MedPAC Proposal Would Continue Primary Care Payment Increase

Draft Recommendation Aims to Correct Fee Schedule Imbalance

December 22, 2014 04:12 pm Michael Laff Washington –

With a 10 percent Medicare payment increase for primary care set to expire at the end of 2015, members of the Medicare Payment Advisory Commission (MedPAC) again showed their support for continuing the payment in some form during a recent meeting.(

[Doctor sitting at desk, speaking with female patient]

Specifically, commissioners considered( and voted to support a proposal from MedPAC Chair Glenn Hackbarth, J.D., that would maintain the increase through use of a per-beneficiary payment to primary care physicians while at the same time reducing payments for non-primary care services that are paid to specialists.

Overall, the proposal calls for reducing payment for non-primary care services -- which span 75 percent of services included in the fee schedule -- by 1.4 percent. It is hoped that such a budget-neutral proposal could gain acceptance from Congress.

Some commission members spoke of the urgency to bolster primary care, noting that demographics -- particularly, the aging of both physicians and the Medicare patient population -- are contributing to a pending shortage of primary care physicians.

Story highlights
  • The Medicare Payment Advisory Commission (MedPAC) continues to express concern about the payment imbalance between primary care physicians and other subspecialists.
  • During a recent meeting, MedPAC commissioners supported a proposal to continue an increased Medicare payment for primary care.
  • Under the proposal, primary care physicians would receive a per-beneficiary payment, while payment for non-primary care services would drop 1.4 percent.

"Future physicians are deciding whether to go into primary care or a specialty," said Commissioner Craig Samitt, M.D., M.B.A. "With an inadequate payment policy, we could face an irreversible problem five years from now."

Yet even if the bonus is continued beyond 2015 in another format, he and others acknowledged that it does not provide enough incentive.

"We're not moving fast enough or substantively enough to support primary care," Samitt said.

Commissioner Kathy Buto, M.P.A., suggested that the increased payment could be a building block to something "more ambitious," suggesting a bundled payment format or some method whereby primary care would not be subject to payment based on the sustainable growth rate (SGR) formula, but rather would be paid on a different scale compared with other specialties.

The commission, as a whole, continues to advocate repealing the SGR, calling it "urgent" in briefing materials.

In addition to the fee schedule imbalance, the salary disparity between primary care physicians and other specialists continued to command commissioners' attention. The average salary for primary care physicians is $220,000, according to MedPAC findings, compared with $475,000 for non-surgical procedural specialists. Such a wide gap raises questions about the accuracy of the fee schedule.

Background materials provided by commission staff also noted that Medicare stacks up favorably in patient satisfaction surveys compared with private insurance plans. On a national level, patients report they are satisfied with their Medicare coverage, and only a small percentage report they are looking for a new primary care physician, according to a MedPAC survey.

The survey, conducted by telephone, included responses from 4,000 Medicare beneficiaries and 4,000 individuals with private insurance. Minorities and individuals with disabilities reported longer wait times to obtain an appointment with a physician.

Of survey respondents, 92 percent reported that they are not looking for a new primary care physician. Among beneficiaries who are, only 2.5 percent said they encountered a problem finding one.

Still, said Hackbarth, when he visits with members of Congress, they often tell him that their constituents report having difficulty finding a primary care physician, and they ask why MedPAC statistics don't seem to reflect that.

"Our results are national," Hackbarth said. "We know there are pockets of problems. In my hometown, it's not that Medicare rates are too low, it's because there's a significant imbalance of physicians and new retirees."

Related AAFP News Coverage
MedPAC Again Voices Support for Continuing Primary Care Payment Hike
Next Step Will Be to Draw Up Draft Recommendation