Physician Payment, RUC Top FP Issues, Says New AAFP President

Q&A Introduces Stream to Academy Members

October 14, 2011 05:05 pm James Arvantes

Glen Stream, M.D., M.B.I., of Spokane, Wash., the AAFP's newly installed president, describes himself as "an optimistic person by nature," but not someone who is "naively optimistic." Stream, like many in the health care world, is convinced that primary care in general and family medicine in particular are keys to resolving many of the ills that plague our nation's health care system.

[Glen R. Stream, M.D., FAAFP, MBI]

AAFP President Glen Stream, M.D., M.B.I.

During his acceptance speech last month at the Opening Ceremony of the AAFP Scientific Assembly in Orlando, Fla., Stream said family physicians have an ethical obligation to transform the nation's health care system based on the tenets of primary care and family medicine.

As Stream assumes the presidency of the Academy, the AAFP is engaged in many areas and on many levels, working to create a health care system that achieves the simultaneous goals of higher quality, lower costs and greater health care access. Stream addressed these and other issues during a recent interview with AAFP News Now.

Q. As you assume the presidency of the AAFP, what do you think are the main concerns of AAFP members right now?

Our biggest concerns are payment issues. There are several payment issues we are working on, and one relates to the AMA/Specialty Society Relative Value Scale Update Committee, otherwise known as the RUC. We are trying to achieve fair payment under the Medicare payment formula. But, we are convinced that primary care has been undervalued in the RUC process, and that needs to be corrected.

We also are very concerned about the perennial payment issues surrounding the sustainable growth rate formula, or SGR, and whether Congress will enact a permanent or temporary payment fix. The new twist this year is the congressional Joint Select Committee on Deficit Reduction -- the so-called supercommittee -- that was formed as part of the debt-ceiling legislation. One of the things the supercommittee may be considering is payment for medical services through the federal government. That is both an opportunity and a concern.

Story highlights

  • Newly installed AAFP President Glen Stream, M.D., M.B.I., of Spokane, Wash., says that payment issues are the biggest challenge facing Academy members in both the short term and the long term.
  • The ultimate goal of the AAFP's payment reform efforts is to achieve fair and equitable payment for the work performed by family physicians, according to Stream.
  • In addition, Stream discusses repeal of the sustainable growth rate, changes in the process for valuing services provided to Medicare patients and implementation of blended payment models that reward value, as well as volume.

Q. How will the AAFP address the payment concerns you cited?

A. We are really actively engaged on several fronts. Our private sector advocacy folks are regularly working with health plans on (issues involving) payment through private insurance, and we are lobbying the supercommittee, which is involved in the budget issue. This is in addition to our long-standing advocacy about the need to eliminate the SGR. We are actively involved in advocacy efforts that organized medicine has undertaken to address physician payment issues. I represent the AAFP on an AMA task force on physician payment issues that is working to come up with alternate payment models that fairly compensate physician services. In addition, AAFP Board Chair Roland Goertz, M.D., M.B.A., is serving on an AMA task force that is specifically addressing the SGR.

The Academy also has formed a Primary Care Valuation Task Force to assess new options for valuing primary care payment. It is our task force, convened by the AAFP, but with physician-payment experts from other organizations, including physician organizations that have primary care members. It is important to note that observers from CMS sat in on the first meeting of the task force in August. Rep. Jim McDermott, D-Wash., who is from my home state of Washington, has proposed legislation asking CMS to have an alternate voice to the RUC process in valuing Medicare payment. A representative from the congressman's office attended the first meeting of the task force as an observer, as well.

The AAFP Primary Care Valuation Task Force is probably our most important long-term effort to address physician payment. But in the short term, we have to be proactive on the issues that are at hand, and those are the impending Medicare physician payment cut of 29.5 percent on Jan. 1, and the federal budget issues.

What are your views on the RUC?

A. I support the direction that the AAFP Board of Directors has taken in regard to the RUC. I differ with opinions that our approach to the RUC has not been appropriately forceful. The letter we sent to the RUC in early June was very clear about specifying the changes we feel are appropriate to address our concerns about the flawed RUC process for valuing primary care payments. We have a very definite timeline and are giving the RUC until March 1 to respond. I don't think there is any doubt that the AAFP Board is willing to take significant action if our concerns are not substantially addressed.


Q. What would you say to AAFP members who have called on the Academy to immediately withdraw from the RUC?

A. I certainly understand the frustration of members who feel that way. There are many members in the AAFP leadership who feel that way, too. We are trying to be very cautious and deliberative about what is the best strategy to pursue to achieve our end goal. We do not want to make a reflexive and emotional decision by abruptly withdrawing from the RUC when it is not clear that leaving is going to get us to where we want to go.

There is no current alternative to the RUC for valuing primary care payments. So as we are addressing our concerns within the RUC, we also are aggressively pursuing alternatives to the RUC for advising CMS on valuing payments for physician services under Medicare -- particularly because the Medicare payment schedule drives many payments from private insurers, as well.

Our ultimate goal in this process is to have what we think is fair and equitable payment for the work performed by primary care physicians.

Q. What do you think the future of fee-for-service payment is in this country?

A. It is the opinion of the Academy that, over time, the fee-for-service component of physician payment will and should decrease in importance. I don't think it will completely go away. There are some services that are especially and appropriately valued by fee-for-service. What we envision is a blended payment methodology that includes a fee-for-service payment, a care-management fee within the patient-centered medical home, or PCMH, model and some component of a bonus for improving quality.

If a physician is delivering high-quality care under the payment methodology of the care-management fee and fee-for-service, there also should be measurable quality improvements that are compensated for.

Q. You pointed out physicians again are faced with a steep cut in the Medicare payment rate on Jan. 1 because of the SGR formula. What are the Academy's short-term and long-term strategies for addressing the SGR?

A. We have been very engaged in telling Congress that the SGR needs to be permanently replaced with a formula that works or at least freezes payment at current levels with an incremental (positive) update. But the SGR formula, which is very abstract and seems to be poorly understood by anyone but a Ph.D. economist, continues to generate numbers that result in negative updates to physician payments.

We are asking for a permanent replacement. If that is not feasible, we would be very disappointed. But if that (failure to attain a permanent replacement) happens, we at least want a three- to five-year period of stability rather than continuous short-term patches (to avoid threatened physician pay cuts). In 2010, Congress passed five short-term patches to block or override cuts called for by the SGR. That creates uncertainty, and it is distressing to practices, which cannot anticipate what their practice revenues are going to be. So we need a period of stability. We also are asking for a minimum 3 percent positive incremental update for primary care services compared to updates to the current fee schedule for all physicians.

Q. What advice would you give our members regarding the SGR?

A. I think they need to continue to stay tuned for direction from the AAFP and reach out to their members of Congress when they get the call, because I believe we have been effective in moving the needle in the past, and we will continue to do that.

There is an assumption among some that there is no cause for concern because Congress has acted in the past to block the cuts at the last minute. I think it is unwise for people not to take the pending reduction in Medicare payment seriously. We still need to be very actively engaged as an Academy -- which includes our grassroots members -- in reaching out to members of Congress and letting them know this needs to be fixed.

Q. Last year when you were running for AAFP president, you put on a pair of sunglasses and said the future of family medicine is so bright you needed your shades. Why did you say that?

A. I truly believe what I said about the future of family medicine. I am an optimistic person by nature, but not naively optimistic. The way I survey the landscape is that there is significant unsettledness in our health care system and in federal financing in general. This is an opportunity for family medicine to convincingly make our case that there is overwhelming research evidence of the value family physicians bring to the system in terms of delivering high-quality care and saving costs. If policymakers want to invest in high-quality and cost-saving health care, then they need to invest in family medicine and provide adequate payment to family physicians.

If public and private payers fail to make up the payment disparity between primary care physicians and subspecialty physicians, we are not going to have enough family doctors to take care of people and to achieve the goals of cost savings and higher quality.

Q. What does the emergence of accountable care organizations, or ACOs, mean for family medicine and, in particular, for small and solo family practices?

A. The final regulations for ACOs are still pending. I was at two CMS meetings prior to the release of the draft regulations for ACOs where the AAFP and other organizations provided input. We expressed our concerns about the amount of risk involved in the models and how that would affect small practices and practices in rural areas. We also expressed concerns that ACOs would be dominated by hospitals.

I was very disappointed with the draft ACO regulations. They were not at all friendly to primary care. First of all, under the draft regulations there are two options for participating practices. With one model, practices have to assume risk starting in the first year, and in the second option, they have to assume risk by year three. Primary care physician practices often operate within a narrow profit margin, making it impossible for them to accept the risk called for in the draft ACO regulations.

Also, the draft regulations do not do anything to address areas of the country that have been very efficient in delivering health care and have per capita annual Medicare costs that are lower than other parts of the country. If the only way to benefit from an ACO is in the shared savings model, how can practices save more if they have already been very efficient? It is illogical.

Another limiting factor is primary care physicians are allowed to participate in only one accountable care organization. If a primary care physician is in a community where there is more than one dominant health care system and that primary care physician is participating with more than one system, then suddenly that physician has to align with one health care system and not do business with the other. In my own community, that's impractical. We have two dominant health care systems in my community that are waging a market-share battle with one another. The independent practices would be in a very difficult position if they had to choose who to align with in an ACO model of care.

The draft regulations also are overly prescriptive and burdensome. There are estimates as to the start-up costs of launching an ACO. Even though the draft regulations do not insist that a hospital has to be a part of an ACO, it is really only hospitals and large integrated health systems that would have the kind of capital needed to participate in ACOs. The 65 measures of quality in the proposed regulations are very focused on hospital care, even though the real work of an ACO is to keep people out of the hospital. Those measures should not be so heavily focused on quality improvement for hospital care.

We are very hopeful that the final ACO regulations will represent a substantial improvement over the proposed regulations and will address the concerns the AAFP has raised. The AAFP sent a very detailed letter to CMS in May voicing our concerns about various provisions in the proposed regulations.

Q. As you know, the AAFP supported the enactment of health care reform last year. Can you explain why the AAFP took that position?

A. It was a very difficult and challenging process. For more than 20 years, we have had a policy about health care for all, meaning everyone should have coverage and access to health care. As we looked at the Patient Protection and Affordable Care Act and the provisions that were in it, we undertook a painstaking evaluation to determine what aligned with our mission and what did not align with our mission.

We realized the legislation was politically controversial, but we felt on the whole that there was more in the bill that was in the best interest of family medicine and our patients. Does that mean we are completely happy with it? Absolutely not. We were very disappointed that the Affordable Care Act did not contain a permanent SGR fix. And there were no substantial provisions in the Affordable Care Act addressing medical liability reform.

There was some increase for primary care payment. It was a good sign that the congressional process was recognizing the need to improve payment for primary care and address some of our workforce issues. But the Affordable Care Act did not go far enough. Going forward, we will evaluate each of the individual provisions in the Affordable Care Act, holding up our yardstick of health care for all and what is good for family medicine, to determine whether to support a particular provision or provisions.

Q. What would you say to AAFP members who oppose the Patient Protection and Affordable Care Act?

A. I would say I respect their opinion. I don't think my opinion is any more valid than anyone else's opinion. The AAFP is a representative body, and the decision whether to support the health care reform legislation went through our representative process, through our Congress of Delegates. In any process like that, there is going to be a majority and a minority opinion.

I would ask that people recognize the challenges in a large membership organization like ours. We have the full spectrum of political opinion. In our most recent member survey, 19 percent of members wanted us to advocate for complete repeal of the Affordable Care Act and 18 percent wanted us to pursue a single-payer option. Like most large membership organizations, the AAFP has people at polar ends of opinion.

We are trying to find that central course -- how can we be effective? If we are not willing to take on some controversy, we are not going to be effective in our advocacy efforts. There are common elements that bind us together as family physicians -- our focus on good patient care and the principles of family medicine. Those elements that hold us together are more important than our political differences.

Q. There is a lot of support for the PCMH on the federal, state and local levels and in both the public and private sectors. It must be encouraging to see that kind of support.

A. It is very encouraging. With most innovations, you see the early adopters -- the true innovators -- and then the practices that follow just behind those practices. I think we are really in the middle of the bell-shaped curve of recognizing the importance and value of the PCMH and making that transformational effort. It is hard. The people who are the early adopters are really the evangelistic folks.

The challenge is for the bulk of our members, who are just working hard every day to keep their necks above water. It is harder for them to make that transition and transform their practices into patient-centered medical homes. So we need to increase our efforts as an Academy to provide resources to folks to help them make that transition. TransforMED this past year has increased its offerings to small practices to help them lessen their overall investment.

It also is very encouraging to see the growing body of peer-reviewed research that validates the PCMH model as delivering better care and reducing total health care costs.

Q. The implementation of health care reform is likely to create a greater demand for family physicians. What is the AAFP doing to help ensure that more medical students choose family medicine as a long-term career?

A. We look at this as a pipeline issue -- how far back can we reach to get people interested? How do we nurture their interest in family medicine through their professional development? The Academy has a student interest initiative that is bringing together a wide spectrum of people -- college guidance counselors, medical school faculty, and medical school students and residents.

We are saying, "How do we identify people who are interested in family medicine, and how do we maintain their interest through their medical education? How do we prevent their interest in family medicine from being derailed by financial issues?" As far as legislation, we are very actively advocating for scholarship programs, more family medicine residency slots and opportunities with the National Health Service Corps.

In addition, we would especially like to see Medicare graduate medical education payment for family medicine residencies go directly to the program and not through an academic health center. That would provide more flexibility and financial stability to the residency programs.

Q. Is there anything else you would like to say to AAFP members?

A. During the past several years, we have gotten used to health care being in the public consciousness and, therefore, part of the political debate. But before the last several years, that had not been the case. It seems very clear that health care is going to be an issue during the upcoming 2012 presidential and congressional campaigns and elections. We need to work to keep our issues at the forefront.