THCB

The Fix that Failed

The new “fiscal cliff” legislation hailed by some as a “one-year doc fix” of the scheduled 26.5% sustainable growth rate (SGR) cut that was scheduled to take effect on 1 January 2013, has passed the Senate and House as part of the American Taxpayer Relief Act ( HR 8 ) goes to President Obama for his likely signature.

But was this “one-year doc fix” really a fix?

Not at all.

In fact, once again Congress has failed to resolve the ever-present sustainable growth rate cuts that repetitively surface year after year by kicking the proverbial can down the road another year.

The cost of the one year patch will be $25.1 billion dollars over 10 years and will be paid for almost entirely by health care cuts in other areas.

  • Hospitals (increasingly doctor-employers now, remember?) will see audits of their billings increase as efforts to recoup some $10.5 billion of “overcoding” charges are seen as the largest source of revenue for the one-year “fix.”
  • Hospitals will also see an extension of lower Medicaid payments to hospitals that treat a high number of uninsured or low-income beneficiaries, known as “disproportionate share hospitals” to find savings of about $4.2 billion.
  • Another $4.9 billion offset will be applied to the lowered bundled payments given for patients with end-stage renal disease – some of the sickest people receiving services from Medicare.

  • Also another $1.8 billion will be “saved” to offset the “fix” by reducing payments for multiple procedures that are performed on the same day with patients.  Look for more ICD-9 (or ICD-10) code changes for the new year.
  • Also, look for an even greater crackdown on imaging studies as another $800 million has to be found to pay for the “fix.”
  • And there’s more: the complete list of payments for the “fix,” drawn almost exclusively from health care alone, can be found here.
  • Finally, doctors can expect revenue to stay flat result of this “fix” from Medicare, meaning that the payments received will not address costs imposed by annual inflation.  (You well-paid primary care doctors, are you listening?)

So you see, the “doc fix” is in for another year alright …

… one that is assured to get even harder to really fix next year.

Westby G. Fisher, MD, (aka Dr. Wes) is a board certified internist, cardiologist and cardiac electrophysiologist practicing at NorthShore University HealthSystem in Evanston, IL. He is also a Clinical Associate Professor of Medicine at the University of Chicago’s Pritzker School of Medicine. He blogs at Dr.Wes, where this post originally appeared.

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pardeep ranaMargalit Gur-ArieDeterminedMDrbaerSJ Motew, MD Recent comment authors
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Bob Hertz
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Bob Hertz

Peter, you have a point there.

All I was getting it is that if Medicare adopts a sensible policy on deductibles, then seniors with no money will put off going to the doctor.

(the way they all used to before 1965)

Rather than cobble together Medicare and Medicaid, we could just give the poorest seniors a voucher for the deductible. Rather like medical food stamps.

bob hertz
Guest

Let me drag in my old point once again.

Why does Medicare pay for any office visits at all?

That would clear up the entire doc fix and would clear up one big part of upcoding.

Raise the Medicare deductible to $500, like tonight.

Poor seniors would need a clearer access to Medicaid.

That is not an impossible task.

If some middle income seniors are still left out, give them a $1000 debit card.

20 million seniors with a $1000 debit card is just $20 billion a year.
That equals ONE MONTH of current part B spending.

bob hertz

Peter1
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Peter1

“Poor seniors would need a clearer access to Medicaid.”

Which pays less than Medicare. Why do you want to continue with a fractured health care system? Why would poor seniors deserve less treatment than the rest? There is only one set of providers to access.

Barry Carol
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Barry Carol

Margalit – More and more doctors are being paid on a salaried basis which I think is a good thing, at least in theory. Unfortunately, too many salaried docs employed by hospitals or large physician practices get bonus compensation tied to relative value units billed as a way to ensure some reasonable level of “productivity.” Kaiser and Mayo, to their credit, don’t compensate this way. However, there are probably a lot of doctors who can’t or won’t function very well in a collegial team oriented environment. Too many hospitals today see PCP doctors on their payroll as money losers for… Read more »

Margalit Gur-Arie
Guest

Barry, Kaiser is also a payer. Productivity is not helpful to payers. I don’t know enough about Mayo to comment. I don’t have a problem with salaries per se, but more with the nature of the employer…. As to hospitals, these PCPs they are buying are bought precisely to lock-in referrals. They are not money losers. They are loss leaders by design. It’s all about maximizing revenue. and that “collegial team oriented environment” is largely fantasy. People can be collegial nowadays without being employed by a semi-monopolistic entity. This is pretty long, so you may not have the patience to… Read more »

rbaer
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rbaer

Maragalit, There are a lot of great PCPs handling complex patients and re. the statement you find objectionable, I wrote “many” and not even “most” or “all”. Re. the reimbursement issue: you are right (I see a lot of poor referrals that are done in the context of 10 min ecounters), but I wonder whether these PCPs would have the option to increase coding based on complexity and/or time. Another thing that we should consider doing would be a simple summary of benefits letter that explains what a provider did in one encounter, how much it costs and how much… Read more »

Margalit Gur-Arie
Guest

Point taken, rbaer. Just wanted to say that the coding game is complicated and it is much easier to bill for two or three simple visits than one complex. I am starting to see 10 minutes time slots for regular visits. A couple of years ago 15 minutes was the most common minimum for an f/u. It’s just getting worse….

rbaer
Guest
rbaer

I like Barry’s summary but I think one could save a lot of money and harm by taking away detrimental financial incentives created by the reimbursement system. Pay surgery only a little better than seeing office or hospital consults and all these useless tonsillectomies, hysterectomies, stents and back surgeries will greatly decrease. Educate the population that more care is not always better – often useless and not infrequently harmful. If physicians would – as a rule, many but not most do – practice rational medicine (and yes, the litigational threat is real)and had a more representative association than the AMA,… Read more »

Margalit Gur-Arie
Guest

rbaer, I know quite a few PCPs who would take issue with your assessment of their abilities and their actual practice.
Unfortunately, I also know PCPs that do refer out quite a bit. The reason for that is not usually inability to treat patients, but the simple fact that payments are not really reflective of complexity and time required to treat these conditions. Changing the payment model should address this problem.

Barry Carol
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Barry Carol

Peter1 – As we’ve discussed before, I wonder if most people have any idea how much in taxes they would have to pay to support a single payer health insurance system. My best guess is at least 15% of income for most middle class and upper middle class people and it could easily be closer to 20% even with current Medicare level dictated prices. Lots of people with good employer coverage are already paying that implicitly but don’t know it. They perceive their health insurance coverage, beyond their own relatively modest contribution, as largely “free.” Maybe they think all we… Read more »

Peter1
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Peter1

Barry, the present system shields the populace from the reality of cost/benefit. Tax free employer subsidized coverage or debt subsidized Medicare. Paying the true amount would put pressure on heath care to control costs.

That’s one reason we can’t make ant headway on cost control, Americans are living in a fairy tale.

Margalit Gur-Arie
Guest

Yes, taxes should go up significantly, but so should wages assuming employers don’t unanimously decide to “soak” the workers…..
And if we can reduce costs by creating a unified payment system, than most people should be better off than what they are today, and have peace of mind on top of it.

Barry Carol
Guest
Barry Carol

Bob – The most recent data I remember seeing about the VA is that it serves roughly 5 million veterans. Since its capacity is limited, the VA divides veterans into eight different groups for the purpose of determining eligibility for VA care. Group 1 (highest priority) are those with service connected disabilities usually as a result of combat. At the other extreme, Group 8, are those with no service connected medical issues and with income above a middle class threshold. Due to this ranking system, there are many veterans that are denied access to the VA system due to capacity… Read more »

bob hertz
Guest

Barry has some great points, especially when he admits that there is no silver bullet. Cost control is a long-term, grinding process, and this is true in every advanced country including Canada and Sweden and Denmark and any others that are supposed to be more efficient than the USA. To Legacyflyer — my point about the VA hospital is that their nurses and doctors are already on the government payroll, and their hospitals do not have mortgages and bonds that need to be serviced with large payments. Therefore, if the VA hospital has an empty bed — and some of… Read more »

Margalit Gur-Arie
Guest

Great summary Barry and lots of good ideas. I don’t know what the left wants, particularly if that left is represented by the current administration, which in my opinion, is erring on several counts. I don’t want to “squeeze provider payments”. I don’t want to have “providers” at all. And I don’t want to have “ethics committees” or regulations imposed on the actual practice of medicine. I want the medical profession to stand up and take charge of medicine, one doctor at a time. I want to have doctors, not providers of I don’t know what. In the Hopkins case,… Read more »

Peter1
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Peter1

“And every 2 to 4 years we can argue about the budget and then vote. Not old against young, or poor against rich or vice versa, but all of us in the same boat”

That’s a single pay system for all supported by taxes using community owned hospitals. Anything else pits constituencies against each other and divides income groups.

If you need to use the same facility as everyone else then you’ll want to have some ownership in how it’s run.

Barry Carol
Guest
Barry Carol

It seems to me that the debate between the left and the right around healthcare cost containment can be summarized as follows: The left wants to continue to squeeze provider payments further. Some want a single payer system or one size fits all Medicare for everyone. Impose global budgets to force providers to become more efficient. More conservative folks like me want to change both the provider culture and the culture of often unreasonable patient expectations to reduce wasteful spending on unnecessary or inappropriate care. Neither Medicare nor Medicaid has a successful track record in controlling healthcare costs or utilization.… Read more »

pardeep rana
Guest

i like this topic.

bob hertz
Guest

When a patient on Medicare is going to be in an ICU for a long time, why not transfer them to a VA hospital — which is in fact already paid for in existing federal budgets? There will be the usual squabbles about how to charge this off, and some patients cannot be transported, but in many cases this would work. Again this would not be popular, because the nearest large VA hospital might be 300 miles away from the patient’s immediate family. Someone made the perceptive comment a few posts ago that I had better not be planning to… Read more »

legacyflyer
Guest
legacyflyer

“When a patient on Medicare is going to be in an ICU for a long time, why not transfer them to a VA hospital — which is in fact already paid for in existing federal budgets?”

Oh and it won’t cost anything to take care of all these extra patients ???????

Barry Carol
Guest
Barry Carol

“Why didn’t the John Hopkins docs put an end to the madness? Surely nobody can force them to harm a patient?” Margalit – Hopkins was afraid that they would be sued if they didn’t accede to the family’s wishes. Doctors tried as diplomatically as possible to explain to the family that the patient had a zero chance to recover and resume anything resembling a normal life. At one point, the family specifically suggested that they thought Hopkins wanted to stop treatment to save money while the doctors insisted that cost was not a factor in their treatment recommendation. I’ve suggested… Read more »

legacyflyer
Guest
legacyflyer

Margalit, “This luxury” doesn’t cost a little money, it cost a LOT of money. And I would not even squabble if I thought that the PATIENT wanted all this stuff done. But in many cases, the patient has no voice and what is being done is being done to assuage the guilt of family members who have no real idea of what the patient is going through and what the real chance of success is. There was an excellent article approx 6 months age, in the Wall St. Journal about the last months of an extraordinarily expensive Medicare patient at… Read more »

Margalit Gur-Arie
Guest

I agree with everything you wrote, although the magnitude and horror of each occurrence may be deceiving… I don’t really know….. Patients should decide if they can, and if the family acts insanely and decides to torture the old man, the primary care doctor with whom he should have had a long term relationship should be the next best thing, but people are less likely to have a trusted doctor nowadays and the way things are advancing, people are actively discouraged from trusting doctors. So we’re left with accountants to decide…. I don’t like it…. Why didn’t the John Hopkins… Read more »

Margalit Gur-Arie
Guest

Barry, I agree with legacyflyer regarding the living wills. It’s one thing to theoretically decide and another thing to decide in the moment. I for one have no desire to tell people how they should die, or how they should live for that matter. And if this luxury costs a little money, so be it. There must be some less ethically troubled places to save money, so why attempt to walk through the thickest part of the wall? If Dr. Emanuel who is not shy about rationing does not perceive this as a major problem, I am certainly not going… Read more »