Clock ticking on Congress to act on Medicare SGR, federal budget

AAFP urges members to tell lawmakers to spare family medicine

posted 12.6.12

Family physicians once again face uncertainty heading into the new year as the clock ticks down to what will be the most painful Medicare payment cut to date under Medicare’s Sustainable Growth Rate Formula, 26.5 percent. This year, however, federal lawmakers must address the larger issue of the budget deficit, resolve the country’s “fiscal cliff,” and decide whether to allow an additional 2 percent across-the-board cut to be enacted under the Budget Control Act of 2011’s sequestration process.

Modern Healthcare (registration required) reports that lawmakers are considering changes to the Medicaid provider tax, evaluation and management services, and graduate medical education as areas to achieve entitlement program savings as part of a deficit reduction deal. And though Politico Pro (subscription only) says there’s a long-shot chance that the fiscal cliff talks could provide for full repeal of the SGR formula, Congress will more likely pass another yearlong patch at a cost of $25 billion over the next ten years. 

One idea for paying for an SGR patch, commonly called the “doc fix,” is to eliminate the Medicaid primary care payment increase scheduled for implementation on Jan. 1. This is one of three issues AAFP focuses on in its latest action alert, and the national Academy urges members to contact your congressional representatives to insist that they not take this action. AAFP provides three templates that can be easily e-mailed or mailed through Speak Out.

“If Medicare’s flawed Sustainable Growth Rate formula isn’t addressed, the pay cuts faced by family physicians in 2013 are very serious, but withdrawing the promise of primary care for low-income working families cannot be used to avoid the SGR’s cut,” AAFP says on its website.

The first letter template states strong opposition to the elimination of the Medicaid parity bonus. “Elimination of this policy further burdens the already challenged Medicaid system. Patients will face obstacles to connecting with a patient-centered medical home and will be forced to rely on episodic, acute care services provided in other settings, forgoing the more cost-effective coordinated and preventive care services that primary care physicians provide.”

The second letter urges Congress to stop broad cuts under sequestration and to protect the funding for key health professions programs that support family medicine research, education, and training. This includes Title VII funding that supports the Primary Care Training and Enhancement program, the National Health Service Corps that places medical professionals in health professional shortage areas, and the Agency for Healthcare Research and Quality’s Center for Primary Care, Prevention, and Clinical Partnerships that serves as the home of AHRQ’s Practice-Based Research Network of primary care ambulatory practices.

The third letter urges Congress to protect Medicare Graduate Medical Education funding. However, AAFP states that if cuts must be made, lawmakers must prioritize vulnerable primary care training and spare these programs from across-the-board cuts.

As always, AAFP provides information on Medicare participation options to help you make an informed decision about your contractual relationships with the program. AAFP does not advise or recommend any of the three options; they are provided for informational purposes only.

“Physicians may sign a participating (PAR) agreement and accept Medicare’s allowed charge as payment in full for all of their Medicare patients. They may elect to be a non-PAR physician, which permits them to make assignment decisions on a case-by-case basis and to bill patients for more than the Medicare allowance for unassigned claims. Or they may become a private contracting physician, agreeing to bill patients directly and forego any payments from Medicare to their patients or themselves.”

Physicians may change their status annually and the decision is generally binding until the next contracting cycle. Find more information here, on AAFP’s website.

Additionally, Kent Moore, senior strategist in AAFP’s Practice Advancement Division, wrote an article for Family Practice Management in 2008 on preparing for a Medicare fee cut that still applies today. First, he advises physicians to evaluate the impact and how it would affect your margins specifically, easily calculated through FPM’s Medicare cut impact tool. Second, review your options: whether opting out, closing your practice to Medicare patients, no longer accepting new Medicare patients, reducing the number of Medicare patients in your practice, or changing your participation status.

And third, and perhaps most important, he advises physicians to devote extra attention to collections to ensure better and steadier income. This might include reviewing and addressing the average age of unpaid claims, denied claims not resubmitted, and repeated claim submission errors.

“In the end, how you cope with Medicare cuts, if they happen, will depend on the particular financial and other parameters of your practice. That said, now is the time to begin preparing for Medicare cuts, so that if they occur, you and your practice will be ready for them.”