MedPAC advises raising primary care pay

If Congress approves the plan, physicians who are not designated as such would be paid less by Medicare.

By David Glendinning — Posted May 5, 2008

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Primary care doctors would receive higher Medicare payment rates under a proposal that a panel of congressional advisers will send to Capitol Hill in June, but at least one lawmaker is considering such a plan before the proposal even arrives.

Medicare Payment Advisory Commission members are worried about a growing primary care physician shortage and fear that fewer new doctors are going into primary care because of the relatively low rates that Medicare pays for their services. MedPAC found that nearly 30% of beneficiaries who are looking for a new primary care physician report difficulty in doing so.

Boosting rates to those types of physicians could help address the problem by acting as a financial incentive, MedPAC decided at its April meeting in Washington, D.C. "Primary care services have become undervalued over time, and thus they risk becoming under-provided," MedPAC senior analyst Cristina Boccuti told the panel.

As a result of a review of how much it pays for each Medicare treatment, the Centers for Medicare & Medicaid Services in 2006 decided to boost the relative values it assigns to some of the types of services that primary care physicians often provide. The MedPAC proposal would go one step further by designating individual doctors as primary care or non-primary care physicians and allowing members of the first group to use a special modifier on their claims. The modifier would garner higher rates for evaluation and management services.

MedPAC likely will advise giving the administration much of the say over which doctors can use the modifier. Under one scenario, the Dept. of Health and Human Services would start with physicians who designate themselves as generalists and then target the subset who provide primary care the majority of the time.

Another option would have HHS base the rate add-on solely on how often doctors provide primary care services. This would allow specialists who offer a lot of primary care to get the extra pay.

MedPAC also voted to recommend that Medicare give additional monthly payments to physicians who provide a "medical home" for chronically ill beneficiaries. The program is already involved in a limited medical home pilot project, and MedPAC will urge that Medicare take it nationwide.

Physicians divided

Senate Finance Committee Chair Max Baucus (D, Mont.) is not waiting for the official MedPAC report to arrive on his desk before putting some of its recommendations on the table.

During an April 11 meeting with several medical specialty organizations, Baucus floated a Medicare physician payment package that he hopes to bring to the Senate floor in May. In addition to stopping upcoming across-the-board cuts for 18 months, Baucus hopes to include a primary care rate boost and a medical home project expansion. But because of Medicare budget neutrality rules, putting more money into primary care would necessitate payment cuts for other doctors. This was the case when CMS approved the relative value changes in 2006.

The American Medical Association convened the group that recommended those relative value changes. It supports further improvements to primary care physician pay, said AMA Board of Trustees Chair Edward L. Langston, MD. But Congress should commit additional funds to Medicare so that cuts to other doctors are not needed, he said.

"Unfortunately, Medicare required the [relative value] increases to be budget neutral, which led to across-the-board reductions for all physicians, including primary care," Dr. Langston said. "Rather than another budget-neutral change that robs Peter to pay Paul, Congress should fund investments in the primary care infrastructure with additional funds."

Several physician organizations attending the Baucus meeting applauded his plan, despite its tradeoff. In an April 17 letter to Baucus, the leaders of the American Academy of Family Physicians, the American College of Physicians and the American Osteopathic Assn. wrote that Medicare pay increases focused on primary care doctors would help address the shortage.

"We look forward to working with you on the initial steps that can be taken now to provide such targeted primary care payment increases, recognizing that such increases may fall within current Medicare fee schedule budget-neutrality rules," the letter states. "Over the longer term, we believe that new ways are needed to fund primary care that take into account the evidence that primary care is associated with better outcomes and lower utilization of services covered under other parts of Medicare."

Physicians who would be on the other side of this equation reject the approach and warn that the goal of bolstering primary care could have unintended negative consequences if not done properly.

Virtually no radiologist would qualify for a primary care add-on or an evaluation and management rate boost under the MedPAC or Baucus plans, said Arl Van Moore, MD, chair of the American College of Radiology's board of chancellors. Thus, the more physicians are able to capture the extra dollars, the more Medicare would need to slash imaging payments. Medicare services, such as mammography, could become more difficult to access if the rate reductions take too big a bite, he said.

In recent years, radiologists received two blows to their payment rates through the CMS relative value adjustments and an imaging cut package approved by Congress. They fear that this proposal would be strike three, Dr. Moore said. ACR is seeking a solution that is more equitable to more specialties. "This pits one specialty against another," he said. "These proposals tend to divide medicine."

Surgeons also are worried about the consequences of shifting money to primary care based on a gut reaction to reports of a physician shortage, said Karen R. Borman, MD, professor of surgery at University of Mississippi Medical Center and a MedPAC member. The most recent CMS relative value update, for instance, shifted more money into primary care services than Medicare pays for all services in five surgical specialties combined.

Another such boost could cause increases in the volume of services in areas where spending is already on the rise and punish those who are keeping their spending in check, she said.

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Other Medicare proposals

At its April meeting, the Medicare Payment Advisory Commission also reviewed several proposed recommendations and informative chapters in advance of its June report. Topics included:

  • Bundling payments to physicians and hospitals to allow both entities to share in any Medicare savings brought about by improving care.
  • Publicly reporting physicians' financial relationships with drug and device manufacturers, hospitals and ambulatory surgery centers.
  • Establishing a public-private entity to study the comparative effectiveness of Medicare treatments.

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