Payment Reform

New! Legislation Would Reform Medicare Payments to Providers
A recently introduced bipartisan House bill would eliminate the Sustainable Growth Rate (SGR) formula and prevent a 30% cut in provider payments scheduled to take effect January 1, 2013. Read more here.  

Medicare Physician Reimbursement
Medicare’s contentious Sustainable Growth Rate (SGR) formula mandates cuts in physician payment rates when growth in outlays for physicians’ services exceeds growth in Gross Domestic Product.

Immediate and Long-Term Effects
The payment cuts would likely have both immediate and long-term effects on access to appropriate elder healthcare. Below-market reimbursement is a leading disincentive to entering or remaining in the fields of geriatric medicine, internal, and family medicine. Further cuts in payments are likely to discourage promising candidates from pursuing careers in geriatrics and may also exacerbate the loss of practicing geriatricians, internists, and family physicians. They could also discourage academic geriatricians from remaining in the field, further threatening the future supply of geriatrics health professionals.

Continued increases in physicians' practice expenses, could force a growing number of doctors to see fewer Medicare beneficiaries or stop seeing Medicare beneficiaries altogether.  Clearly, the SGR formula has proven to be neither sustainable for physicians nor beneficial for older Americans.  Physician payment updates should be based on annual increases in practice costs. 

Recommendations for Medicare Physician Payment System Reform
Changes in Medicare, Medicaid and private payer reimbursement are needed to ensure that older adults receive the care they need and that all healthcare professionals are adequately compensated for the care they provide.  Provider reimbursement should take into account differences in the complexity of patients' healthcare needs.  Among other things, services such as geriatric assessment and care coordination should be covered when integral to appropriate care. The extent to which the care of an individual patient is more or less time-consuming should be taken into account in determining reimbursement.  The goal should be to transform our delivery and payment systems to support high quality patient centered care for older adults, particularly those with complex and chronic conditions.