New AMA Video Illustrates the Need For Repeal of Medicare Payment Formula

New AMA video illustrates the need for repeal of Medicare payment formula

With Medicare physician payments scheduled to be cut nearly 30 percent Jan. 1, the AMA shared a video with members of Congress on July 22 that calls repeal of the broken Medicare physician payment formula—the sustainable growth rate (SGR)—a fiscally responsible choice.

In the video, the AMA notes that “since 2002, Congress has stepped in 12 times to stop these cuts—four times just last year. But, like making minimum payments on a credit card, they never really pay the bill.” It then calls on Congress to “… make the fiscally responsible choice. Stop digging the hole, pay the bill. Repeal the SGR.”

The cost of physician payment reform has grown over the years because of frequent short-term fixes passed, but not fully paid for, by Congress. The cost of permanent reform in 2005 would have been $48 billion, but today it is estimated to be nearly $300 billion. The cost will continue to rise to $500 billion in only a few short years without action. The amount of the scheduled cuts has also grown and threatens access to care for seniors and military families.

“With a nearly 30 percent cut scheduled to occur on Jan. 1, and the cost of reform increasing, the AMA released this video to show that the time for Congress to act is now,” AMA president Peter W. Carmel, MD, said.

The AMA has called for a three-pronged approach to Medicare physician payment reform, which it outlined earlier this year in testimony before Congress. The approach includes repealing the failed SGR formula, implementing a five-year period of stable Medicare physician payments, and testing demonstration and pilot projects that could form the basis for a new Medicare physician payment system.

The AMA and 112 state and medical specialty societies recently sent a letter to the president, vice president and congressional leaders urging that repeal of the SGR be part of any plan to increase the debt ceiling. Repeal of the SGR has bipartisan support and was included in the recent deficit reduction plan from the “Gang of Six” Senators. The AMA and other physician groups issued a statement on the “Gang of Six” plan July 20.

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