Proposal to Keep Higher Primary Care Pay Heads to Congress

MedPAC Report Will Call for Per-beneficiary Payment, Other Incentives

January 19, 2015 04:18 pm Michael Laff Washington –

Members of the Medicare Payment Advisory Commission (MedPAC) voted last week to forestall a 10 percent pay cut for primary care physicians who treat Medicare patients that is slated to take effect next January. Rather than allowing a primary care bonus payment to expire at year's end, the commissioners are recommending a budget-neutral way to continue the payment, albeit in a different form.

[Female doctor looking at papperwork with senior male patient]

During their Jan. 15-16 meeting,(www.medpac.gov) commission members voted unanimously in favor of a per-beneficiary payment that would be offset by applying a 1.4 percent payment reduction to 75 percent of other physician services in the Medicare physician fee schedule. The recommendation will be included in MedPAC's March report to Congress.

For years, MedPAC commissioners have sought to rebalance the Medicare fee schedule, pointing out that primary care services have long been undervalued compared with subspecialty care services. The per-beneficiary payment will be available only to physicians who practice family medicine, general internal medicine, general pediatrics or geriatrics. The increased payments will be made for specific evaluation and management services provided during office visits, patient visits in a long-term care facility and home visits. Hospital visits are excluded from the bonus payment.

Before voting, members discussed the long-term prospects associated with the payment imbalance between primary care and other specialties and the struggle to transform medical care away from episodic treatment paid for by on a fee-for-service basis.

Story Highlights
  • The Medicare Payment Advisory Commission (MedPAC) has approved a recommendation to continue a 10 percent bonus payment for primary care physicians.
  • To maintain budget neutrality and increase the likelihood of congressional approval, the per-beneficiary payment will be paid by reducing payments for other physician services.
  • MedPAC members acknowledged that the payment is a small initial step to address imbalances in Medicare payments.

During the meeting, MedPAC Chair Glenn Hackbarth, J.D., noted that the commission's March report will, in fact, include three strong recommendations:

  • Repeal the sustainable growth rate formula used to pay Medicare physicians.
  • Rebalance Medicare payments to better value primary care.
  • Continue efforts to encourage participation in new payment models.

Hackbarth voiced his exasperation with Congress' recent decision to use billions in Medicare savings to offset costs associated with the Patient Protection and Affordable Care Act and to address the budget deficit. "Yet we never have the money to pay for an appropriate payment system for physicians," he said. "That frustrates me to no end."

On a related note, Commissioner Craig Samitt, M.D., noted that the per-beneficiary payment and other incentives -- although moves in the right direction -- do not provide enough resources for primary care practices to transition to the kinds of alternative payment models the commission and other policymakers have advocated.

"It's not a quick enough step or a significant enough step," said Samitt.

Commissioner Jay Crosson, M.D., noted the continuing increase in the number of patients in Medicare and private insurance plans who report difficulty finding a primary care physician. He and other commission members voiced concerns about the ongoing shortage of primary care physicians.

"I support the (per-beneficiary payment) recommendation, but I think it will prove inadequate to reverse the flow in medical school in terms of how students are choosing their specialties," Crosson said.

As for ways to supplement the per-beneficiary payment, Commissioner Kathy Buto, M.P.A., suggested pulling primary care out of the physician fee schedule and adding another bundled payment amount to the per-beneficiary payment. Payments for primary care services could be valued more accurately if they were measured separately from specialty care, she said.

"I've been involved with the fee schedule from the start, and there's never been a year when primary care was funded in a way that was appropriate," said Buto.

Still, commission members agreed that bonus payments likely will have limited effect on larger goals such as attracting more medical residents to primary care and shifting to alternate payment models. One commission member emphasized that the salary discrepancy addresses only part of the problem with health care payment and delivery.

"If we double the salaries of primary care physicians, we would get more people in primary care, but we would have little or no impact on the system of care that people on Medicare need," said Commissioner William Hall, M.D.

Hackbarth readily acknowledged the need for a comprehensive long-term plan. "It's important not to oversell this," he said, referring to the per-beneficiary payment. "This is a stopgap. It's small and it's not going to attract huge numbers of people to primary care.

"What we're saying is let's not go backward and let's take a step away from fee-for-service."


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