American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Repealing the SGR Talking Points

The current Medicare physician payment system and its sustainable growth rate (SGR) formula are widely recognized as fundamentally flawed. We are appreciative that the House Energy and Commerce and Ways and Means Committees, as well as the Senate Finance Committee, have taken an active, bipartisan approach to developing a new Medicare physician payment system and a long-term solution.

  • It is urgent that we replace the system this year.
  • Congressional inaction over the past decade has exponentially increased the cost to fix the system. In 2005, a permanent fix would have cost less than $50 billion. Today, it costs $138 billion (it has been as high as nearly $300 billion), the lowest cost in years.
  • The volatility and instability of the current system not only threatens Medicare beneficiaries’ access to care, but also makes it next to impossible to adopt meaningful reforms.

We believe that any new payment system should be based on the complementary objectives of improving patient outcomes, quality, safety, and efficiency while simultaneously reducing the growth in health care spending. We believe that in order for any new payment system to be successful, it should, at a minimum, achieve the following:

  • Permanent repeal of the SGR. This must be done first, and separately offset, if we are to reform the entire system.
  • Provide a period of at least five years of payment stability.
  • Physicians and physician organizations should lead the development of the quality improvement programs and standards to best meet their patients’ needs.
  • Positive incentives must be used to align payment models with proven quality improvement programs.
  • Improve and streamline existing programs, such as the Physician Quality Reporting System (PQRS), EHR and value-based payment modifier programs, to avoid redundancies and unnecessary overlap of current or new programs.
  • Decrease the administrative burden and eliminate duplicative individual and group level assessments and reporting requirements.
  • Engage in a versatile and inclusive process, working with the physician community and other stakeholders, to find flexible solutions, not a “one-size-fits-all” approach.
  • Reflect that care is delivered in a variety of geographical locations and facilities.
  • Incorporate flexibility and risk adjustment within the new system’s payment models to address individual patient needs in urgent or unique situations.
  • Standards and coverage decisions must be based on scientific evidence so that care providers can choose the right care, at the right time, given the patient’s condition.
  • Establish safe harbor protections for physicians for following appropriate evidence-based guidelines, appropriateness criteria, or other quality improvement program guidelines.

We believe these principles strike the right balance between fiscal prudence, delivering high-quality care, and preserving the trusted physician-patient relationship.

Learn more about the American College of Surgeons' (ACS) positions on reforming the Medicare physician payment system.