By Tevi Troy

Just over two years ago, President Barack Obama signed the Affordable Care Act (ACA), a law purported to increase access to health care and to “bend down” the health care cost curve. A great debate over the implications of that law, especially in the areas of coverage, affordability, and quality of care, has arisen. Furthermore, a series of political and legal challenges have generated uncertainty about the law’s prospects within the health industry and at the state level. Despite this, the Department of Health and Human Services (HHS) has already issued over 12,000 pages of regulations elaborating on the original 2,700-page law, leading to more uncertainty regarding how appointed and career federal officials will determine the exact shape of the law’s final requirements. All of this uncertainty raises real concerns about how the new law will impact the most crucial actors in any health care reform effort: doctors.

Doctors are demonstrably nervous about the new law and how it will affect their incomes, their access to technologies, and their professional autonomy. According to a survey by the Doctors Company, 60 percent of physicians are concerned that the new law will negatively impact patient care. Only 22 percent are optimistic about the law’s impact on patient care. Fifty-one percent feel that the law will negatively impact their relationships with patients. These statistics raise questions about how and whether doctors will participate in the new system.

Continue reading “How The Affordable Care Act Will Affect Doctors”

By Merrill Goozner

Holiday cheer and bipartisan bonhomie are still possible on Capitol Hill.

For evidence, one need only look at the so-called “doc fix,” where Congress every year overrides a previous effort at health care cost control to ensure physicians get paid at least as much as they did the year before.  Expect another present to arrive at physicians’ offices sometime between Thanksgiving and Christmas, now that the Super Committee has failed to permanently resolve the issue as part of Medicare’s contribution to long-term deficit control.

The heretical thought that the salaries of physicians who treat Medicare patients could be held in check dates from the mid-1990s. The optimistically entitled 1997 Balanced Budget Act created a “sustainable growth rate” (SGR) for physician reimbursement that said any increase in total pay for physicians could not exceed the growth rate of the rest of the economy.

That was wishful thinking, as it turned out. Health care costs and physician pay far exceeded economic growth, largely because of Medicare’s fee-for-service system. While the Center for Medicare and Medicaid Services could fix the reimbursement rate for the 7,000 price-controlled services offered by physicians, it could not put a brake on the quantity that physicians ordered.

“This system, which ties annual updates to cumulative expenditures, has failed to restrain volume growth and, in fact, may have exacerbated it,” the Medicare Payment Advisory Commission (MedPAC) noted in its non-binding recommendations to Congress in mid-October.

Continue reading “The Doc Fix”

By JEFF GOLDSMITH

The Medicare Payment Advisory Commission (MedPAC) is the closest thing Congress has to adult supervision on important health policy questions. The Commission commands bipartisan respect both for its record of sound policy advice and for its leadership.

With its October recommendations, MedPac attempted to solve the sustainable growth rate (SGR) physician payment formula budget crisis by spreading its more than $300 billion cost beyond the physician community.  More than two-thirds of the burden would fall on hospitals, pharmaceutical and device manufacturers and, significantly, on Medicare beneficiaries themselves. Clearly MedPac’s intent was to widen the circle of pain.

However, a significant portion of the burden, over $100 billion, would still be borne by the physician community through 17 percent reductions in specialists’ fees and a ten-year freeze on primary care fees.    If implemented, MedPac’s policies will give rise to a festival of unintended consequences: weakening multi-specialty group practices (which rely upon specialist comp to cross-subsidize their primary care services); winding down private practice-based primary care medicine; accelerating the hospital roll-up of medical practices while widening hospitals’ losses on the practices they already own; and triggering a further wave of ill-timed cost shifting to private insurers.

Continue reading “MedPAC’s SGR Solution: Bad Medicine For A Chronic Problem”

By BRIAN KLEPPER & DAVID KIBBE, MD

By mid-November, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) must respond to the legal complaint filed in a Maryland federal court by six Augusta, Georgia family physicians.

These doctors are not asking for money, but for relief from the negative effects brought about by CMS’ twenty year reliance on the American Medical Association’s Relative Value Scale Update Committee (RUC) for valuing doctors’ work. They are asking CMS to enforce the Federal Advisory Committee Act(FACA), which requires that regulatory agencies shield themselves from undue special interest influence. In the process, they are asking CMS to rethink Medicare’s approach to physician payment, with a mind toward recognizing and valuing primary care’s ability to treat the whole patient within a larger system of care. They are asking CMS to develop payment policy that supports the needs of patients over those of professional groups.

In a sense, the suit reflects the larger concerns of America’s increasing unrest: a general frustration with a system rigged to benefit the few at the expense of the many, privatizing profits while socializing losses. It calls into question an incentive structure that has resulted in half or more of all health spending providing no utility and translating to exorbitant cost but debatable value. In other words, the case is accompanied by a sense that the system, as it is currently constituted, is failing the American people.

Any simple examination of medical services payment reveals the systematic under-valuing of primary care services relative to procedural services, the direct result of the RUC’s valuation process. For example, in an earlier Health Affairs Blog post we compared a 99214 moderately complex established office visit with a routine cataract extraction and intraocular lens implant. The first has all of medicine as it’s palette. The second is a highly refined, low risk, repetitive procedure that is valued, on an hourly basis, at 12.5 times the first.

Continue reading “CMS’ Opportunity: A Lawsuit Offers A Chance To Reform Physician Payment”