SGR uncertainty fuels physician reluctance to enter new Medicare payment and delivery models

Research conducted by the Medical Group Management Association (MGMA) and its standard-setting division, the American College of Medical Practice Executives (ACMPE), reveals that a persistent pattern of last-minute congressional reprieves from Medicare sustainable growth rate (SGR) payment cuts has held back physician practices from participating in new Medicare payment and delivery models.

MGMA-ACMPE reported its findings Oct. 22 based on survey responses received from more than 1,000 group practices in which more than 26,000 physicians practice.

Eighteen percent of respondents reported they were currently participating in a new Medicare payment delivery model or demonstration. Practices not participating cited the lack of predictability in current Medicare payments (a 27 percent payment cut is scheduled for Jan. 1) as the main barrier impeding their ability to experiment beyond traditional fee-for-service. Respondents also cited as a barrier the applicability of existing new payment models and demonstration programs to all physician practices, which vary considerably by size, specialty and location.

Eighty-two (82) percent of respondents said they would be likely to explore new payment and delivery models if a degree of stability were restored to the Medicare physician payment system.

"Our research shows that physician practices are willing to engage in new Medicare payment and delivery models that reward high-quality, cost-effective patient care outside of fee-for-service. Now Congress must do its part, repeal the SGR, and provide stability in Medicare payments so physicians can explore and test new patient-centered approaches," said Susan Turney, MD, MGMA-ACMPE president and CEO, in a prepared statement.

The research report also indicates that if payments were stable for five years, a significant majority of practices would be willing to explore alternatives to fee-for-service such as Medicare accountable care organizations, bundled payments and comprehensive primary care initiatives. MGMA-ACMPE said it continues to call on Congress, as it has for many years, to repeal the SGR and enact a five-year period of Medicare payment stability.

Respondents also shared that the constant uncertainly posed by the SGR has already forced physician practices to delay purchase of clinical equipment or facilities (60 percent of respondents), cut back on charity care (45 percent) and reduce clinical staff (36 percent).

"Practices are working diligently to be more patient-centered. These efforts are severely inhibited by the fact that they cannot make sound business decisions and move forward with so much uncertainty," Turney added in her statement.

The study also reflects that, as in previous years, physician practices will be forced to make drastic business and Medicare patient access decisions should a 27 percent cut occur. For example, 76 percent of respondents indicated they would reduce staff salaries and/or benefits, 65 percent said they would reduce the number of administrative support staff and 58 percent would reduce the number of clinical staff.

Fifty-eight (58) percent of respondents said they would be very or somewhat likely to stop accepting new Medicare patients if Congress fails to intervene to avert the physician payment cut scheduled to take effect at the start of 2013. Fifty-four (54) percent said they would only accept established patients aging into Medicare.