Q&A With CMS Acting Administrator Kerry Weems

When Kerry Weems was appointed acting administrator of CMS last September, the emphasis was on his financial and management background. Speculation was that Weems' appointment was a response to the financial budget crunch facing the Medicare and Medicaid programs -- a crunch that has the potential to hit family physicians hard if the 10.6 percent reduction in Medicare payments called for by the sustainable growth rate, or SGR, formula goes into effect on July 1 as scheduled.

In an attempt to find solutions to rising health care costs, CMS has stepped up its efforts in the areas of health information technology, or HIT, and quality measurement. In addition, the agency is funding a medical home demonstration project that is scheduled to begin in 2009. AAFP News Now recently sat down with Weems to talk about these new projects, how CMS views the current Medicare system and how well the system is working.

Q. The SGR attempts to align actual spending rates with specified targets to determine Medicare payment levels. During the past seven years, Medicare spending has exceeded targeted rates, triggering steep reductions in payments to physicians that have been averted only by last-minute congressional intervention. What is your opinion of the SGR formula?

A. The SGR was put into place as a means of putting physician payments on a particular trajectory as an economy measure, but because of the way things have worked out, it has not been a particularly good economy measure for physician payment. One of the disturbing things about the SGR is the amount of uncertainty that it produces in the physician community. We are certainly not in favor of that. Ultimately, the SGR is something that is going to require a permanent fix.

Q. Will CMS, to the extent that the agency is allowed to, argue for a positive update before the 10.6 percent cut scheduled for July takes effect?

A. We will support a fix in a budget-neutral way.

Q. Where would offsetting cuts have to happen to support a positive physician update?

A. We are going to work with Congress to make sure we get the right set of offsets. We proposed a fairly robust legislative package in our budget. I think that would be a good place to start.

Q. You and HHS Secretary Michael Leavitt have said the Medicare system is antiquated and needs to be revamped. What do you mean?

A. We need to pay for outcomes and not pay for piecework like we do today. And how we pay should be more market-based and not (based) on input price.

Q. If you could structure the perfect payment system to reward primary care services for the value they bring to the health care system and to individual patients, how would you structure the payment system?

A. The short answer is I probably wouldn't. I would have the market structure it. The flaw in our system is we use input-based pricing that favors (sub)specialties rather than primary care. I think if you left it to the people to vote with their dollars, then primary care would be more highly reimbursed than it is now.

Q. What would that payment model look like?

A. It would look like what the market wants it to look like. Right now, so many decisions are driven either by the distortions that the payment system induces or by people and their behavior around whatever insurance products they have. The market would determine this, and I am of the pretty strong belief that it would favor primary care more than (sub)specialty care.

Q. CMS is planning to fund a three-year medical home demonstration project in eight states in 2009 that will pay participating practices a care-coordination fee for managing chronic diseases. What do you think of the patient-centered medical home as a concept?

A. As a concept, I think it is a good idea. It is something I am excited about and something I think we can learn a lot from.

Q. Learn in terms of care coordination?

A. The whole range of things. Care coordination and how we might reimburse for that.

Q. In March 2007, CMS established the Physician Quality Reporting Initiative, or PQRI, a program that pays Medicare physicians a 0.5 percent bonus for reporting on 74 performance measures. What is CMS' appraisal of the PQRI?

A. I think so far, so good. We have seen participation at pretty good rates. We have corresponded with Congress -- specifically, the Senate Finance Committee -- about what our next steps are and how we can make some improvements, but I would say we are generally satisfied.

Q. CMS is launching a five-year Medicare demonstration project to provide incentive payments to small and medium-sized physician practices that use certified electronic health records, or EHRs, to improve care. The agency plans to provide payments to as many as 1,200 physician practices at 12 sites throughout the country during the next five years. What role do you see for quality improvement?

A. We see a very big and robust role for quality improvement. We have laid out, in a number of settings, kind of a roadmap for quality for primary care physicians. The PQRI is an excellent example of where we have stepped out, but ultimately, I think what we need is a strategic plan or a quality map that tells physicians, tells other practitioners, where we are going to be going in the quality area over the next five years.

Q. What role should HIT play in physician practices?

A. The thing that we need to keep reminding ourselves about HIT is that it is an enabler. It is a means; it is not an end. The end is higher-quality care. Really, that is the role I see HIT playing in physician practices -- giving them the ability to provide higher-quality care, especially if there is a reduction in the administrative burden, and being about spending more time with the patient.

Q. As you know, EHR systems are expensive, especially for small to medium-sized practices. Do you have any recommendations for helping these practices get the financing needed to help them buy EHR systems or obtain relatively inexpensive systems?

A. It is interesting that in my travels around the nation, talking about this, some states are actually offering solutions to physicians. Physicians should look at this as they would any other investment. There is some evidence to suggest that just in workflow and administrative costs, there is a payback for physicians who are adopting an EHR.

Q. What would you tell a medical student who is considering a career in family medicine?

A. I would tell them they are considering a career in a very noble calling. It is a career that has many, many rewards, and they should be prepared to spend a lot of time advocating for what they do.