A U.S. House subcommittee will hold a hearing July 21 on reforming physician payments under Medicare by moving to a pay-for-performance system, also known as value-based purchasing.
Rep. Nancy Johnson, R-Conn., chair of the Ways and Means Health Subcommittee, which will conduct the hearing, is expected to introduce legislation soon that would address Medicare physician payment issues. AAFP has worked with Johnson as she has been developing language for her anticipated legislation. For example, on July 14, AAFP EVP Douglas Henley, M.D., met with Madeline Smith, legislative aide to Johnson, to discuss pay-for-performance legislation.
During their discussion, Henley reiterated AAFP's position on pay-for-performance. Important to any such program, he said, is that it must be accompanied by a fix to the sustainable growth rate formula to assure an appropriate annual payment increase for all physicians.
Johnson's anticipated bill addresses the first AAFP concern. According to its provisions, Congress would abolish the SGR formula currently used to calculate Medicare physician payments. Under this formula, physicians' payments stand to be cut by more than 4 percent each year for the next seven years.
Congress would instead establish quality and efficiency standards based on changes in a federal payment level based on the Medicare Economic Index, which measures changes in the cost of delivering care.
In addition to this basic payment for all physicians, the Medicare program would offer additional payments for reporting and meeting quality improvement standards. The National Quality Forum or a similar group would review and approve quality measures and forward its recommendations to CMS for final adoption.
Doctors then would begin collecting and reporting performance data to be used to qualify them for full payment increases in 2007 and 2008. Not until 2009 would doctors need to meet quality and efficiency standards in their patient care to qualify for full payment increases.
"This hearing will offer the subcommittee an opportunity to explore further a repeal of the old formula and implementation of a value-based purchasing program based on the recent work by CMS and others," said Johnson in a statement, posted July 15, announcing the hearing.
Related activities on performance measures:
- In January, CMS launched the Physician Group Practice Demonstration, designed to encourage physician groups to coordinate care for chronically ill Medicare beneficiaries, reward efficiency in patient services, and promote use of data on efficiency and patient outcomes.
- In May, the Ambulatory care Quality Alliance, which includes the AAFP, released a recommended starter set of standards for clinical performance measures.
