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Statement to the Ways and Means Health Subcommittee on Pay for Performance in Medicare
July 20, 2005
AAFP currently has over 57,000 members in active practice, the vast majority of whom are in small and medium size practices, not large groups. We anticipate that this will be the typical construct of family medicine well into the future. Most people in this country receive the majority of their care from physicians in small and medium size ambulatory care settings. Currently about a quarter of all office visits in the U.S are to family physicians, and the average family practice has about a quarter of patients who are Medicare beneficiaries. Implementing value based purchasing or pay for performance in the Medicare program has tremendous implications for millions of patients and for the specialty of family medicine, and AAFP is therefore committed to involvement in the design of a new pay-for-performance program that meets the needs of patients and physicians.
Physicians and Pay for Performance
AAFP is involved in several efforts that are fundamental to moving toward a pay for performance system.
First of all, we know that the development of valid, evidence-based performance measures is imperative for a successful program to improve health quality. The AAFP participates actively in the development of performance measures through the Physician Consortium for Performance Improvement. We believe that multi-specialty collaboration in the development of evidence-based performance measures through the consortium has yielded and will continue to yield valid measures for quality improvement and ultimately pay for performance.
The AAFP was the first medical specialty society to join the National Quality Forum (NQF). And along with ACP, AHIP and AHRQ, the AAFP is a founding organization of the Ambulatory care Quality Alliance (AQA). However, it is important to distinguish between the role of the NQF and that of AQA. With its multi-stakeholder involvement and its explicit consensus process, the NQF provides essential credibility to the measures that it approves – measures developed by the Physician Consortium, NCQA and others. The AQA’s purpose is to determine which of the measures approved through the NQF consensus process should be implemented initially (the starter set), and which should then be added so that there is a complete set of measures, including those relating to efficiency, sub-specialty performance, and patient experience. Having a single set of measures that can be reported by a practice to different health plans with which the practice is contracted is critical to reducing the reporting costs borne by medical practices. Measures that ultimately are utilized in a Medicare pay-for-performance program should follow this path.
Information Technology in the Office Setting
We also know that cost can be a barrier to IT adoption and have worked aggressively with the vendor community through our Partners for Patients Program to lower the price point. The AAFP’s Executive Vice President serves on the Certification Commission for Health Information Technology (CCHIT) which certifies EHRs. The AAFP sponsored the development of the Continuity of Care Record standard, now successfully balloted through the American Society for Testing and Materials (ASTM). We initiated the Physician EHR Coalition, now jointly chaired by ACP and AAFP, to engage a broad base of medical specialties to advance EHR adoption in small and medium size ambulatory care practices. Our Board of Directors has set an ambitious goal of having 50 percent of family physicians using EHRs by the end of 2005. We are committing our organizational resources to assist our members achieve this goal.
The AAFP quality initiatives span efforts to emphasize measures like quality improvement, office redesign, and integration of the chronic care model. Here are two examples. Through our Practice Enhancement Program, teams of physicians and their office staff participate in an intense educational experience accompanied with pre and post course work to acquire the practical tools, skills and knowledge to implement the planned care model into their everyday practices. Through the web-based METRIC (Measuring, Evaluating and Translating Research into Care) program, family physicians assess their systems in practice, review charts and enter patient data, receive feedback on their performance, implement a quality improvement plan, re-measure and reassess. Two module topics currently are available: diabetes and coronary artery disease.
The AAFP takes seriously the responsibility to work with our members to continuously improve their clinical care and office infrastructure to better meet the needs of their patients.
Current Payment Environment
Our consistent message to Congress is that if it is not done well, a value-based purchasing program will not only fail to improve health care quality but could unravel the preparation and progress that medical specialty societies have carefully undertaken.
“Doing it well” means phasing in a value-based purchasing program that provides incentives for structural and system changes, that encourages reporting of data on performance measures and ultimately rewards continual improvements in clinical performance. Yet, moving the Medicare program in this direction cannot be accomplished in an environment of declining physician payment; Congress must take steps to stabilize physician payment through positive updates, as proposed by MedPAC. Furthermore, because of its financing structure with Part A and Part B, we believe it is important that Congress require a report on Medicare program savings resulting from Part B quality improvement efforts so that physicians are not penalized into the future.
A Framework for Pay for Performance
All physicians would receive a positive update in 2006, based on recommendations of MedPAC, reversing the projected 4.3-percent reduction. Congress should establish a floor for such updates in subsequent years.
Following completion of development of reporting mechanisms and specifications, Medicare would encourage structural and system changes in practice, such as electronic health records and registries, through a “pay for reporting” incentive system such that physicians could improve their capacity to deliver quality care. The update floor would apply to all physicians.
Assuming that physicians have the ability to do so, Medicare would encourage reporting of data on evidence-based performance measures that have been appropriately vetted through mechanisms such as the National Quality Forum and the Ambulatory Care Quality Alliance. During this phase, physicians would receive “pay for reporting” incentives; these would be based on the reporting of data, not on the outcomes achieved. The update floor would apply to all physicians.
Contingent on repeal of the SGR formula and development of a long term solution allowing for annual payment updates linked to inflation plus funds to provide incentives through pay for performance programs, Medicare would encourage continuous improvement in the quality of care through incentive payments to physicians for demonstrated improvements in outcomes and processes, using evidence-based measures such as the provision of preventive services, performing HbA1c screening and control, prescribing aspirin to diabetics, etc. The update floor would apply to all physicians.
This sort of phased-in approach is crucial for appropriate implementation. While there is general agreement that initial incentives should foster structural and system improvements in practice, decisions about such structural measures, their reporting, threshold for rewards, etc. remain to be determined. The issues surrounding collection and reporting of data on clinical measures are also complex. For example, do incentives accrue to the individual physician or to the entire practice, regardless of size? In a health care system where patients see multiple physicians, to which physician are improvements attributed?
The program must provide incentives – not punishment – to encourage continuous quality improvement. For example, physicians are being asked to bear the costs of acquiring and using health information technology in their offices, with benefits accruing across the health care system – to patients, payors, insurance plans, etc. Appropriate incentives must be explicitly integrated into a Medicare pay-for-performance program if we are to achieve the level of infrastructure at the medical practice to support collection and reporting of data.
The AAFP appreciates the opportunity to share our enthusiasm for, yet caution about, a Medicare pay-for-performance program.
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AAFP Comments on ABN - Federal Register May 2007 (*PDF file)
AAFP Comments on ABN - June 2007 (*PDF file)