October 6, 2011 — The Medicare Payment Advisory Commission (MedPac) today voted 15 to 2 to recommend a "doc fix" for the Medicare reimbursement crisis that organized medicine views as the makings of another crisis.
The MedPac plan, which requires Congressional approval, would repeal the hated sustainable growth rate (SGR) formula for setting physician reimbursement and avert an SGR-triggered pay cut of 29.5% on January 1. To offset the estimated $300 billion price of this "doc fix," as it is called on Capitol Hill, MedPac recommends freezing reimbursement rates for primary care physicians for 10 years while cutting rates for specialists by 5.9% for 3 straight years, followed by zero growth during the next 7 years.
Pinching Medicare rates this way would raise roughly $100 billion toward financing the doc fix. MedPac comes up with another $235 billion in proposed cuts to Medicare Part D drug plans, post–acute care facilities, hospitals, laboratories, suppliers of durable medical equipment, Medicare Advantage plans, and other providers, along with reduced benefits for seniors.
The commission recommended this package of measures despite dire warnings from organized medicine that the proposed cut-and-freeze approach to rates would drive many of their members out of Medicare and jeopardize access to care for seniors. Medical societies have routinely predicted the same scenario if SGR-triggered pay cuts were to take effect.
In an October 3 letter to MedPac, the American Medical Association (AMA) and 42 other medical societies pointed out that since 2001, Medicare reimbursement rates have increased by 4%, but practice costs have grown 6 times as fast, at 24%. The commission's reimbursement proposal, they argued, would put physicians further in the hole as practice costs continue to rise, making it harder for them to invest in the kind of care coordination, chronic disease management, and quality improvement envisioned in healthcare reform.
Compounding the payment cuts proposed by MedPac are other Medicare policies that could reduce physician reimbursement, according to the medical societies. Some of those could take the form of penalties for not reporting quality measures to the Centers for Medicare and Medicaid Services or for not adopting electronic health record technology, both of which require physician investment.
Peter Carmel, MD |
The medical societies have argued that instead of asking physicians to make unreasonable sacrifices, Congress could finance a doc fix with other budget offsets already identified by the Congressional Budget Office, the Senate "Gang of Six," and the presidential deficit reduction commission.
Another Rift Between Primary Care Physicians and Specialists
Organized medicine was quick to repeat its criticism of the MedPac plan after today's decision.
"The AMA strongly opposes the Medicare physician payment recommendation voted on today by MedPAC," said AMA President Peter Carmel, MD, in a press release. "Offsetting part of the cost of [the SGR formula] repeal through drastic cuts and long-term freezes to physicians falls far short of what is needed to preserve patients' access to care. The recommendation voted on today by MedPAC flies in the face of their previous recommendations to stop harmful physician cuts that threaten access to care for patients."
Dr. Jack Lewin |
Jack Lewin, MD, chief executive officer of the American College of Cardiology, said the MedPac proposal "is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship."
"Looming primary care shortages require focused solutions, we agree," Dr. Lewin said in a press release. "But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes."
Dr. Lewin's remarks reopen a traditional rift between primary care physicians and their specialist kin about who is getting a fair shake in Medicare reimbursement policy. The MedPac plan places most of the financial sacrifice on specialists, because the services subject to 3 straight years of cuts account for 92% of Medicare spending on physician services.
The MedPac proposal could become fodder for the Congressional Joint Select Committee on Deficit Reduction, the so-called super committee, which is tasked with recommending $1.5 trillion in savings that Congress must enact by December 23. Organized medicine is lobbying the super committee to repeal the SGR formula, but not pay for it MedPac-style.
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