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AARP Offers Congress Steps to Improve Medicare

AARP Recommends Medicare Docs Paid Based on Quality, Not Quantity

In testimony before the Senate Finance Committee today, AARP advocated for a new system to reimburse Medicare doctors based on doctors' performance, and not volume.

"People on Medicare need a system that ensures they have access to quality doctors; however, the incentives for doctors should be placed on providing quality care, not quantity care," said physician and member of AARP's Board of Directors Dr. Byron Thames, who testified before the committee. "It is possible to give doctors the fair pay they earn while also giving patients the top quality care they deserve."

Under current law, Medicare updates physician fees using a method called the sustainable growth rate (SGR), which was designed to keep spending in line with an overall target. Since 2002, spending on physician services has exceeded the SGR target, triggering reductions in physician updates. With the exception of 2002, however, Congress has voted to override this mandated reduction in response to physician concerns. As a result, federal spending for Medicare Part B has grown more than it would have otherwise and has been a major factor in Medicare Part B premiums doubling since 2000. Additionally, Medicare members have seen their co-insurance increase as well.

"The SGR simply doesn't work and as a result Medicare Part B premiums have doubled since 2000," added Dr. Thames. "While the SGR should ultimately be eliminated in favor of a quality-based system, Congress must first lay the foundation to create a truly sustainable Part B payment system based on improved health IT, comparative effectiveness data, performance measurement, and enhanced care coordination."

In his testimony before the Committee, Dr. Thames was quick to point out that elimination of the SGR should not be viewed as carte blanche for the physician community to maximize revenues through uncontrolled increases in the volume of services. The volume of unnecessary services in Medicare remains a problem—both in terms of the quality of care provided and in terms of the rate of growth in Medicare spending. A new physician payment system should be designed to reward appropriate treatment.

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