AAFP: Repeal SGR, give PCPs 3% raise

September 7, 2011

The American Academy of Family Physicians (AAFP) is urging a new congressional ?supercommittee? to repeal the despised Sustainable Growth Rate formula and stipulate a reimbursement system for the next 3 to 5 years that will give primary care physicians a 3% higher payment rate. Read on to find out why AAFP argues that spending more healthcare dollars on primary care will likely save money in the long run.

The American Academy of Family Physicians (AAFP) is urging a new congressional “supercommittee” to repeal the Sustainable Growth Rate (SGR) formula and stipulate a reimbursement system for the next 3 to 5 years that will give primary care physicians (PCPs) a 3% higher payment rate.

That will allow time to collect data from demonstration programs and alternative healthcare delivery models so that a workable, long-term payment process can be devised, said Lori Heim, MD, in a letter to members of the newly appointed Joint Select Committee on Deficit Reduction.

The supercommittee, with equal numbers of Democrats and Republicans from the House and the Senate, has a goal of reducing the federal budget deficit by at least $1.5 trillion over the next decade, with a deadline of November 23 to find the spending cuts.

AAFP failed in its previous efforts to persuade Congress to repeal the SGR as part of the deal that lead to the creation of the committee.

“The evidence for the value of primary care in restraining healthcare costs and improving quality is very clear,” Heim wrote. “There is also growing evidence that experiments with the Patient-Centered Medical Home and accountable care organizations-particularly those that emphasize improved access to more robust primary care teams-can reduce total costs by 7% to 10%, largely by reducing avoidable hospitalizations and emergency room visits.”

The letter also asked the committee to “re-balance” the healthcare system through greater investment in primary care and the care management and cognitive medical skills it provides.

“The U.S. has built a healthcare system that focuses on acute care at the expense of preventive care, coordination of care, and chronic disease management,” Heim said.

Based on data from some new healthcare delivery models, Heim said that increasing primary care payments to 10% to 12% of total healthcare spending could offset inpatient hospitalization costs by 50% or more. Primary care currently accounts for 6% to 7% of total Medicare  spending.

AAFP also cautioned against any reduction in graduate medical education funds because of the increasing need for PCPs and said that primary care should be exempt from any reductions.

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