Organized medicine unveils plan to overhaul Medicare delivery

Medical societies acknowledge that repealing Medicare’s sustainable growth rate formula is only half the battle in developing a high-performing program.

By Charles Fiegl amednews staff — Posted Oct. 29, 2012

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More beneficiary choices, infrastructure investments and payments that reflect the costs to physicians of providing services are the major principles the physician community will use as guideposts as lawmakers look to transition to a new Medicare delivery system. That’s what the American Medical Association and other organized medicine groups stated in an Oct. 15 letter to Congress.

The national and state medical and specialty societies identified the core elements they will support to move from the one-size-fits-all Medicare fee-for-service system to one offering an array of options to seniors and physicians. The organizations also reaffirmed their support for a repeal of the sustainable growth rate formula used to help calculate Medicare physician pay rates. Congress has prevented SGR cuts temporarily for the past decade, but physicians say the uncertainty created by the unstable pay system has hurt practices and prevented improvements in health care delivery.

“Although the SGR must be eliminated, the physician community recognizes that this is only one-half of the equation,” stated the letter, signed by the AMA and 110 state and specialty societies. “Therefore, the undersigned organizations have developed the attached principles and core elements that can form the basis for new federal policy on a transition from the SGR to a higher-performing Medicare program.”

The letter details three driving principles, three core elements and seven additional components needed for physicians to support a Medicare reform plan. The main principles emphasize that doctors and patients must retain the flexibility required for their health care needs to be met. Payment updates under a new system also must reflect the true costs of providing care and reward physicians for adopting innovations that boost quality in ways that restrain costs.

“The AMA has consistently urged Congress to eliminate the broken Medicare physician payment formula so we can begin to transition to new payment and delivery innovations that improve patient care,” said AMA President Jeremy A. Lazarus, MD. “Today, we offer principles that should be the foundation of a new system that supports physicians in improving the delivery of care with payment options that benefit patients, physicians and the Medicare program.”

Doctors have witnessed a typically annual — or more frequent — ritual in which the threat of double-digit Medicare pay cuts prompts a scramble by lawmakers to block them at the eleventh hour. A few times the cuts technically have taken effect, but Medicare officials have suspended claims processing until Congress patched the formula retroactively. Ending the cycle of SGR near-cuts has bipartisan support in Washington, but lawmakers have struggled to find the roughly $300 billion needed to pay for a permanent solution.

Most observers say Congress probably never will allow deep SGR cuts to go through, but practices cannot completely dismiss that chance.

An October survey of medical group administrators by MGMA-ACMPE, the entity formed by the merger of the Medical Group Management Assn. and the American College of Medical Practice Executives, concludes that the SGR and temporary pay patches have altered practice business decisions. For instance, 60% of respondents reported delaying the purchase of clinical equipment and/or reducing staff salaries or benefits. Roughly one in four practices said they have delayed the purchase of electronic health record systems.

If Congress does not stop the roughly 27% rate cut set for Jan. 1, 2013, 76% of practices say they will reduce staff benefits and 65% will eliminate administrative staff positions, according to the survey. Nearly 60% said they would reduce clinical staff. Most practices would stop accepting new Medicare patients or seriously consider limiting access.

The survey shows physician practices are ready to move beyond fee for service to an approach that rewards high quality of care, said Susan Turney, MD, MGMA-ACMPE president and CEO. “Now Congress must do its part, repeal the SGR, and provide stability in Medicare payments so physicians can explore and test new patient-centered approaches.”

A look past the status quo

The organized medicine letter to Congress is designed to assure lawmakers that when they repeal the SGR, the physician community is committed to embracing new payment methodologies and working to find savings in Medicare. Physicians in all specialties have shown the ability to lead new care delivery models, but the program’s pay system has not followed through with innovation support, some of the signatories said.

Primary care physicians, for instance, have turned their practices into patient-centered medical homes that coordinate beneficiary care, better manage chronic conditions and prevent disease, said Ray Quintero, director of government relations at the American Osteopathic Assn. The new pay system should include a variety of care model options, such as the medical home concept, that physicians can consider as possible good fits for their practices, he said.

“They have our support as long as the policy matches the principles we have set,” Quintero said.

One payment model won’t fit every practice, so it’s important that the next system include a variety of ways to deliver patient care, said Jerry Kennett, MD, chair of the American College of Cardiology’s advocacy steering committee. Cardiologists have been participating in bundled payment and accountable care organization initiatives, both of which reward physicians who provide higher-quality care instead of simply more volume. They also have used EHR functions that ensure tests ordered for patients are appropriate.

“From the cardiology perspective, we have proven tools that work,” Dr. Kennett said.

Continuing the status quo no longer is an option for doctors, said Robert W. “Charlie” Monteiro, MD, an internist in New Bern, N.C., and president of the North Carolina Medical Society. Physicians are ready to move forward, but for the past decade lawmakers have put off Medicare reform.

“They must face up to it, but they’re not alone,” Dr. Monteiro said. “We have to be part of the solution. And we’re saying, ‘Let’s fix it. We need to fix it.’?”

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3 driving principles for SGR reform

Eliminating the Medicare sustainable growth rate formula is only part of the solution to overhauling the system, organized medicine groups wrote in a letter to congressional lawmakers.

  • Successful delivery reform is an essential foundation for transitioning to a high-performing Medicare program that provides patient choice and meets the health care needs of a diverse patient population.
  • The Medicare program must invest and support physician infrastructure that provides the platform for delivery and payment reform.
  • Medicare payment updates should reflect costs of providing services as well as efforts and progress on quality improvements and managing costs.

Source: “Transitioning from the SGR to a High Performing Medicare Program: Driving Principles and Core Elements,” Oct. 15 (link)

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