AMA Endorses Senate Healthcare Reform Bill, But Warns It Will Withdraw Support Unless Sustainable Growth Rate Formula Is Amended

Mark Crane

December 21, 2009

December 21, 2009 — Although applauding the expansion of insurance coverage to millions and the elimination of denials based on preexisting conditions included in the Senate healthcare reform bill, the American Medical Association (AMA) warned that it will withdraw its support unless Congress works to reform Medicare's "fatally flawed physician reimbursement formula, the Sustainable Growth Rate."

The comments were made in a letter to Senate Majority Leader Harry Reid (D-Nevada).

The AMA, the nation's largest physician group, has been lobbying for an overhaul of the health system and worked closely with the Obama administration and Democratic congressional leaders. It endorsed the House of Representatives reform bill earlier this year but until now had withheld support of the Senate legislation. Last week, it opposed expanding Medicare coverage to those aged 55 to 64 years.

"All Americans deserve affordable, high-quality health coverage so they can get the medical care they need — and this bill advances many of our priority issues for achieving the vision of a health system that works for patients and physicians," said AMA President-Elect Cecil B. Wilson, MD, in a statement.

The Senate bill will improve choice and access to affordable health insurance coverage, the AMA said. "The bill will increase coverage for preventive and wellness care that can lead to better disease prevention and management, and further the development of comparative effectiveness research that can help patients and physicians make informed treatment decisions.

"Lifetime limits on health coverage will be a thing of the past — as will higher premiums based on medical conditions or gender," said Dr. Wilson. "These are important benefits for those who have insurance now — and those who want it but have been unable to get it."

Wilson also said the bill increases payments to primary care physicians and general surgeons in underserved areas while no longer cutting payments to other physicians."It eliminates the tax on physician services for cosmetic surgery and drops the proposed physician enrollment fee for Medicare."

The Medicare payment formula, however, is a potential deal-breaker for the AMA. Physicians were facing a planned 21% cut in payment under the Sustainable Growth Rate until Congress recently acted.

The House voted to eliminate the Sustainable Growth Rate formula last month, but the Senate turned down a similar measure in October because the $245 billion cost was not paid for. Congress recently approved a 60-day stay to prevent Medicare payment cuts as part of a defense spending bill.

The AMA has argued that low Medicare pay threatens patient access to care.

"Physicians, and increasingly patients, are rapidly losing faith in the ability of Congress to address this critical issue," AMA Executive Vice President and Chief Executive Officer Michael D. Maves, MD, MBA, said in a letter to Reid.

"It is for that reason that the AMA will oppose efforts to apply temporary band-aids beyond the 60-day extension included in the FY 2010 Defense appropriations bill. Congress must replace the [Sustainable Growth Rate] early next year in order to achieve the access, payment and delivery reform goals.... We will not support a final Conference Report without a clear pathway for passage of a permanent repeal of the [Sustainable Growth Rate] formula early next year."

The American Hospital Association, which represents 5000 hospitals, also endorsed the Senate bill. In a letter to Reid, it said it hopes that lower Medicare payments to hospitals with high readmission rates can be changed before final passage.

America's Health Insurance Plans continues to oppose the bill, saying it will lead to higher premiums. The organization particularly objects to cuts to privately administered Medicare Advantage plans and caps on insurers' administrative costs.

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