MedPAC Considers Recommending 1.1 Percent Physician Payment Increase for 2010

The Medicare Payment Advisory Commission, or MedPAC, is considering adopting a recommendation that would call for a 1.1 percent increase in physician payment rates in 2010.

MedPAC, which advises Congress on physician payment rates and other issues, said the possible recommendation is based on an expected 2.4 percent increase in the inflation rate and a 1.3 percent productivity growth offset. If approved by Congress, the 1.1 percent increase would avert deep reductions in physician payment rates that are projected to take place under the sustainable growth rate formula. Physicians already are scheduled to receive a 1.1 percent payment increase in 2009.

MedPAC, which met here on Dec. 4, also plans to reissue a recommendation it made in its June 2008 report (288-page PDF; About PDFs) calling on Congress to increase payments for primary care services furnished by health professionals who focus on primary care, said Cristina Boccuti, M.P.P., a senior MedPAC analyst.

The recommendation does not specify how large an increase primary care health professionals should receive, but it could be based on either the 10 percent bonus Medicare pays to physicians working in designated health professional shortage areas or the 5 percent bonus paid to providers in physician scarcity areas, according to Kevin Hayes, Ph.D., principle policy analyst for MedPAC, who presented the proposal to MedPAC commissioners in April.

MedPAC proposes to pay for the recommendation by establishing a "budget neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary care-focused practitioners," according to the text of the proposal. To maintain budget neutrality, the proposal would take money from subspecialty services to pay for the increase for primary care services.

Glenn Hackbarth, J.D., chair of MedPAC, said the during the Dec. 4 meeting that "productivity opportunities are not uniform across physician practices. In fact, subspecialties seem to have a greater ability to increase their volume for a variety of different reasons compared to primary care."

To remedy the inequity, Hackbarth called for increasing the relative payment for primary care services compared to "high-volume (sub)specialties."

"If you increase (payment) across the board for everybody, then high-volume people who are generating all these (services) and making tons of money on Medicare are going to get the same increase," he said.

The AAFP has taken a stance (Members Only) that any payment increases for primary care services need to come from all Medicare programs and not just from Medicare Part B.