MedPAC recommends doctor pay boost

Washington -- Physicians have another ally this year in the fight to ensure adequate Medicare reimbursements in 2006.

The Medicare Payment Advisory Commission adopted a recommendation at its January meeting calling on Congress to raise the base rate for doctors by 2.7% next year. Without action by lawmakers this session, the payments are expected to drop by about 5% from their current level.

MedPAC's decision indicates that the panel, which counsels Congress on how to set Medicare rates, thinks doctors will not receive adequate payment under current law. The recommended percentage boost corresponds to a projected increase in the costs of providing medical services next year minus a small percentage for a projected rise in physician productivity.

The American Medical Association hailed the announcement as the first step toward achieving one of the group's top legislative priorities for the year. Annual recommendations from the panel, which appear in MedPAC's March report, are not binding on Congress but often serve as the starting point for legislative debate.

"Unless Medicare payments keep up with the cost of providing care, there is a real concern that some physicians will be forced to stop taking new Medicare patients and access to care will suffer," stated AMA President John C. Nelson, MD, MPH. "If enacted by Congress, this new MedPAC recommendation will help physicians continue to treat Medicare patients."

MedPAC analysts reported to the commission that the level of compensation doctors have been receiving has not yet caused patient access problems on a large scale. A "small but consistent share" of beneficiaries have some problems getting to see a physician, but these seniors usually are new to fee-for-service Medicare or have recently moved to a different part of the country.

Experts at the January meeting nevertheless suggested that access problems could become an issue if Congress does not commit billions of dollars to ensuring a positive rate update in 2006. Analysts estimated that a 2.7% adjustment would cost more than $1.5 billion over one year and as much as $10 billion over a decade.

The long-term cost would be due to the impact of the 2006 pay adjustment being carried over year after year through the sustainable growth rate. The SGR is a formula that helps determine physician pay and that is largely responsible for the looming 5% cut for 2006 and similarly sized reductions for the following six years. MedPAC has advocated the SGR's repeal but continues to steer clear of promoting a particular formula replacement. The AMA supports substituting the SGR for a system that more accurately reflects physicians' cost increases.

Some MedPAC commissioners noted that the SGR presents a worsening problem, one that will require either a complete formula overhaul or increasingly expensive short-term fixes for the foreseeable future.

"Everybody should realize that is why we keep coming back every year to this," said Robert D. Reischauer, PhD, vice chair of MedPAC.

Changes ahead for imaging?

Soon after voting on overall physician payment, the advisory commission weighed in on a proposal that could end up making Medicare reimbursements more difficult to obtain for one popular type of service.

MedPAC commissioners approved a set of recommendations designed to create more federal oversight over the personnel who administer diagnostic imaging tests and the physicians who interpret the images. If Congress agrees with the panel, the Health and Human Services secretary would be instructed to set new federal standards for those billing Medicare for imaging.

The recommendations are a response to reports that the annual growth of Medicare spending on imaging over the last decade has been roughly three times the average spending growth in all physician services. As the size and cost of imaging devices shrink, more and more doctors see them as worthwhile investments for their own offices, helping to drive up federal spending on the procedures.

Analysts at the meeting said such increased utilization does not always lead to better health outcomes and can be harmful to patients who don't need the tests.

MedPAC members agreed that new HHS standards could reduce Medicare spending and improve patient safety by cutting down on unnecessary scans and ensuring that physicians and technicians are administering the services appropriately. The commission nevertheless rejected more specific language on what concerns the individual standards should address.

For instance, panel members voted against including a sentence in one of the recommendations stating that physician standards "should be based on the training, education and experience required to properly interpret [imaging] studies." In a letter to MedPAC, the AMA joined more than two dozen medical specialty organizations in arguing against such a definitive statement.

"Standards of practice are always evolving, and it is not uncommon for there to be disagreement regarding the appropriate training and experience standards among different specialties or even within a particular specialty," the letter says. "We have serious doubt about whether sufficient credible data exist to determine which standards are appropriate."

MedPAC also heeded AMA advice in not specifying with whom HHS should contract to administer the standards. The final recommendations state only that private organizations should be involved.

One group that would like to be included is the American College of Radiology, which already credentials imaging centers that meet certain safety and training requirements. The college, which has lodged its own concerns about the proliferation of imaging services, supports the MedPAC recommendations and will lobby Congress to approve them, said James Borgstede, MD, chair of the ACR board of chancellors.

"We don't envision that we will be the only accrediting organization," said Dr. Borgstede, a radiologist in Colorado Springs, Colo. "We're not trying for exclusivity."