Physician Practices Already Feeling SGR Effects

Though the scheduled Medicare pay cut due to the flawed sustainable growth rate (SGR) formula has been averted each year for nearly a decade, the uncertainty and anxiety associated with it remains.

That unease brings with it big consequences for physician practices, according to a recent survey put forth by the MGMA-ACMPE of more than 1,000 physician group practices.

The majority of respondents (82 percent) said they would be more likely to explore new payment and delivery models if a degree of stability was restored to the Medicare payment system. In fact, the most commonly cited reason among respondents for not participating in such new models was lack of payment predictability due to the looming 27 percent. 

"Our research shows that physician practices are willing to engage in new Medicare payment and delivery models that reward high-quality, cost-effective patient care outside of fee-for-service,” internist Susan Turney, MGMA-ACMPE president and CEO, said in a statement. “Now Congress must do its part, repeal the SGR, and provide stability in Medicare payments so physicians can explore and test new patient-centered approaches.” 

The survey had some other troubling findings. The majority of respondents said that if the 27 percent cut is not averted in 2013, they will need to reduce staff salaries and/or benefits.

Practice Notes blogger and family physician J. Scott Litton recently noted some of the other potential consequences. “Decreasing payments to physicians will prevent them from purchasing new equipment for their offices, can delay adopting EHR services, and can even force practices to decrease their staffing in the office by either eliminating positions or laying off employees,” he wrote.

Unfortunately, the MGMA survey suggests that physician practices are already taking these steps due to the uncertainty surrounding a potential SGR cut: 

• Sixty percent of respondents said they had reduced staff salaries and/or benefits;
• Sixty percent said they had delayed purchasing clinical equipment and/or new facilities;
• Forty five percent said they had reduced charity care;
• Thirty six percent said they had reduced clinical staff due to the uncertainty.  

As January 1 rapidly approaches, the MGMA-ACMPE is not the only organization stepping up its efforts to convince Congress to repeal the SGR. The AMA also recently identified the benefits of such a repeal.  

"The release of the Medicare physician fee schedule rule reminds patients, physicians and Congress that the time to act to prevent looming Medicare cuts is now,” internal medicine and infectious disease specialist Ardis Hoven, AMA president-elect, said in a statement. “... Eliminating this failed formula will allow us to enter a period when physicians can begin transitioning to new payment and delivery models to help meet the overall goal of improving patient care and moving to a higher performing Medicare program.”