AMA meeting: Reforming SGR tops Association's Medicare agenda for 2009

• INTERIM MEETING 2008
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Orlando, Fla. -- The AMA House of Delegates laid the groundwork at last month's Interim Meeting for a major push to reform Medicare physician payment next year.

Delegates agreed the Association will continue to lobby Congress for changes in the sustainable growth rate formula to better reflect practice costs, to improve the accuracy of the index that gauges increases in those costs and to investigate geographic pay disparities, among other issues.

SGR reform will top AMA's agenda, said Steven J. Stack, MD, a Board of Trustees member. "The solution will involve a mix of promising proposals that can fix the payment system and also help improve the quality of patient care."

The AMA Council on Medical Service requested physician input on payment systems that could replace or improve the current one. Council Chair David O. Barbe, MD, MHA, said a great deal of political interest is focused on alternative methodologies. Four in particular stand out, according to a council report the house adopted: bundled payments, under which physicians are paid flat rates per episode of care, rather than per service; gainsharing, under which hospitals and doctors agree to share incentive pay and savings from quality improvement; medical homes, under which doctors are paid for coordinating care; and pay-for-performance, under which doctors are paid based on quality measures.

But the council is also examining other options for a follow-up report at the AMA 2009 Annual Meeting. Physicians should come forward with ideas they think would have merit, Dr. Barbe said. "Think outside the box a little regarding alternative payment methodologies."

Delegates brought up balance billing during a reference committee discussion of the 2008 report. Balance billing allows a doctor to charge patients the difference between what Medicare pays and the actual costs of the services. Medicare bans the practice for participating doctors.

David McKalip, MD, a neurosurgeon and alternate delegate for the Florida Medical Assn., said the government doesn't have enough money to cover Medicare patients' care needs. Limiting payment limits access, he said. "Our patients should have the right to pay an extra $50 to spend more time with their doctors."

Daniel H. Johnson Jr., MD, former AMA president, agreed that physicians need more billing flexibility in Medicare to make patients more aware of the real costs of care. "What we have now is a situation with price controls," he said. "Is it any wonder that people are insulated from the costs of the services they receive?"

Others, such as American College of Emergency Physicians President Nicholas J. Jouriles, MD, cautioned that Medicare reform should put the patient first -- not physician pay.

Congressional Democrats are unlikely to support balance billing, John E. McManus, former Republican staff director of the House Ways and Means health subcommittee and one of the architects of the Medicare drug benefit, said during a presentation at the meeting. However, Congress is tiring of adopting annual Medicare pay patches and is open to a permanent SGR replacement, he said.

The reforms that the council started exploring are relatively untested and raise some concerns. But physicians who worry that such payment concepts as bundling and gainsharing would give hospitals too much control over Medicare dollars should take a look at the joint physician-hospital ownership of the Greater Rochester (N.Y.) Independent Practice Assn., said David Hannan, MD, a family physician on the IPA's board and a delegate from the Medical Society of the State of New York. The group clinically integrates two hospitals and more than 650 doctors and has found success with such reforms. "The money doesn't go anywhere unless both sides agree," he said.

Among other Medicare actions, delegates urged the Centers for Medicare & Medicaid Services to revise the Medicare Economic Index in a way that more accurately gauges the effects of productivity increases on physician practice costs. Delegates also agreed to commission an AMA study on variations in rural and urban physician practice expenses under the Medicare geographic practice cost index. And the house also called for stricter rules on private Medicare plans. The AMA will lobby CMS to award Medicare Advantage contracts only to health plans that have a medical loss ratio of 85% or higher, pay physicians no less than Medicare rates and abide by enforceable contracts that prohibit changes in doctor pay.