Physician Care Delivery, Payment Systems Subject of Graham Center Forum

April 16, 2014 02:57 pm Michael Laff Washington –

Few physicians and probably fewer patients are happy with the fee-for-service payment model for medical care, but a lot of work needs to be done to initiate any kind of change. That's according to panelists who spoke during a recent forum on primary care hosted by the Robert Graham Center for Policy Studies in Family Medicine and Primary Care.

Robert Berenson, M.D., an Urban Institute fellow, discusses the flaws in the fee-for-service payment system for medical care.

The forum addressed issues related to physician payment that ranged from the continued emphasis on fee-for-service to alternative care models and the overall complexity of primary care.

Robert Berenson, M.D., a fellow at the Urban Institute, discussed the continued reliance on the fee-for-service model and how the AMA/Specialty Society Relative Value Scale Update Committee's (RUC's) determination of Medicare payments for services is distorting outcomes of care. Berenson said the committee's methods are flawed because the payment system rewards tests and procedures over evaluation methods and patient results.

Although family physicians and others remain highly critical of the RUC's methods, Berenson is skeptical about the potential for success with alternative payment models, saying that they adhere too closely to the existing fee structure.

"If we're going to move to a new payment model, then let's move to a new model," he told AAFP News after the forum. "A lot of these tests are being built on the fee-for-service model, and that's not a recipe for success."

Story highlights
  • At a recent health policy forum, one policy analyst said alternative health care payment models must diverge from fee-for-service to succeed.
  • Another speaker reported on CMS-supported demonstration projects that support comprehensive primary care efforts to reduce costs.
  • Finally, a researcher studying the relative complexity of medical care provided by different specialists related his findings, including that primary care is one of the most complex medical specialties.

Berenson noted a lack of political will to take on powerful medical subspecialties that are unlikely to accept lower reimbursement rates for the sake of lower health care costs.

He supports a capitated payment system, which has been widely used in California and parts of Massachusetts without negative results. Other payment models are being explored, but thus far, their outcomes still are unclear. Insurance companies will be using fee-for-service for the next five years, Berenson predicted.

Although some alternative payment methods have left out select specialties, a new payment model is likely to provide some semblance of equity for primary care, Berenson noted. "Eventually, there will be some redistribution of revenue to primary care," he said.

Innovative Care Models

In an attempt to identify new ways to deliver and pay for primary care, CMS is sponsoring demonstration projects nationally with the hope of achieving better care at lower cost.

Jay Crosson, Ph.D., a senior health researcher at Mathematica Policy Research, is evaluating two of those projects. One effort, the Comprehensive Primary Care Initiative, is being undertaken by CMS and 31 other insurers to determine if a more comprehensive patient care model in primary care can improve health, lower costs and enhance patient satisfaction with care.

In this initiative, CMS pays each of the nearly 500 primary care practices involved in the project an average of $20 per month for each Medicare patient. The private insurers in the effort offer similar monthly payments. A shared savings program is being developed whereby practices that can demonstrate cost reductions will receive a portion of the savings.

The practices must change their methods of providing care to remain eligible in the program. Practices are required to improve access to care, provide care management to higher-risk patients, and offer care coordination across the medical community. Patient surveys are used on an ongoing basis to capture feedback.

Besides monthly payments, the practices receive technical assistance from CMS contractors, online learning programs, use of a collaborative website where best practices are shared and feedback from insurers.

For patients with more severe health conditions, CMS is testing another concept called "Independence at Home" that provides comprehensive care for patients with multiple chronic conditions. To be eligible to participate, patients must have two or more chronic conditions, have received rehabilitation and had a hospital admission within the past year.

"They are very ill patients who are unable to get out of their home and cannot go to a doctor without great cost or effort," Crosson said.

The Independence at Home demonstration is targeted to a much smaller group of patients. There is no upfront payment to practices, but they are eligible to receive incentive payments if they reach at least three of six designated quality measures that are tied to hospital readmission rates and inhome treatment.

The Patient Protection and Affordable Care Act included provisions that support demonstration projects and provides support for programs that are shown to be effective in delivering better care and reducing costs.

Crosson said it is too early to determine whether overall health costs are lower or if care is improved. An initial progress report on both studies will be presented to CMS by the end of 2014.

True Complexities of Care

Primary care is often considered the most basic form of medicine. The notion of its simplicity may explain, in part, why primary care services are valued at a rate lower than that of other specialties. But one researcher measured complexity among various specialties and found that the opposite is the case: Primary care, based on a range of factors such as treatment variables, is more complex than surgery or oncology.

David Katerndahl, M.D., from the University of Texas Health Science Center, is conducting a study for the Graham Center on the relative complexity of various medical disciplines. The general assumption is that surgery and cardiology are the most complex, but Katerndahl's findings reveal that it is, in fact, family medicine and internal medicine that hold this distinction. Patient encounters with family physicians are much more diverse than visits with an oncologist.

Acknowledging the difficulty of ranking medical fields based on a qualitative standard, Katerndahl included several factors while conducting the research. Using a range of measurements he categorized as "inputs," such as reasons for a physician visit, examinations, diagnosis and testing, Katerndahl uses a "complexity burden" as another measuring unit. Family and internal medicine patient encounters are three times more complex than ophthalmology, orthopedics or psychiatry.

In his final rankings, family medicine and dermatology increased in complexity. Most other specialties remained the same, except for nephrology, which was graded as significantly less complex. The research has not been published yet.