The Medicare Payment Advisory Commission will call on Congress to implement a 2.8 percent increase in physician payment for 2007. The recommendation is part of MedPAC's 2006 report to Congress, to be submitted March 1.
MedPAC Urges 2.8 Percent Rise in 2007 Medicare Payment
By Leslie Champlin
1/24/2006
In effect, the MedPAC report will urge Congress to override provisions of the Balanced Budget Act of 1997, which requires use of the sustainable growth rate to calculate the Medicare payment formula. Unfettered, use of the SGR formula would result in an automatic Medicare pay cut of 4.6 percent in 2007.
MedPAC has consistently called on Congress to scrap the SGR formula in favor of a formula that accounts for the cost of providing care. The Deficit Reduction Act of 2005, which will freeze Medicare physician payments at 2005 levels when passed by the House and signed by President Bush, requires MedPAC to formally look at the SGR formula and make recommendations for changing it or replacing it with another payment system.
In the meantime, MedPAC said Congress should override the SGR and implement the 2.8 percent pay increase. Commissioners also recommended formation of an advisory board to help identify over- or undervalued payment codes that merit review. MedPAC commissioners expressed concern that evaluation and management codes had become undervalued as the payment system was flooded with new codes for novel procedures and tests. Over time, such undervaluation has affected the primary care physician workforce, and it bodes ill for future access to primary care, the commissioners said.
"One of the reasons we took this topic up was concern that was raised … about the passive devaluation of E&M services and the impact that that is already having … on physician manpower, particularly the flow of young physicians into primary care services," said Francis Crosson, M.D., a MedPAC commissioner, during December hearings.
Physicians who provide primary care have not seen an increase in income despite an increase in spending on E&M codes, according to William Rich, M.D., chair of the Relative Value Scale Update Committee, who testified before MedPAC in December.
"We have not seen the increases in income because they are fixed, they are time-based codes with strict evaluation and management guidelines," said Rich. "Family doctors and osteopaths in general cannot increase their throughput. I can do it as an ophthalmologist by moving my cataracts from a slow outpatient department in a hospital to an ambulatory surgery center and double my productivity without increasing the rate per 100,000 beneficiaries," but primary care physicians cannot do that.
Commissioners predicted that findings of a national study by the Center for Studying Health System Change -- which found that physicians continue to accept new Medicare patients despite recent pay cuts -- would not hold for long unless E&M codes were reviewed and improved.
"Your staff work on access for new patients shows that there is great access for a new patient to a specialist, but not quite as good for primary care," said John Bertko, a MedPAC commissioner, at the December hearings. "I support … comments about having longer term incentives to make sure primary care physicians are available to this population."
He pointed to evidence that "when someone goes to a specialist, they generally ring up a greater series of tests, procedures and higher-cost procedures than if they had adequate treatment from a primary care (physician)."
The commissioner's position supports that taken by AAFP President Larry Fields, M.D., of Ashland, Ky., who called on Congress to permanently fix the formula this year.
"That is their responsibility to our patients and to America's family doctors who are continuing to stand at our patients' sides, no matter the difficulties placed in our way," said Fields.
MedPAC has consistently called on Congress to scrap the SGR formula in favor of a formula that accounts for the cost of providing care. The Deficit Reduction Act of 2005, which will freeze Medicare physician payments at 2005 levels when passed by the House and signed by President Bush, requires MedPAC to formally look at the SGR formula and make recommendations for changing it or replacing it with another payment system.
In the meantime, MedPAC said Congress should override the SGR and implement the 2.8 percent pay increase. Commissioners also recommended formation of an advisory board to help identify over- or undervalued payment codes that merit review. MedPAC commissioners expressed concern that evaluation and management codes had become undervalued as the payment system was flooded with new codes for novel procedures and tests. Over time, such undervaluation has affected the primary care physician workforce, and it bodes ill for future access to primary care, the commissioners said.
"One of the reasons we took this topic up was concern that was raised … about the passive devaluation of E&M services and the impact that that is already having … on physician manpower, particularly the flow of young physicians into primary care services," said Francis Crosson, M.D., a MedPAC commissioner, during December hearings.
Physicians who provide primary care have not seen an increase in income despite an increase in spending on E&M codes, according to William Rich, M.D., chair of the Relative Value Scale Update Committee, who testified before MedPAC in December.
"We have not seen the increases in income because they are fixed, they are time-based codes with strict evaluation and management guidelines," said Rich. "Family doctors and osteopaths in general cannot increase their throughput. I can do it as an ophthalmologist by moving my cataracts from a slow outpatient department in a hospital to an ambulatory surgery center and double my productivity without increasing the rate per 100,000 beneficiaries," but primary care physicians cannot do that.
Commissioners predicted that findings of a national study by the Center for Studying Health System Change -- which found that physicians continue to accept new Medicare patients despite recent pay cuts -- would not hold for long unless E&M codes were reviewed and improved.
"Your staff work on access for new patients shows that there is great access for a new patient to a specialist, but not quite as good for primary care," said John Bertko, a MedPAC commissioner, at the December hearings. "I support … comments about having longer term incentives to make sure primary care physicians are available to this population."
He pointed to evidence that "when someone goes to a specialist, they generally ring up a greater series of tests, procedures and higher-cost procedures than if they had adequate treatment from a primary care (physician)."
The commissioner's position supports that taken by AAFP President Larry Fields, M.D., of Ashland, Ky., who called on Congress to permanently fix the formula this year.
"That is their responsibility to our patients and to America's family doctors who are continuing to stand at our patients' sides, no matter the difficulties placed in our way," said Fields.
