Replacing the SGR + Add-Ons

by David Gimlett, M.D.

It was announced yesterday that U.S. Senate and House negotiators have reached a bipartisan agreement to repeal the Sustainable Growth Rate (SGR). So far we have just a one-page summary of the agreement. (1) Like most congressional actions the devil will be in the details. So far there is no announcement of how we will pay the some $120-$150 billion cost of the repeal.

Most significantly, the SGR has to go.  It has been overridden for the last decade and has served no function but to hang as an albatross around the necks of both the Congress and physicians. 

Unfortunately, it appears that the proposed legislation will use this excuse of payment reform to enforce unproven quality measures and questionable clinical guidelines. Not reassuring is the statement that the plan “Requires the development of quality measures and ensures close collaboration with physicians and other stakeholders regarding the measures used in the performance program.”  If the close collaboration with physicians resembles the present collaboration with the AMA in defining the RBRVS then the health and medical care in our country are in jeopardy. Hopefully the medical advisors will include physicians who are legitimately skeptical about the metrics and objectivity of present guidelines and quality measures. Much more research is needed in the area of quality of care before any plan is allowed to dictate what is good and bad medicine. 

Conflicts of interest have been present in most of the present (and sometimes conflicting) guidelines. It has been impossible to prevent agencies and insurance companies from using guidelines as mandates. This plan “Introduces physician-developed clinical care guidelines to reduce inappropriate care.”  Besides the problematic nature of much of the data the whole idea ignores the fact that with individual patients there are always many outliers who don’t fall within the 80% or 93% applicability of the guidelines.  Often what is inappropriate for most people in a group is very appropriate for some and even the best available for a few others. 

Everybody is different. Legitimate variation from guidelines will have to be justified one-by-one. Documentation, writing letters of appeal, pre-authorization, etc., is already an expensive and soul-killing burden on primary care physicians. Creating a system that requires even more of this will continue our journey down the road to impersonal, computer dictated medical care. As Berenson and Kaye so ably point out, “Although we agree that value-based payment is appropriate as a concept, the practical reality is that the Centers for Medicare and Medicaid Services (CMS), despite heroic efforts, cannot accurately measure any physician's overall value, now or in the foreseeable future.”(2)

Also included in the plan is a raise of physician fees of .5% a year for 5 years (because of inflation this means a loss in real dollars over the 5 year period). There is no hint of any correction to the present RBRVS formula that rewards high cost procedures. Instead, the plan uses bonuses to “incentivize” physicians to join alternate payment models (APMs). This is an attempt to work away from fee-for-service payment.  While the goal is worthwhile in the long haul the method is nothing but jerry-rigging a Kafkaesque system that is not sustainable. The only effect will be to hasten the exodus of primary physicians from private practice exacerbating the manpower shortage for the 600 million people who live in rural American. Suburban America is already feeling the same pain. Alternate pay models such as the “Patient Centered Medical Home” (PCMH) are driven from the top down with hospitals and insurers at the top. These urban institutions are the last to care about the health of real people with individual medical needs. For a good read on the problem of the decline of primary care read Dr. John Geyman’s book, Breaking Point. (3)

Let’s hope that as this bipartisan agreement is further tweaked the legislators will listen to the voices of those of us who have worked and are working in the trenches and not to the corporate interests of the insurance and hospital industries and organization medicine.

Suggested Reading:


2) Grading a Physician's Value — The Misapplication of Performance Measurement

Robert A. Berenson, M.D., and Deborah R. Kaye, M.D.

N Engl J Med 2013; 369:2079-2081 November 28, 2013 DOI: 10.1056/NEJMp1312287

3) “Breaking Point; How the Primary Care Crisis Endangers the Lives of Americans.” By Dr. John Geyman

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