Bush Proposal to Slow Medicare Spending Could Hurt FPs

The Bush administration, seeking to slow projected growth in Medicare spending, has proposed an initiative that could make it more difficult for family physicians to receive payment for meeting quality and efficiency standards, according to an analysis conducted by the AAFP.

The Medicare Funding Warning Response Act of 2008 (6-page PDF; About PDFs) would require HHS to develop a plan to ensure that at least 50 percent of the care provided by Medicare would be covered by value-based or pay-for-performance measures by 2013. That move could saddle family physicians with much of the cost of meeting the requirement because many of the performance measures apply to primary care, said Kevin Burke, director of the AAFP's Division of Government Relations.

Under the proposal, the federal government also could withhold a portion of payments to physicians based on their ability to meet quality and efficiency standards, forcing them to compete for limited payments, Burke said. Moreover, certain quality-related provisions, such as those dealing with electronic health records, pricing transparency and value-based purchasing, would not be implemented unless they saved money.

"The administration is not really putting the focus on better health care, but on cheaper health care," said Burke. "This proposal is chiefly a budget device, not a health care reform device."

The administration sent the proposal to Congress as part of the Medicare funding "trigger," which requires the president to propose legislation to slow the growth of Medicare if, for two years in a row, Medicare costs are projected to consume 45 percent or more of general revenues in any of the following six years.

"We are approaching an emergency here," said HHS Secretary Michael Leavitt during a press conference in early February. "Real change is necessary in the Medicare system, and it is required soon."

Congress, which is required by law to respond to the administration's measure, introduced the act in both the House and the Senate on Feb. 25, but it is widely expected that both chambers will modify the measure substantially.

The proposal does contain some measures that the AAFP supports. For example, it proposes a $250,000 cap on noneconomic damages for medical lawsuits and would limit the share of damages plaintiffs' attorneys can collect. It also encourages the use of "interoperable" electronic health records instead of just calling for electronic prescribing.

In addition, the measure proposes authorizing HHS to publicize price and cost information so Medicare beneficiaries can make informed choices about providers, plans and treatment options, a proposal endorsed by the AAFP.