By ANISH KOKA MD
Seema Verma, the Trump appointee who runs Medicare, has had an active week. The problem facing much-beloved Medicare is one that faces every other government-funded healthcare extravaganza: it’s always projected to be running out of money. Medicare makes up 15% of the total federal budget. That’s almost $600 billion dollars out of a total federal outlay of $4 Trillion dollars. The only problem here is that revenues are around $3.6 trillion. We are spending money we don’t have, and thus there there is constant pressure to reduce federal outlays.
This is a feat that appears to be legislatively impossible. The country barely is able to defund bridges to nowhere let alone try to reduce health care spending because, as everyone knows, any reduction in health care spending will spawn a death toll that would shame the black plague. The prior administration’s health policy wonk certified approach was to change the equation in health care from paying for volume to paying for value. This, we were assured, would allow us to get better healthcare for cheaper! And so we got MACRA, The Medicare Access and CHIP Reauthorization Act, that introduced penalties for doctors unable to provide ‘good’ care. Never mind that in some years good care means you treat everyone with a statin, and in others it means treat no one with a statin. When in Rome, live like the Romans. In 2018 parlance, that roughly translates to “check every box you can and everything will be all right.”
In the face of legislative paralysis, administrators have a tremendous amount of power in picking winners and losers in the healthcare landscape. The prior administration, fueled by New Yorker articles that spoke of academic medical centers filled with virtuous cardiologists doing preoperative evaluations for free, set up a system that made winners of large health systems. Reimbursement for office work was slashed, and rewards were put in play for documenting value-based care that were best accessed by performance improvement departments. A wave of consolidation followed. Hospitals merged, and office practices found safe harbor by becoming hospital practices overnight. Medicare noticed. They were paying more for the same services if beneficiaries ended up at hospital owned clinics. As a result, the Medicare Payment Advisory Commission (MEDPAC) would recommend equalizing payments between free-standing office practices and hospital-based outpatient practices. And every year CMS administrators failed to act. The politics of moving against hospitals was apparently untenable for many.
That was until Seema Verma came on the scene. On November 2 via tweet, the announcement finally came:
Today, @CMSGov released the final Outpatient Prospective Payment System & Ambulatory Surgical Center Payment System rule that ensures beneficiaries can access the care they need, at the site of care that is best for them. #StrengtheningMedicare https://t.co/0RYSW6pe94 pic.twitter.com/p1VaNRbrz5— Administrator Seema Verma (@SeemaCMS) November 2, 2018
The cheering that followed the announcement came from independent physicians under constant pressure from reimbursement rich hospitals. It was good news following a lump of coal delivered to physicians by the same Seema Verma days earlier by collapsing three commonly used office billing codes for evaluation and management into one code.
This particular move was cast primarily as a move to reduce the documentation burden for physicians and address physician burnout. The reality is that the surviving independent physicians that hadn’t opted out of Medicare survived in part by using their electronic medical record to generate templated notes that were audit-proof level 4 billing machines. It’s a cat and mouse game that has been going on since the inception of Medicare.
A closer look reveals these moves to be far less bold than advertised. Collapsing Evaluation and Management (E&M) billing codes and site-neutral payments are small potatoes. The E&M code changes don’t take effect until 2021, and the reduction in payment for even those mostly billing level 4 codes is $19-$37 per patient. That’s not an insignificant amount, but it’s also not an amount that is back-breaking. The same holds true for site-neutral payments and their effects on hospitals. The policy doesn’t cover procedures done in the outpatient setting — only E&M payments — and the average cut applied to the hospital setting amounts to about $30 per patient as well. Medicare stands to save ~ $380 million dollars in this move. This only sounds like a lot of money if you didn’t know that total Medicare spending in 2016 was $672 billion.
Nonetheless, this is some major action by a Trump appointee that comes on the heels of a number of other policy pronouncements related to drug pricing that could easily have been made by a Clinton appointee. It took Seema Verma to take on doctors and hospitals in a way her predecessors did or could not. E&M documentation changes have not been made since 1997, and MedPac’s recommendation on site neutral payments have been steadfastly ignored year after year. One would think the health policy world would applaud these moves, but after four days Seema Verma’s site-neutral tweet has ten retweets. Meanwhile, Atul Gawande tweeting 5 years too late that Epic sucks goes viral.
It reveals major foundational issues with health policy that the self-proclaimed objective/neutral/empiricists are really a group of brittle partisans that are either too biased or too scared to applaud Verma’s moves. This performance stands in stark contrast to the grave pronouncements of what would happen to the nation’s health after the devastating election of 2016. While these policies do little for those seeking to overturn the current system, as symbolic gestures, they send a hopeful message that the balance of power in the healthcare landscape may be shifting.
Anish Koka is a Cardiologist in private practice in Philadelphia. Follow him on twitter @anish_koka.