AHA executive calls SGR system “terribly flawed” and proposes new payment system

CHICAGO – If Congress does not act in the coming weeks, physician payments for treating Medicare patients will decrease by 21 percent on April 1.

This is the 17th time doctors are facing a potential pay cut, according to Richard Pollack, executive vice president for advocacy and public policy at the American Hospital Association. Pollack spoke Tuesday at the American College of Healthcare Executives’ Congress on Healthcare Leadership.

Congress created the sustainable growth rate (SGR) system in 1997 to tie Medicare payments to the growth of the economy, but health costs have increased at a far higher rate than the economy in the past decade. Congress has repeatedly passed “doc fix” bills to increase Medicare funding, but it had not done so as of Tuesday.

Pollack called the SGR system “terribly flawed” and said there is bipartisan agreement that it should be overhauled and replaced with value-based purchasing or another payment model.

“Everyone says we need to get rid of this system,” he said.

The AHA also does not want another delay in ICD-10 implementation, according to Pollack. As of now, the Centers for Medicare & Medicaid Services is requiring everyone covered by HIPAA to use ICD-10, which does not apply to CPT coding for outpatient procedures and physician services.

ICD-10 was most recently delayed in March 2014 when Congress approved a temporary “doc fix” for the SGR payment system.

“It’s time to move forward, but you never know when a delay will pop up,” Pollack said.