What’s being done (and not) to fix Medicare physician payment problems

The story of the American Medical Association (AMA) committee that updates the relative payments by Medicare to physicians has been told before. It’s the Relative Value Scale Update Committee (RUC), and you can read all about it in a recent Washington Monthly piece by Haley Edwards, which was followed this weekend by a similarly-themed Washington Post piece by Peter Whoriskey and Dan Keating.

Unknown to most, a single committee of the AMA, the chief lobbying group for physicians, meets confidentially every year to come up with values for most of the services a doctor performs.

Those values are required under federal law to be based on the time and intensity of the procedures. The values, in turn, determine what Medicare and most private insurers pay doctors.

But the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors’ time, as well as interviews and reviews of medical journals.

If the time estimates are to be believed, some doctors would have to be averaging more than 24 hours a day to perform all of the procedures that they are reporting. This volume of work does not mean these doctors are doing anything wrong. They are just getting paid at the rates set by the government, under the guidance of the AMA.

No, doctors aren’t doing anything “wrong,” but something is obviously very wrong with how relative Medicare payments to doctors are updated. Problems also exist with the how the overall level of Medicare payments to physicians is updated. The issue arises in Congress approximately annually, as the body confronts what to do about the latest delay in implementing the Sustainable Growth Rate (SGR) formula that governs it. So, there is ample opportunity for Congress to address issues with the RUC.

And, as it happens, a new SGR fix (aka, “doc fix”) is making it’s way through the hallowed halls. What would it do?

The bipartisan measure provides 5 years of stable Medicare payments starting next year, with reimbursements growing 0.5% for each year between then and 2018. […]

The “Update Incentive Program” would — starting in 2019 — place at risk a certain amount of fee-for-service (FFS) payments and base those reimbursements on quality measures.

Quality measures would compare physicians with their subspecialty peers. Measures are to be based on clinical care, safety, care coordination, patient experience, and population health.

Physicians scoring in the top third of their group will receive a 1.5% bonus. Those landing in the middle third will receive a 0.5% bump in Medicare pay. Doctors who score in the bottom third will receive a 0.5% penalty in payments. […]

Physicians may opt out of this quality-incentive program if they participate in an alternative payment model such as a patient-centered medical home (PCMH), accountable care organization (ACO), or bundled payment program.

“Providers may submit proposals on an ongoing basis for innovative [alternative payment models] through a newly developed, streamlined process that encourages high-quality, high-value healthcare,” the committee said.

Physicians who decline to report their quality data or participate in a alternative model will receive a 5% cut in payments starting in 2019.

In other words, it’d do many things — arguably good — but not touch the RUC (unless I’ve missed something). Meanwhile, Medicare is planning a quicker route toward performance-based pay.

The changes would affect nearly 500,000 physicians working in groups. The federal health law requires large physician groups to start getting bonuses or penalties based on their performance by 2015, with all doctors who take Medicare patients phased into the program by 2017.

The program is a major component of Medicare’s effort to shift medicine away from its current payment system, in which doctors are most often paid for each service regardless of their performance. The current system, researchers say, financially encourages doctors to do more procedures and is one of the reasons health costs have escalated. The health law required Medicare to gradually factor in quality into payments for hospitals, nursing homes, physicians and most medical providers.

Again, no RUC changes here. Also, the AMA is opposed to the program.


Hidden information below


Email Address*