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National Commission on Fiscal Responsibility and Reform Issues Report

Thursday, December 02, 2010

The National Commission on Fiscal Responsibility and Reform released its report, Moment of Truth, providing recommendations to address the nation’s fiscal challenges. 

The report recommends a series of freezes and reductions in Medicare physician payments and tasks the Centers for Medicare and Medicaid Services (CMS) with developing an improved physician payment system that “encourages care coordination across multiple providers and settings and pays doctors based on quality instead of quantity of services.”

The Commission recommends that in lieu of Medicare physician payment rates determined by the Sustainable Growth Rate (SGR) formula, physician payments be frozen at current levels through 2013 followed by a one percent payment cut in 2014.  In the period leading up to 2014, CMS is directed to develop a new physician payment system to replace the inactive SGR formula.  If a new system is not developed by 2015, the SGR formula and its associated payment cuts are reinstated. 

The Commission also renewed its support for the Independent Payment Advisory Board or IPAB, an unelected board created by the Patient Protection and Affordable Care Act (PPACA). The Board, which was opposed by ASA and other physician organizations, is authorized to slash Medicare payment rates if certain Medicare spending thresholds are exceeded. The Commission recommends that in addition to physicians, hospital and other provider groups be subject to the payment cuts.

Commission members are expected to formally consider and vote on the report and its recommendations on Friday, December 3.  If 14 of 18 Commission members support the report, it is then formally sent to Congress for consideration as legislation.    

ASA continues to support permanent repeal and replacement of the SGR formula with a payment system that accurately reflects the costs of providing care. Short of full repeal, ASA supports proposals that 1) provide for appropriate payment updates; 2) do not exacerbate projected future payment cuts; and 3) begin to address the magnitude of the projected payment cuts – the “SGR debt.”

The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform

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