Medicare SGR Repeal

MSMA Council Meeting October 15, 2011

Medicare Crisis Continues . . .

• 30% SGR cut scheduled for January 1st • Average $30,000 cut for each physician in Missouri • Congress has intervened to prevent SGR cuts 12 times in the past decade • Congress acknowledges cannot cut 30% - in past haven’t cut even 5% • Medicare payments about 4% higher than 2002 vs expenses about 24% higher

SGR Reform: Delay Means Higher Cost $700 $600 $500 $400 $300 $200 $100 $0 $298 2011 $320 $370 $420 $460 $500 $22 2012 $27 2013 cost of temporary fixes $38 2014 $60 2015 cost of permanent reform $92 2016

3

Access Is Threatened

• 20% of physicians overall, and 30% of primary care physicians already limiting number of Medicare recipients • One in four Medicare patients struggling to find primary care physician • 2012 election approaching

Precedent Exists for Repeal

• Numerous organizations propose fixing SGR as part of deficit reduction • “Gang of Six” and Simpson-Bowles proposals reduce deficit by

$4 trillion

while fixing SGR

Unique Opportunity for SGR Repeal

• American public demands fiscal responsibility • Congress has been keeping SGR deficit “off the books” • Time for budget tricks and gimmicks is over

• Linked debt limit increase to discretionary spending cuts • Total savings: $917 billion/ 10 years • Health care cuts and SGR provisions considered but not included • Established Joint Select Committee on Deficit Reduction • Charged with identifying additional savings of $1.2-$1.5 trillion/ 10 years • Failure to pass triggers sequestration

Joint Committee Changes Game

• 12-member committee must find $1.2 reduction – 1.5 trillion in deficit measures by Nov. 23rd • Congress to conduct up-down vote Dec. 23rd

• Main event for remainder of 2011 • AMA outlier in that we want Jt. Comm. To succeed/other groups prefer sequester • Success requires focus on few priorities • AMA currently focused on SGR and medical liability • GME & multiple other physician issues on watch/intervention list

Opportunities: • Size and scope can bear the burden • • Financial offsets still available Financial offsets more viable • • Escalating cost of short-term fixes argument gaining hold Simpson-Bowles deficit commission, Gang of 6, others have paved the way • Procedural protections Challenges: • View that SGR repeal represents spending increase not suited to this vehicle • Targeted physician cuts may be included • • Other programs of interest may be cut (e.g., GME) Working close to Jan. deadline • Other stakeholders have simple message/ more resources

Oct. 14, 2011 Nov. 23, 2011 Dec. 9, 2011 Dec. 23, 2011 Jan. 1, 2012 Jan. 15, 2012 Jan. 2, 2013 Standing committee recommendations due Deadline for Joint Committee vote Standing committee reports due on Joint Committee recommendations Deadline for House and Senate votes, procedural protections end 29.5% Medicare physician payment cut takes effect Joint Committee recommendations must be enacted to avoid sequestration OMB orders sequestrations needed to make required cuts

• • 50% of savings achieved through cuts in Defense spending 50% achieved through cuts in other discretionary and mandatory programs • • Medicare cuts capped at 2% Social Security, Medicaid, VA, various retirement funds, and many other programs exempt from cuts • Sequestration savings targets roughly $100 billion annually for 9 years • Required savings could be less if Joint Committee agrees on cuts below the $1.2 billion threshold • Cuts applied evenly across-the-board within each category (e.g., Defense, Medicare, other non-exempt programs)

Would eliminate SGR, but . . .

• Institutes 17% cut over 3 years to non-primary care physician payments, followed by 7-year freeze • Calls for 10-year freeze on payments for primary care services performed by primary care physicians, and 17% payment cuts for all other services

AMA strongly opposes proposal!

Congressional letter to Super

•

Committee

Rep Allyson Schwartz (D-PA) - sponsor • Signed: Paul Broun (R-Ga.), Joe Heck (R-Nev.), Jim McDermott (D-Wash.) and Phil Roe (R Tenn.). • Didn’t sign: Dan Benishek (R-Mich.), Charles Boustany (R-La.), Larry Bucshon (R-Ind.), Michael Burgess (R-Texas), Bill Cassidy (R. La.) Scott DesJaris (R-Tenn.), John Fleming (R-La.), Phil Gingrey (R-Ga.) Andy Harris (R-Md.), Nan Hayworth (R-N.Y.), Ron Paul (R-Texas), and Tom Price (R-Ga.).

• Super Committee proposal includes SGR repeal and Congress approves it • Super Committee does not include SGR repeal or misses deadline • Nov 23 - One month left to prevent 30% SGR cut on Jan. 1 st • Super Committee includes SGR repeal, but Congress votes against their proposal • $1.2 trillion in automatic cuts • Includes 2% cut for all Medicare providers • One week left to prevent 30% SGR cut on Jan. 1 st

• A credible deficit reduction package should include full repeal of the SGR • Recent bipartisan proposals have achieved over $4 trillion in savings while repealing the SGR • Recent “SGR patches” have increased the size of future cuts & the cost of full repeal • Medical liability reforms will lower health care costs by curbing meritless cases and reducing the practice of defensive medicine.

AMA to Congress: Repeal SGR Now!

• Sent joint letter to members of Super Committee • Sent video to Congress, president and Administration

National Ad Campaign http://www.youtube.com/user/AmerMedicalAssn#p/u/5/IM0giJ1foOY

We Need Your Help

• Use our template to email your Congressmen

www.ama-assn.org/grassroots

• Use our toll-free number to call them

1-800-833-6354

• Encourage your patients to get involved

www.patientsactionnetwork.org

• Access variety of campaign tools

www.ama-assn.org/go/medicarepayment Select “Medicare Physician Payment Advocacy Documents”

The AMA is working hard on your behalf.

Great changes equal great opportunity.

Medicine needs a strong voice – we need yours.

Join the AMA !

Thank you ! !

David Barbe, MD MHA Secretary, AMA Board of Trustees