2013: Year in Review

Fix for SGR Formula, Other Payment Issues Top AAFP's Advocacy Checklist

January 02, 2014 05:58 pm News Staff

The new year brings with it good news regarding a possible fix to the sustainable growth rate (SGR) formula that has plagued family physicians for the past decade, but as 2013 began, FPs held out little hope that Congress could get its act together and actually do something about Medicare payment reform.

AAFP President Jeff Cain, M.D., right, discusses Medicare payment policies with Rep. Joe Heck, D.O., R-Nev., co-sponsor of a Medicare reform bill, shortly after a congressional briefing announcing reintroduction of the legislation.

In fact, at the start of 2013, physicians were once again looking at a temporary payment patch that would replace a 26.5 percent cut with a one-year freeze in payment, a solution that (then) AAFP Board Chair Glen Stream, M.D., M.B.I., of Spokane Wash., called a relief but no resolution to the ongoing problem. "The current system, with its deeply flawed sustainable growth rate formula, generates an annual, semiannual, sometimes monthly crisis of confidence among elderly and disabled Medicare patients and their physicians," said Stream in a press release regarding the announcement. The AAFP once again renewed its call for a permanent fix to the SGR.

In addition to the annual SGR formula fiasco, physicians also faced a 2 percent cut in payments because of the sequestration deal called for in the Budget Control Act. Sequestration also called for cuts in discretionary funding for vital medical education programs. Vigorous protests by the AAFP and other organizations only delayed the cuts, leaving FPs facing a payment cut as of April 1.

Delivering Parity

At the same time, a program that promised to pay physicians more for seeing Medicaid patients for certain primary care services was slow to get underway.

The Medicare-Medicaid parity program was intended to bring Medicaid payments at least up to the same level as Medicare rates in 2013 and 2014. However, by the middle of 2013, many states were just getting their programs off the ground.

The delayed launch of the program led the AAFP and other organizations to call for an extension for at least an additional two years. "The extension is particularly important because its slow startup -- with many states only now beginning to pay at the higher Medicare rates -- combined with a lack of assurance that it will be extended beyond 2014 has not allowed an adequate enough time to demonstrate the program's effectiveness in improving access," said a November coalition letter from the AAFP(3 page PDF) and several other primary care organizations.

[Knife cutting through stack of $2 bills]

Fixing the SGR

As 2013 got underway, the promise to fix the SGR finally seemed possible. A flurry of bills to repeal and/or revise the formula were introduced, and lower growth than expected in Medicare health care costs led the Congressional Budget Office to revise its estimated cost to fix the SGR downward by $107 billion, leading to what some called a "fire sale" opportunity to fix the payment system.

An initial draft proposal from the House Ways and Means and Energy and Commerce committees was closely scrutinized by the AAFP.  As proposed, the draft would have repealed the SGR and taken steps to move from a volume-based to a value-based Medicare payment system.

In a letter to the chairs of the two House committees(404 KB PDF), Stream took issue with the use of performance measures as a sole means of improving care, saying, "It is our experience that performance measures can be used to improve targeted areas of health care delivery, but quality improvement is more complicated and more individual than can be reflected in performance measures alone.

"Therefore, while we agree that pay-for-performance should be included in payment reform, we understand that it alone is not sufficient to lead to general improvement in quality. Payment reform needs to include revisions to fee-for-service, especially higher payment rates for primary care and payment for the coordination of care."

The Academy was more supportive of a bipartisan bill reintroduced in the House by Reps. Allyson Schwartz, D-Pa., and Joseph Heck, D.O., R-Nev. The bill would have left in place 2013 Medicare payment levels through the end of 2014, and then would have provided annual updates of 0.5 percent for all physician services for the succeeding four years and a 2.5 percent increase in payments for primary care physicians during the same time period to address the undervaluation of primary care services.

As the year progressed, both the Senate and House continued to tinker with SGR reform, and AAFP members kept up their grassroots outreach to ensure primary care wasn't overlooked in any final proposal. The AAFP also provided advice to both the House and Senate on how to structure legislation to revise the Medicare payment system.

In a May letter to the Senate Finance Committee, Stream urged Congress to adopt a payment system that would include a new category of evaluation and management codes to reflect the intensity and complexity of primary care office visits. Stream also urged Congress to encourage the adoption of the patient-centered medical home (PCMH) model by paying PCMH practices a per-patient, per-month fee to support the management and coordination of patient care inside and outside of the office setting.

"When health care delivery is built on a strong foundation of primary care, efficiency and quality are high," said Stream. "However, a system that pays for health care based only on services provided fosters inefficiency through fragmentation, which can threaten quality as well."

Finally, in early November, the House and Senate released a bipartisan draft proposal that would repeal the broken SGR formula and replace it with alternative payment models more aligned with quality of care, including the PCMH model and accountable care organizations.

The proposal's emphasis on reforming the fee-for-service payment system in favor of a more quality-oriented approach supports a health care system built on a foundation of primary care, said the AAFP in a media statement.

Although the AAFP was concerned that the proposal would freeze fee-for-service payment rates for Medicare for 10 years (2014-2023), physicians participating in alternative payment models, including the PCMH, could receive bonuses of as much as 5 percent each year from 2016-2021, noted AAFP President Reid Blackwelder, M.D., of Kingsport, Tenn.

[Dictionary page open to integrity entry]

"The proposal seems to be an attempt to move away from the current fee-for-service system," Blackwelder said. "It's important that we think beyond fee-for-service payments only and consider how payments for quality care need to be structured so we eventually can move away from fee-for-service as a sole payment model," he added.

As the end of the year approached, Congress wrote a three-month extension of the SGR into the budget bill, with the idea that those three months would allow lawmakers to reconcile the House and Senate proposals and get a bill passed. However, neither the House nor the Senate proposal mentions how an SGR repeal would be funded. That question should be answered early this year.

GME Payment

Better funding for graduate medical education (GME) also was very much at the top of the AAFP's wish list for 2013. It was a primary subject for AAFP leaders when they met with congressional leaders on Capitol Hill in February, particularly as it looked as though budget cuts to GME programs would go deep.

Sequestration cuts for primary care programs were expected to be as much as 8 percent, leading AAFP leaders to point out that the cuts would hurt programs that help produce family physicians, thereby undercutting the supply of FPs in the workforce pipeline. "The sequestration cuts may save money in the very short term," Stream said. "But it would be very costly in the long term, especially if Congress is not doing everything possible to improve the pipeline of new family physicians. This means that in the long run, fewer people are going to have access to family physicians, resulting in lower quality and higher health care costs."

The AAFP kept up the drumbeat on GME funding throughout the year, repeatedly calling on members to contact their legislators. In written testimony(5 page PDF) submitted to the House Appropriations Subcommittee on Labor, Health and Human Services, and Education in March, the AAFP reminded lawmakers that the United States faces a shortage of primary care physicians at the same time that millions more patients are expected to gain access to the health care system as a result of health care reform. The Academy called on Congress to provide millions more for programs that provide primary care training opportunities.

Open Payments Rule

2013 also was the year when the final rule on the Physician Payments Sunshine Act was issued. The Sunshine Act requires drug and device manufacturers and group purchasing organizations (GPOs) to report payments or gifts of $10 or more made to physicians, hospitals and other providers on a yearly basis. The provision also requires manufacturers of these products and GPOs to report ownership and investment interests held by physicians or their immediate family members in the entities.

After tweaking the proposed rule based on comments from the AAFP and other organizations, CMS proceeded with the plan, including creating a website that will compile data for the public by Sept. 30. This database caused some concern for the AAFP.

In May, CMS called on physicians and teaching hospitals to register for the National Physician Payment Transparency Program -- formerly the Physician Payments Sunshine Act -- so they could review data reported on them before it is posted on a public website in 2014. Physicians are not required to register for the program, but those who do will have an opportunity to dispute inaccurate or incomplete information and have it corrected before it is posted.

In response, the AAFP urged CMS to set up an interim review process so physicians and teaching hospitals could review their data before it is sent to CMS. "The AAFP remains very concerned that CMS is creating a data collection mechanism which directly pertains to an individual physician's financial information without first providing physicians with the ability to review and correct the interim data gathered by the applicable manufacturers," said Stream.

AAFP Director Wanda Filer, M.D., answers a question about team-based care posed by Joanne Kenen, health care editor for Politico and moderator of a March 19 policy forum on scope-of-practice issues.

Workforce Issues

Ongoing concerns about workforce issues and scope of practice also were on the Academy's radar in 2013.

At a March policy forum, AAFP Director Wanda Filer, M.D., of York, Pa., strongly emphasized that granting nurse practitioners (NPs) independent practice authority would undermine the concept of team-based collaborative care, while further fragmenting an already disjointed U.S. health care system.

"I have nurse practitioner colleagues and physician assistant colleagues who work right next to me, and they are incredibly valuable for the patients that we all care so much about," said Filer.

Still, physicians' extensive training and expertise best qualify them to lead the health care team, according to Filer. She cited the physician-led PCMH as the best example of a collaborative, team-based approach to care.

In fact, according to a policy brief co-authored by the Robert Graham Center for Policy Studies in Family Medicine and Primary Care, nearly 60 percent of family physicians work with NPs, physician assistants or certified nurse midwives to provide a team-based model of care, which will be increasingly important as millions more people in the United States receive health insurance coverage thanks to the health care reform law.

Then, during a July 17 webinar on scope-of-practice issues, Blackwelder and the executive director of the American Association of Colleges of Nursing agreed that team-based, coordinated care services are the most effective means of achieving improvements in patient care, enhancing access and controlling costs. But Blackwelder also noted that "each member of the (health care) team has unique but not interchangeable skills."

"Surveys show that patients overwhelmingly want coordinated team approaches to their health care needs, with a physician leader," said Blackwelder. Although NPs are critical members of the health care team, they "cannot provide the same level of comprehensive care provided by primary care physicians."

A study released in December backed up Blackwelder's assertion. It found that

  • 72 percent of American adults prefer physicians to nonphysicians when it comes to health care,
  • 90 percent of adults would choose a physician to lead their "ideal medical team" when given the choice, and
  • by a greater than two-to-one margin, adults see physicians and family physicians as more knowledgeable, experienced, trusted and up-to-date on medical advances than nonphysicians.

"This survey puts a face -- a family physician face -- on the message that's being repeated nationwide that team-based care and primary care are critical to the successful transformation of health care delivery in this country," said Blackwelder.