Tag Archives: Medicare

ACA: Helping or Hurting Solo Practice?

It won’t surprise many to learn that the age of the solo practitioner has, for the most part, come to an end. Over the past several years, small and solo practices have closed, been sold to hospitals, or merged with larger groups. The reasons are fairly obvious. Declining payments, rising malpractice costs, increasing regulatory burdens, costly new health information technology requirements, and crushing medical school debt have made it difficult for physicians to operate the small practices that once were commonplace around the country.

Now add the Affordable Care Act (ACA) to the mix. At a July 19 hearing of the House Small Business Subcommittee on Investigations, Oversight and Regulations, lawmakers questioned whether the health reform law would help or hurt physicians looking to keep their practices small and independent. The answers from the expert panel were mixed.

Gone are the days of Marcus Welby. Courtesy Wikimedia Commons/Public Domain License

The emergence of accountable care organizations (ACOs) will drive more hospitals to buy up small physician practices, Mark Smith, president of the physician recruiting firm Merritt Hawkins, predicted. The health reform law heavily promotes the formation of ACOs, which call for physicians and hospitals to work more closely and to share in bundled payments for episodes of care. Mr. Smith said small practices aren’t well-positioned to enter the ACO world if they aren’t integrated with a hospital because the ACO model calls on practices to assume financial risk.

But Joseph M. Yasso, Jr., DO, a family physician in Independence, Mo., who sold his practice to a hospital group 20 years ago, said the ACA’s promotion of patient-centered medical homes could be a lifeline for small practices. Physicians are adapting to the new environment by becoming medical homes and participating in government pilots where they can share in the savings they generate by providing more efficient care, he said.

One thing everyone on the panel did agree on was the need to fix the Sustainable Growth Rate (SGR) formula used in setting physician payments under Medicare. No surprises there either.

— Mary Ellen Schneider

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Summer Doldrums for the SGR

The question of what to do about Medicare’s Sustainable Growth Rate formula, which governs physician pay, likely got its final serious look on Capitol Hill on July 11–that is, before Congress heads out the door for a protracted summer recess and then gets caught up in the fall campaign season. And it wasn’t much of a look.

Sen. John Kyl takes notes as physicians talk about SGR. Alicia Ault/IMNG Medical Media

The Senate Finance Committee held its third and final “roundtable” discussion on the SGR, this time allowing physicians to weigh in.  Representatives from the American Medical Association, American Academy of Family Physicians, American College of Surgeons, American College of Cardiology, and American Society of Clinical Oncology politely answered questions from committee members who showed up. Most of the Democrats on the committee sat in,  at least for a portion of the almost two-hour meeting, while only two Republicans attended–John Kyl (Ariz.) and John Thune (S.D.), who came for only the last half hour.

The discussion meandered quite a bit and quite often, with physicians talking about the need for aligning incentives, creating medical homes, and rewarding quality. Dr. W. Douglas Weaver, a past president of the ACC and current Vice President and Systems Medical Director of Heart and Vascular Services, Henry Ford Health System in Detroit, said that the instability caused by the ever-fluctuating SGR situation was thwarting efforts to create new delivery systems.

But there was little concrete discussion of what to do to avert the 27% cut mandated by the SGR that will take effect January 1, 2013.

Senator Max Baucus (D-Mont.), who chairs the Finance Committee and led the

Sen. Max Baucus and Sen. Orrin Hatch listen to physicians. Alicia Ault/IMNG Medical Media

roundtable, at one point said that while he was hearing great ideas, he wanted to know what action could be taken quickly.  Senator Kyl also tried to steer the discussion back to the practical. He also reminded physicians that Congress is driven by 10-year budget-setting imperatives; thus, any suggestions for the SGR proposed for the short term must also work over the long haul, he said.

The elephant in the room: how to pay for an SGR fix or replacement, now clocking in at about $300 billion and rising. Physicians have steered clear of suggesting any financial solutions.

The committee broke with no promises. In an interview afterwards, Dr. Glen Stream, AAFP president, said that any SGR tinkering would likely be put off until at least after the November election. That puts the onus on a lame duck Congress.

Do you think they will make a short term fix or come up with some kind of permanent solution?

Alicia Ault (@aliciaault on twitter)

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Criticism of the AMA’s RUC Grows

Tom Scully, the outspoken former head of Medicare, recently said that one of the biggest mistakes policymakers made when redesigning the physician payment system in the early 1990s was giving the American Medical Association control over the Relative Value Scale Update Committee or the RUC.

The RUC, which is as controversial as it is unknown, is a 29-member panel that makes recommendations on how to value of thousands of physician services under Medicare. While Medicare officials are under no obligation to accept the panel’s decisions, most of the time that’s exactly what they do.

Courtesy Wikimedia Commons/ Public Domain.

Mr. Scully told members of the Senate Finance Committee that the current RUC structure, as run by the AMA, isn’t objective enough. There’s a lot on the line since the RUC’s decisions impact about $80 billion in Medicare spending each year, he said. As lawmakers consider how to reform the physician payment system, he urged them to also think about ways to make the RUC less political and more independent.

The comments in the Senate hearing room were just a sampling of the criticism that the AMA and the RUC have received recently. Over the past year or so, the RUC has been under near constant attack from a small group of primary care physicians who are suing the Centers for Medicare and Medicaid Services with the goal of getting the agency to dump the RUC. Their contention is that the RUC is biased toward subspecialists and that the panel’s recommendations have contributed to a significant gap between primary care and specialty pay.

The AMA has continued to support the RUC process, arguing that a group of physicians is best positioned to determine the value of medical services and that the panel has often championed payment increases for primary care services.

— Mary Ellen Schneider

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A Hospitalist’s Call to Action

Dr. Patrick Conway is the Chief Medical Officer at the Centers for Medicare and Medicaid Services, but he also happens to be a practicing pediatric hospitalist. So when he showed up at the Society of Hospital Medicine’s annual meeting earlier this week to deliver one of the keynote addresses, he got a warm welcome from fellow hospitalists happy to see one of their own in a real position to make decisions about Medicare’s policies.

Dr. Conway gave the standard speech about what CMS officials are doing to transform the health care system. Then he turned to his hospitalist colleagues and gave them some things to do, too. Hospitalists need to partner with the hospital administration and their quality improvement teams. They need to understand their hospital’s performance data. And they need to take charge, he said, by leading multidisciplinary teams.

“We’re at a unique time in health care where we can drive change,” Dr. Conway said. “My challenge to you would be, please don’t sit on the sidelines.”

Dr. Patrick Conway

He urged the audience – hospitalists gathered in San Diego for continuing education and networking – to make an effort to lead some type of system improvement in their hospital. “I don’t actually care what it is, but work on some broader system changes in your local setting,” Dr. Conway said.

If hospitalists are looking for a reason to get out in front when it comes to system change, there are plenty of financial carrots and sticks coming very soon from the Medicare program. Dr. Conway outlined many of them, from Accountable Care Organizations to the readmission reduction program to the hospital value-based purchasing program. But the best reason to be active in changing the way the health system works is for the benefit of patients, he said. That’s the reason that Dr. Conway still works as a hospitalist nearly every weekend for free. “It’s about those families that you take care of,” he said.

– Mary Ellen Schneider

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Innovation Center Seeks to Renovate Medicare

Government officials have stood before doctors many times and talked about the need to change the perverse incentives that pay them more for caring for sick patients than for keeping people healthy to start. Dr. Richard Gilfillan, who runs the new Center for Medicare and Medicaid Innovation, had a similar pitch when he talked to more than 1,000 people who recently convened at a Washington, D.C. hotel for a day-long summit on health care innovation. The difference is, Dr. Gilfillan has some leverage.

Under the Affordable Care Act, his new center is charged with rapidly testing alternative payment and health care delivery models. If those pilot projects are proven to both improve the quality of care and bring down health care costs, the Secretary of Health and Human Services can roll out the program nationally. There’s a little more paperwork involved, but that’s the general idea.

Dr. Richard Gilfillan (R), with HHS Secretary Kathleen Sebelius and former head of the Centers for Medicare and Medicaid Services, Dr. Don Berwick, in November. HHS Photo by Chris Smith.

What that means is that in a relatively short amount of time, Medicare could fundamentally change the way it pays doctors. That is, if the pilot projects sponsored by the Innovation Center are successful.

Dr. Gilfillan offered an example: Let’s say the Innovation Center launches a project where it pays primary care physicians an extra $10 per patient per month to coordinate care. If officials at the Innovation Center can prove that the project improves outcomes and reduces costs, HHS can publish regulations to roll it out to primary care physicians around the country. “As you can see, this is a powerful tool for changing the way we deliver care,” Dr. Gilfillan said at the summit.

The Innovation Center has been around for about a year and officials there have been busy putting together a set of pilot projects that look at new ways to deliver primary care and home-based care. They are also testing other concepts like bundled payments and accountable care organizations. Check out the Innovation Center’s report on its first year for descriptions of all the projects.

One thing they are trying to do in each of the projects, Dr. Gilfillan said, is to work closely with private payers. The goal, he said, is to make life a little simpler for doctors by ensuring that when they find new payment mechanisms that work, all the payers, both public and private, will adopt it in the same way.

— Mary Ellen Schneider (on Twitter @MaryEllenNY)

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Spurring Health IT Adoption

The Obama administration really, really wants doctors to start using electronic health records (EHRs). For the past few years, they have been out urging physicians to invest in the systems and offering a pretty big carrot for adoption. Under the 2009 HITECH (Health Information Technology for Economic and Clinical Health) Act, physicians who meet certain quality metrics through the use of certified health IT systems can qualify for incentive payments from Medicare and Medicaid. Under the Medicare program, the maximum incentive is $44,000 over 5 years. Under Medicaid, it’s nearly 64,000 over 6.

HHS officials want to make paper medical records a thing of the past. Courtesy Wikimedia Commons/U.S. Navy Photo by Rod Duren/ Public Domain.

Now officials at the Health and Human Services department are trying to drive up adoption by removing a potential barrier to early participation in the program. HHS recently announced that physicians can begin participating in the incentive program this year and not have to meet quality standards until 2014. Previously, if a provider reported to HHS that he or she was using health IT as part of the incentive program in 2011, they would have to meet the quality standards starting in 2013. But those that started sometime in 2012 wouldn’t have to meet the standards until 2014 and would still qualify for the maximum incentive payments. It can get a little complicated, but essentially HHS is trying to take away reasons for people to hold off on adopting EHRs.

It’s hard to tell if this latest policy change will make a big difference to physicians considering an EHR. But the incentive program as a whole does seem to have physicians interested. A new survey from the Centers for Disease Control and Prevention found that 52% of office-based physicians report that they plan to take advantage of the new incentive payments. As for doctors who have already adopted some type of “basic” EHR, that number has climbed from 17% in 2008 to 34% this year.

Tell us what’s driving your decision to adopt an EHR in your practice? Take our poll:

— Mary Ellen Schneider

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An HHS Spin Job on Medicare Premiums?

On Thursday, officials from the  Health and Human Services department announced the premiums and deductibles that Medicare beneficiaries will pay in 2012. There were two main messages from those officials: that beneficiaries are paying less because utilization was down last year, and that the Affordable Care Act has had a role in bringing the costs down.

Courtesy Wikimedia Commons/jaqian/Creative Commons License

“The Affordable Care Act is helping to keep Medicare strong and affordable,” HHS Secretary Kathleen Sebelius said in a statement. “People with Medicare are seeing higher quality benefits, better health care choices, and lower costs. Health reform is also strengthening the Medicare Hospital Insurance Trust Fund and cracking down on Medicare fraud.”

“Thanks in part to the Affordable Care Act, people with Medicare are going to have more money in their pockets next year,” said Dr. Donald Berwick, administrator of Centers for Medicare and Medicaid Services, in the same statement. “With new tools provided by the Affordable Care Act, we are improving how we pay providers, helping patients get the care they need, and spending our health care dollars more wisely.”

These were a lot of bold statements that didn’t really seem to be backed up by any of the fact sheets put out by the agencies or in a briefing with reporters. Dr. Berwick said on the call that Medicare recipients had used less services in 2011 (the basis for 2012 premiums), but never gave a good explanation for why seniors had used less health services.

Even if a reporter had wanted to probe the point, he or she first had to hack through the thicket of numbers in the HHS press releases. The conference call itself was incredibly brief, leaving very little leeway to get at the root of the complicated issues that drive Medicare premiums and deductibles.

Officially, according to CMS, the hospital premium (Part A) will rise only $1 per month in 2012; the hospital deductible will rise $24 to $1,156.  Those coinsurances are shouldered by only about 1% of Medicare enrollees, though. Most have more than 40 quarters of pay in the system, and thus don’t pay Part A premiums.

The numbers on premiums for physician services were more confusing. According to CMS, the standard Part B monthly premium will be $99.90 in 2012, a $15.50 decrease from this year’s $115.40.  The majority of beneficiaries, however, for various reasons, paid only $96.40 per month in 2011. Thus, they’ll see a $3.50 increase.

But wait. The Part B premium, though, is based on annual income, so it’s hard to really give an average figure.

Part B premiums are calculated to cover one-fourth the cost of physician services, plus a contingency margin that is essentially equivalent to an insurer’s reserve.

This has nothing to do with health reform; it’s been a statutory requirement since, well, for a long time. And the contingency margin is always dependent on what happens with the Sustainable Growth Rate formula.

CMS assumes every year that the SGR will be overturned, so that calculation also has nothing to do with health reform.

For an administration that prides itself on transparency, it seems to have done little today to pull back the curtain on Medicare spending — even as Dr. Berwick said that transparency itself had led to lower costs.

— Alicia Ault (on Twitter @aliciaault)

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Pushing the Supercommittee: The Policy & Practice Podcast

The AMA launched a multi-million dollar ad campaign to push for an SGR fix now. Courtesy AMA

As the Joint Select Committee on Deficit Reduction, or the Supercommittee, works behind closed doors to find more than a trillion dollars in debt reductions, the American Medical Association is pulling out all the stops to get a permanent fix to the Sustainable Growth Rate Formula on the agenda. Whether the committee chooses to address the SGR issue, they have until Nov. 23 to get their recommendations out.

Meanwhile, the Obama administration has awarded nearly $300 million in scholarships and loan repayment to physicians willing to spend two to four years working in rural communities. The initiative is aimed at boosting the physician workforce shortage in under-served areas.

For more on that, take a listen this week’s Policy & Practice Podcast.

Stop in next week to hear more about the legal wranglings of the Affordable Care Act and physician pay concerns.

– Frances Correa (@FMCReporting)

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Fighting Over the SGR: The Policy & Practice Podcast

The Medicare Payment Advisory Commission (MedPAC) is recommending that Congress throw out the Sustainable Growth Rate (SGR) formula currently used in setting Medicare physician payments. Under that formula, physicians are due to have their Medicare payments cut by about 30% on Jan. 1. But while doctors are unanimous in their loathing of the SGR, there are differing opinions about how to solve the problems with how Medicare pays physicians.

Courtesy Wikimedia Commons/Psychonaught/Creative Commons License

Check out the Policy & Practice podcast to hear how MedPAC wants to pay for its SGR fix and what objections physician groups are raising about the plan. This week’s podcast also features news on the Institute of Medicine’s recommendations on what should be included in an essential package of health insurance benefits for health plans operating in the state health insurance exchanges in 2014.

Take a listen:

Join us next week as we follow the deliberations of the Joint Select Committee on Deficit Reduction and what it means for Medicare and other health programs.

— Mary Ellen Schneider  (@MaryEllenNY)

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President Talks Medicare Cuts: The Policy & Practice Podcast

Courtesy The White House

President Obama released his plan to cut the deficit and Medicare is being asked to help pay the piper. His plan also gives additional power to the unpopular Independent Payment Advisory Board,  an appointed body that will be charged with cutting Medicare spending.

In other Medicare news, the Medicare Payment Advisory Commission gave more details on its plan to replace the Sustainable Growth Rate formula. Radiologists and the American College of Physicians came out against the plan, which freezes payments to primary care for the next decade.

For more on that and details about yet another court hearing on the Affordable Care Act, listen to this week’s Policy & Practice Podcast.

Stay tuned next week for updates on potential Supreme Court action on the health law and more.

—Frances Correa (@FMCReporting on Twitter)

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