IOM Testimony

Eliminate Failing Geographic Adjustment Factors in Favor of Primary Care Incentives, Says AAFP President

January 26, 2011 05:30 pm James Arvantes Washington –

During testimony(www.iom.edu) before an Institute of Medicine, or IOM, committee on Jan. 20, AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas, called for the elimination of Medicare geographic adjustment factors in favor of a 50 percent to 60 percent permanent incentive payment for primary care physicians.

AAFP President Roland Goertz, M.D., M.B.A., tells Institute of Medicine committee members that Medicare's geographic adjustment factors have not served America and its health care needs very well.

Goertz told the Committee on Geographic Adjustment Factors in Medicare Payment that the geographic adjustment factors have not served the United States and its health care needs well. They have failed to significantly improve the level and distribution of the nation's health care workforce and its primary care recruitment and retention practices, said Goertz. In addition, the geographic adjustments have not adequately addressed problems with access to health care in rural areas or the ability of physician offices, hospitals and their facilities to maintain an adequate and skilled workforce.

"We call for a realignment of Medicare payment that reflects a more equitable payment for services provided by family physicians," said Goertz.

Goertz called for the elimination of the Medicare geographic adjustment factors in favor of a permanent bonus payment for primary care physicians. The bonus should be "large enough to make the impact you really want," he told committee members.

Although the Patient Protection and Affordable Care Act will provide a 10 percent Medicare bonus for primary care services provided by primary care physicians during the next five years, experts estimate each primary care physician will receive only about $4,000 in additional annual income. That is not enough to entice physicians into primary care, Goertz said. He suggested a permanent bonus payment of 50 percent to 60 percent for primary care physicians, which would entice more physicians into primary care, thus helping the distribution of those physicians into primary care health professional shortage areas.

Goertz also addressed Medicare payment issues as a whole, saying that the incentives built into the current system have resulted in significant income disparities between primary care and nonprimary care physicians. He noted that in 1981, the average difference in income between primary care and nonprimary care physicians was about $50,000. But now, the income gap is almost five times that amount, a differential that discourages medical students form choosing a career in primary care.

"There has been a 50 percent reduction, based on surveys of (medical) students, in their likelihood to select a primary care career based on the income variation," said Goertz. "And that has resulted in at least a 20 percent reduction in students who have any desire to practice in rural locations."

Goertz also called for a "simplified" payment model for primary care that would incorporate fee-for-service elements along with a care coordination fee and a system to reward quality of care.

"We are essentially spending a lot of time working on correcting a payment model that in the Academy's opinion should be changed to a three-part system," said Goertz.


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