October 9, 2013

WASHINGTON, DC — Today, experts from across the political spectrum called on Congress to replace the Medicare’s sustainable growth rate (SGR) physician payment formula with approaches that promote higher- value care instead of greater volume of services.

In letters sent to the leadership of the Senate Finance Committee and the House Ways and Means Committee, thought leaders from conservative, progressive, and centrist think tanks united with nonpartisan stakeholder groups to urge SGR reform that establishes a clear path to new payment models.

In previously released work and policy recommendations, several of the signatories have proposed permanent SGR repeal with delivery and payment reforms that curb costs and improve quality, but today’s letter is the first joint expression of that position from the signatories. Absent congressional action this year, the SGR payment formula is scheduled to impose a 24% pay cut on physicians and a range of other Medicare providers on  January 1.

The full texts of the letters are as follows:

Dear Chairman Baucus, Chairman Camp, Ranking Member Levin, and Senator Hatch:

Consensus on difficult issues of health care policy is exceedingly rare. But we write as individuals and organizations from across the political spectrum united around a key principle: that Medicare’s Sustainable Growth Rate (SGR) mechanism must be replaced with reforms to the payment and delivery system that help lower the rate of growth in health care costs while improving the quality of care.

Specifically, any repeal of the SGR must establish a clear path to new payment models that support value and accountability for quality and costs. Congress could establish such a path in one of two ways:

1.      Establish a timeline for Medicare to phase in new payment models for a gradually increasing share of Medicare’s spending; and/or

2.      Establish a timeline for Medicare to phase in strong financial incentives for physicians to adopt one of several alternative payment models.

Not only would such a path vastly improve the health care system, but it would also help hold down Medicare expenditures.

Repeal of the SGR offers a real opportunity to reform the payment and delivery system – one that should not be missed. We stand ready to support you in making this critical reform, which will lower costs for both the government and seniors, improve the quality of care, and catalyze change throughout the health care system.

Sincerely,

Joseph R. Antos, Ph.D.
Wilson H. Taylor Scholar in Health Care and Retirement Policy
American Enterprise Institute*

G. William Hoagland
Senior Vice President
Bipartisan Policy Center

Kavita Patel, MD MS
Fellow and Managing Director, Economic Studies
Brookings Institution*

Topher Spiro
Vice President, Health Policy
Center for American Progress

Ezekiel Emanuel, MD
Senior Fellow
Center for American Progress

Joel C. White
President
Council for Affordable Health Coverage

Lanhee J. Chen, Ph.D
Research Fellow
Hoover Institution, Stanford University*

Larry Atkins
President
National Academy of Social Insurance*

John Rother
President and CEO
National Coalition on Health Care

David Lansky
President and CEO
Pacific Business Group on Health

Gail R. Wilensky, Ph.D
Senior Fellow
Project HOPE*

Jim Kessler
Senior Vice President for Policy
Third Way

* Denotes that the listing of this organization is for identification purposes only and does not imply organizational endorsement