Published 11/1/2010
Joseph Weistroffer, MD

The SGR in 2010: Another cliffhanger

By Joseph Weistroffer, MD

For the fourth time this year, physicians are pushed to the edge

Nov. 30, 2010, is an important day for physicians. That’s when the current short-term “fix” to the Medicare Sustainable Growth Rate (SGR) formula expires. Without legislative action, physicians can expect a 23.5 percent decrease in Medicare reimbursement beginning Dec. 1. Considering that the House has recessed until Nov. 15, and the Thanksgiving holidays are Nov. 25–26, the “lame duck” Congress that returns after the November elections will have just about 10 days to act.

In 1997, Congress created the SGR as a Medicare cost containment strategy, linking increases in physician compensation with increases in the gross domestic product (GDP). Under the SGR formula, Medicare payments to physicians are cut if healthcare costs outpace the spending targets established by the formula—an event that first occurred in 2002. Fearing this cut would lead to physicians dropping Medicare patients and potentially upsetting a very large group of voters, Congress has intervened to postpone the reduction in reimbursement every year since 2003.

Don’t jump off…jump in
With the impending vote approaching, we, as orthopaedic surgeons, have an opportunity to see the flawed SGR formula permanently revoked. We can act to help influence this vote in several ways. One way to effect change is by supporting candidates sympathetic to our position through direct campaign contributions, donating time, hosting fundraisers, or supporting political action committees such as the Orthopaedic PAC. These are long-term strategies, which will become increasingly important as government assumes more control over health care.

In the short term, we can employ several strategies to help our elected officials understand the importance of revoking the SGR. One simple method is direct contact—we can e-mail or phone our senators and representatives. We can share with them how the cut in reimbursement will limit the number of Medicare patients we can care for and still pay the bills. We can tell them how the impending cut in fees makes it hard to project business income and determine whether we can hire more office staff or purchase new equipment. During a personal visit to a congressman or senator, this tactic is even more effective.

Another approach is to spread the message to others, clearly outlining the problems with the SGR and its effect on the practice of medicine. We can start by recruiting our colleagues through phone calls, e-mails, letters, or text messages, urging them to contact their representatives. We can let them know that we’ve contacted our representatives and share the points we made. Uniting together and speaking with one voice can help us achieve this common goal.

Reach out as well
But why stop with our physician colleagues? The SGR affects so many in the healthcare field, both directly and indirectly. Our office staffs have a vested interest in our ability to maintain collections to cover our overhead costs. Explain to your employees the particulars of the SGR formula and its automatic cut in rates. Explain how other insurance carriers and negotiated contracts tie their reimbursement rate to Medicare’s rate. Remind them of what happened earlier this year, when Congress failed to act on a timely basis and the Centers for Medicare and Medicaid Services withheld reimbursements temporarily. With no payments coming in to cover Medicare services, the practice was essentially held hostage.

Letting our employees understand the economic realities of our political system and its direct effect on their jobs and office can be quite a motivating message. Then teach them how to or help them contact their representatives to ask for a permanent fix to the flawed SGR.

We can also educate others with whom we deal wherever we are in the hospital, whether in the lounge, cafeteria, or operating room. Many nurses and technologists might not understand how cuts in physician reimbursement affect them. After all, hospitals and nursing homes have received annual cost-of-living increases in their reimbursement over the past decade; only physicians have had to deal with the potential of SGR formula rate cuts and last minute reprieves.

As the doctor’s practice gets hit, it will indirectly affect the hospital and its employees. If the government can cut physician rates today, it can cut hospital rates tomorrow, directly affecting their jobs as well.

Finally, we should try to educate our patients on the impact the SGR has on our practices and their health care. Medicare cuts will make it virtually impossible for a physician with a largely elderly patient population to cover the costs of running a practice. Patient access to physician services will likely be affected if these services aren’t adequately compensated.

If you don’t feel comfortable discussing this matter with your patients, you can at least make it clear that the American Medical Association represents less than 20 percent of doctors in the United States and does not represent the majority of orthopaedic surgeons. You can make copies of editorials from news magazines, the local paper, or the Internet and have them available in the office reception area, along with instructions for contacting members of Congress. It would be a powerful statement to lawmakers if patients voiced their support for a permanent fix to the SGR.

No better time than now
The recent passage of healthcare reform without taking into consideration physician concerns as represented by specialty societies like the AAOS has made it clear that we need to be more involved in the political process. The Nov. 30 deadline on the SGR formula is a perfect opportunity for us to make our voices heard. We must be leaders in our field and advocates for our patients.

Joseph Weistroffer, MD, is a member of the AAOS Advocacy Resource Committee. He can be reached at j-weistroffer@northwestern.edu