Guest Post from Deborah L. Benzil, MD, FACS, FAANS
Member, AANS Board of Directors
Chair, AANS/CNS Communications and Public Relations Committee
Mt Kisco, New York

At this time of year, we are often inundated with saccharin comments about holiday giving. This year, I have decided I will request a simple gift that honors the real spirit of giving from the heart and embracing good will to all (wo)men. For December 2013, what I wanted for Christmas is a real, reasonable, bipartisan resolution to the spectacle known as the SGR (sustainable growth rate) physician payment formula. I did not think this was an unreasonable request, but I guess I was wrong.

Let’s take a moment to step back and understand how we got into this mess. The SGR was a provision of the Balanced Budget Act (BBA) of 1997. The SGR formula replaced something called the Medicare Volume Performance Standard, or MVPS, and this formula in part determines how physicians are paid by Medicare. Under the SGR system, payments to physicians are updated annually based on whether or not physicians meet annual spending targets. To help rein in growth in Medicare expenditures, spending cannot exceed the rate of overall growth in the economy, as measured by the gross domestic product, or GDP.

Initially, the SGR flew under the radar — physician payments represent only a small portion of all Medicare spending (just 16 percent in 2013). Since that time, however, several critical and important things have happened (or not happened). First, and of real consequence, is all the other spending restraints of the Balanced Budget Act pertaining to Medicare have been repealed or modified EXCEPT the SGR. Second, Medicare spending has continued to rise precipitously and now accounts for 46 percent of all federal government spending. Third, there has been bipartisan (that is both Democrat and Republican led undertakings) action to override SGR-related pay cuts every year since 2002 (in 2010 alone there were 5 different “fixes”). In fact, the system was instituted for the first years with little comment, but then came 2002 when the formula resulted in a 4.8 percent drop in physician fees — prompting the uproar that has persisted since. Crazy politics and crazy accounting have permitted each fix to only pretend that the monies were accounted for, such that the SGR “debt” has compounded over the past 11 years and grown to staggering proportions.

In reality, a comparison of the Medicare economic index (MEI), which measures the annual cost of medical practice inflation, versus the annual Medicare physician payment updates, shows the following:

MEIUnless Congress addresses this problem, this gap will continue into the future— with physicians now facing a 24 percent pay cut, while practice costs continue to climb. In addition, hospital payments —representing three times more spending than physician fees — have continued to rise in sync with inflation and have accounted for a great deal of the increased Medicare spending over the last 10-15 years. Finally, the costs associated with technological advances and the ever growing aging population, have further aggravated this situation.

And, just when I thought it might be possible to get my Christmas wish, on Dec. 12, the Senate Finance and House Ways and Means Committees passed, on a bipartisan basis, similar legislative proposals to repeal and replace Medicare’s SGR physician payment formula. Unfortunately, the revisions in this proposal — which would permanently repeal the SGR update mechanism and reform the fee-for-service payment system through greater focus on value over volume — did not address neurosurgery’s major concerns. In light of these outstanding issues, my specialty decided to oppose the current version of this proposal because it:

  • Freezes physician payments for ten years and fails to maintain a viable fee-for-service system;
  • Neglects to include at least a five-year transition period to the new value-based performance (VBP) payment system;
  • Creates a new budget-neutral, tiered quality payment program, which will pick winners and losers by pitting physicians against one another — potentially resulting in cumulative cuts of up to 50 percent by 2022 for some physicians;
  • Fails to ensure that quality measures are determined by the medical profession, rather than the government or others; and
  • Requires the Centers for Medicare & Medicaid Services (CMS) to cut an additional $3-5 billion from the Medicare Physician Fee Schedule to adjust so-called misvalued services.

To register these views with Congress, neurosurgery’s national societies joined 14 other surgical organizations, in sending letters to the committees opposing the “SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013” in its current form.

So it appears my Christmas wish will have to wait another year. At least I didn’t only get a lump of coal in my stocking, as Congress did pass legislation to prevent the 24 percent pay cut for another three months. Hopefully this will give all stakeholders more time to come back to the drawing board and negotiate a solution that will actually fix the problem.

Alas, I am not overly optimistic. One of the greatest failures of the entire SGR debacle is that it has unnecessarily alienated and angered physicians, leaving us less willing to cooperate and make important changes in medical practice. Since 2002, when physicians were informed of the 4.8 percent downward payment adjustment, physicians devoted considerable advocacy efforts and offered multiple proposed solutions to address this problem. Unfortunately, Congress has violated a crucial strategy required for all negotiations:  understand that many of those with whom you negotiate may also be those you must negotiate with in the future. Having destroyed all trust in the SGR negotiation over more than a decade, our Congress now asks us to enter into negotiations about new ways for physicians to reduce healthcare spending and improve quality and many physicians are not willing to even come to the table to discuss. In the end, this may be the real tragedy of the SGR problem. For now, more than ever, we need physicians leading the way to make the necessary improvements to ensure that the U.S. remains the best healthcare delivery system in the world. Our patients deserve no less.

Leave a Reply