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Proposed SGR Fix: An Interesting Twist

June 14th, 2010 by Shadowfax in Health Policy, Opinion
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This is something I haven’t seen reported on elsewhere, but according to the ACEP 911 Legislative Network Weekly Update, there was an interesting twist in the Democrats’ proposed SGR fix:

The latest plan increases physician payments by 1.3% for the remainder of this year and by an additional 1% in 2011. In 2012 and 2013, physician services would be separated into two categories, or “buckets.” One bucket would be for E&M services (including emergency department, primary and preventive care) and the other group would include all other services. The E&M bucket would increase at the same rate as the U.S. gross domestic product (GDP) plus 2%, while the other group would receive a payment increase of GDP plus 1%.After 2013, the payment formula would revert back to the current SGR formula, which means physicians would face cuts in the range of 30-35% unless Congress intervenes.

So it’s another temporary fix, kicking the can past the next presidential election. But it’s the first one I have seen that attempts to address the gross disparity in reimbursement for procedural services compared to the cognitive services. It bypasses the RUC and almost every other existing mechanism for determining reimbursement under the MPFS.

I’m not sure what happened with this proposal. I don’t think it was in the version of legislation the House passed, so I think it might be dead. But the situation is so in flux that who really knows? If nothing else, it’s an encouraging sign that policymakers know the problem exists and are willing to throw out possible solutions. This one may be dead, but it’s a good start.

*This blog post was originally published at Movin' Meat*

Independent Primary Care: The “Loss Leader” Of Medicine

March 31st, 2010 by KevinMD in Better Health Network, Health Policy, Opinion, Primary Care Wednesdays
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Medicare’s sustainable growth rate, or SGR, has been the bane of doctors for years now. To encapsulate, this is the reason for Medicare’s annual threat to cut doctors’ fees by 20% or more, only to be staved off at the last minute.

Emergency physician Shadowfax has a nice take on it, explaining why it has devastated primary care:

Primary care has many fixed expenses in addition to those we bear: they pay rent, nurses and techs and secretaries, healthcare costs for their employees, equipment, scheduling software, etc etc. The fixed costs portion of a typical office practice can be much higher, consuming 60-80% of gross revenue. Worse, many of these “fixed costs” for primary care are not truly fixed, but increase annually consistent with inflation.

I wrote several years ago that primary care is the “cheap DVD” of the medical profession — a loss leader to bring people in the door for more lucrative services. Shadowfax agrees, arguing that it’s unlikely there will be any independent primary care practices in the near future:

I predict that, if nothing else changes in the overall model of physician reimbursement, within a decade there will be almost no independent primary care left in existence — they will all have been subsumed into hospital-owned or group practices to serve as “loss leaders,” existing solely to drive referrals to profit centers like surgical services and imaging facilities.

Bingo.

*This blog post was originally published at KevinMD.com*