Medicare pay-for-performance plan criticized over early launch

CMS proposes adjusting 2015 payments for some doctors by using quality and efficiency measured in 2013.

By Charles Fiegl — Posted Sept. 19, 2011

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Members of organized medicine are sharply critical of a plan by the Obama administration to initiate a Medicare value-based purchasing program two years before federal law requires it.

The health system reform law requires the Centers for Medicare & Medicaid Services to use a value-based payment modifier -- another term for pay-for-performance -- for some physicians starting in 2015. The modifier would adjust payments to physicians based on the quality of care they provide and how much cost they incur relative to their peers during the course of a reporting period, CMS said. All physicians in the program would be subject to the modifier starting in 2017.

Although the 2015 start date of pay-for-performance is mandated by Congress, CMS plans to use a 2013 reporting period to determine how pay will be adjusted for some physicians in 2015.

The American Medical Association submitted an Aug. 29 comment letter on the CMS proposed 2012 fee schedule that outlined the initial payment modifier plans. The Association is concerned that physicians could see their payments cut based on premature or unfair performance measurements.

In a statement, AMA President Peter W. Carmel, MD, said: "We strenuously object to CMS' plan to shorten an already inadequate preparation period by basing the 2015 value-based payment adjustment on 2013 performance. In addition, the AMA cannot support the imposition of a value-based payment modifier on any physicians unless and until there is evidence that it is possible to accurately measure value without penalizing those physicians who treat the most difficult cases."

CMS proposed using the 2013 year as the basis for the payment adjustments because not all of a physician's claims may be processed until 2014. The agency said in the proposed fee schedule that it needs "adequate lead time to collect performance data, assess performance, and construct and compute the value modifier during 2014 so that it can be applied to specific physicians starting Jan. 1, 2015, as required by statute."

The American Academy of Family Physicians also is troubled by the CMS plan to reward or penalize physicians in 2015 based on the care they provide in 2013, the academy said in its comment letter. The Medicare agency must find a way to determine the adjustments in a more timely manner, it said.

"In an age in which data and information can be quickly transmitted and processed, we fail to understand why CMS remains stuck in a mode that requires it to take months, if not years, to determine which physicians bring value to the system," the academy said.

Resistance to imaging cuts

In the same fee schedule rule, CMS has proposed applying its multiple procedure payment policy to the professional component of certain advanced imaging services, such as MRIs and CT scans, starting Jan. 1, 2012. The agency already reduces pay for the technical component of multiple advanced diagnostic scans, which impacts health professionals who provide the screenings.

Expanding the policy would reduce payments for physicians who interpret multiple advanced imaging scans provided to the same patient on the same day.

For instance, a physician interpreting two MRI scans on the same patient would receive full payment for reading the first scan, but 50% less for reading the second and any subsequent scans.

"It appears that CMS' decision ... is rooted in the incorrect assumption that there are considerable efficiencies when radiologists interpret successive imaging studies during a single patient visit," the American College of Radiology wrote in its comment letter.

"However, radiologists are morally and professionally obligated to expend an equal amount of time, effort and skill on interpreting images, regardless of whether or not a previous examination has been performed on the same day."

The Medicare agency wants to revise the policy so that it can slow the growth of what it considers overutilized services. But the AMA agreed with the ACR, the American College of Cardiology and others that the across-the-board reductions are the wrong approach to the issue.

The AAFP urged CMS to finalize the imaging adjustment proposal. Paying less money for advanced imaging would free up Medicare funding that could go toward boosting rates for other services, such as primary care office visits.

Evaluation and management review

The CMS proposed fee schedule rule also requests that the AMA/Specialty Society Relative Value Scale Update Committee, or RUC, review all evaluation and management codes to determine how payment policies for the primary care services might be adjusted.

The "focus of primary care has evolved from an episodic treatment-based orientation to a focus on comprehensive patient-centered care management in order to meet the challenges of preventing and managing chronic disease," CMS said in requesting the comprehensive review.

The agency's call for the RUC to re-survey 91 evaluation and management codes is timely and important, said the AMA, which convenes the panel representing a wide range of physician specialties. But the request does not allow for the consideration of alternatives and is too limited, the Association warned.

In the past, for instance, the RUC and the CPT Editorial Panel have studied resource costs associated with medical home monthly management services, but proposals developed by the committees have not been accepted by CMS.

The AMA encouraged the Medicare agency to participate in such future initiatives.

"The committees, however, are prepared to address this issue and develop a model that may be acceptable not only to our physicians, but also to the Medicare program," the AMA said in its comments.

The American College of Physicians asked CMS not to move forward with a comprehensive evaluation and management review, but to consider other alternatives to valuing primary care services.

The college recommended "that CMS work with the medical community to develop evaluation and management codes that will appropriately describe the services before undertaking another review."

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Pay-for-performance, two years early

The health system reform law requires federal officials to establish a Medicare value-based purchasing modifier that would adjust physician fees based on quality and efficiency measures. Although the adjustments won't start until 2015, underlying physician performance could be measured starting in 2013 under a proposal by the Centers for Medicare & Medicaid Services:

Jan. 1, 2012: CMS outlines steps for establishing the modifier.

Jan. 1-Dec. 31, 2013: CMS starts measuring physician services to determine modifier adjustments in 2015. The agency begins implementing the modifier through the physician fee schedule rulemaking process.

Jan. 1, 2015: CMS starts applying the modifier to specific physicians and groups.

Jan. 1, 2017: CMS starts applying the modifier to all physicians and groups.

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