “[O]ne critical component that often is overlooked in the payment discussion is the need to ensure there are enough physicians to meet the needs of the growing number of Medicare beneficiaries,” and “it is critical that the 113th Congress address the need to increase Medicare support for Graduate Medical Education (GME).” 

In response to the Republican SGR proposals’ principle that “reform must not increase the deficit,” the AAMC expressed concern that “Congress will look exclusively to the Medicare program to find the required savings.  This approach would have an adverse effect on beneficiaries and on the teaching hospitals and teaching physicians that provide care to them.  Using cuts in Medicare support for teaching hospital missions to address physician reimbursement inequities are counterproductive and shortsighted, damaging institutions that are critical components of our health care system.” Further, the letter states “the AAMC cannot support any new payment system that is financed by redirecting funds currently supporting critical health care expenditures, including those cuts that would disproportionately impact the nation’s teaching hospitals and teaching physicians.”

The letter also mentions that “teaching hospitals and their physician faculty have been in the forefront of testing new payment models and healthcare delivery systems that focus on team-based care,” and “while AAMC member institutions account for less than 6 percent of all hospitals, they constitute a much larger percentage of participants in reforms sponsored by the Centers for Medicare and Medicaid Services (CMS).” The letter points out that “AAMC members make up 44 percent of Health Care Innovation Award grantees; 34 percent of the Innovation Advisors Program; 18 percent of all CMS Accountable Care Organizations (ACOs); 38 percent of Pioneer ACOs; and 17 percent of Medicare Shared Savings Program participants.” 

Finally, the letter comments on AAMC’s support for inclusion of quality and efficiency into Medicare payments and the need to pay for value opposed to volume.  However, the letter also urges Congress “to recognize that there is little consensus about how to measure accurately quality and efficiency.  One concern is that many programs that are designed to reward value fail to adequately risk-adjust for factors, such as socioeconomic factors and social determinants of health, which have been proven to have an impact on health outcomes.  Teaching physicians and hospitals play a critical role in providing care for Medicare beneficiaries while caring for the sickest, most complex Medicare patients and providing primary care, as well as highly specialized services that may not be available elsewhere in the community.”

The committees’ plan was designed using feedback from physician groups and other stakeholders on Medicare physician payment reform submitted in the 112th Congress. The AAMC submitted comments both to Ways and Means [see Washington Highlights, June 1, 2012] and Energy and Commerce Committees [see Washington Highlights, April 29, 2011].


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

Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499

Mary Patton Wheatley, M.S.
Director, Health Care Affairs
Telephone: 202-862-6297


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806