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Physicians push for fee schedule fix.

WASHINGTON -- Doctors will see a 4.4% cut in their Medicare fees under rules announcing next year's fee schedule, unless legislation pending in Congress supersedes those rules. Mark D. McClellan, M.D., administrator of the Centers for Medicare and Medicaid Services, announced the fee cut in a press teleconference.

"Medicare beneficiaries rely upon their physicians not only for quality health care, but also for access to other parts of the Medicare program," C. Anderson Hedberg, M.D., president of the American College of Physicians, said at a press briefing sponsored by the organization, the American Academy of Family Physicians, and the American Osteopathic Association.

"The House and Senate must understand the importance of this issue," which could propel a setback in national health care quality, Dr. Hedberg added. The ACP, along with AAFP and the AOA, "look forward to working with Congress to maintain access to physician services for the millions of beneficiaries participating in the Medicare program."

At press time, Congress was addressing the issue. The Senate had passed a budget-reconciliation package containing several provisions on pay for performance, sponsored by Sen. Charles E. "Chuck" Grassley (R-Iowa), as well as a yearlong, 1% Medicare pay increase for physicians. Legislation by the House of Representatives did not address the pay cut.

In announcing the final rule on the 2006 fee schedule, Dr. McClellan clarified that the 1% increase contained in the Senate legislation "would link to creating a pay-for-performance fund for physician services. While we have not endorsed that approach and think that in the short term, it may be better to get more quality reporting in place effectively, we definitely want to work with interested members [of Congress] on payment reform for physicians in 2006," he told reporters.

Mary Frank, M.D., AAFP board chair, said the hope is that the budget-reconciliation package will incorporate the 1% increase with provisions from Rep. Nancy Johnson's (R-Conn.) pay-for-performance bill, which also would repeal the sustainable growth rate (SGR) and base future payments on the Medicare Economic Index.

The SGR is driving the cut in Medicare physician pay, as it determines the conversion factor update each year.

Several medical organizations, such as the AAFP and Medical Group Management Association, oppose the "value-based purchasing" pay-for-performance bill sponsored by Sen. Grassley, which would link 2% of physician Medicare payments to reporting of quality data and progress toward quality and efficiency measures but would not fix the SGR.

Sen. Grassley's program is voluntary, but those choosing not to report quality data would have a 2% reduced payment update, said Larry S. Fields, M.D., president of the AAFP, at the press briefing.

Value-based measures require physicians to deliver more services, Michael Maves, M.D., executive vice president of the American Medical Association, recently wrote in a letter to Sen. Grassley. "Under the SGR, more physician services will result in a series of severe cuts, compounding current problems. This would make future SGR reforms more expensive."

On the surface, pay for performance sounds good, because it would force physicians to meet certain standards, Daniel Siegel, M.D., told this newspaper. Dr. Siegel of Smithtown, N.Y., represents the American Academy of Dermatology on the AMA Resource-Based Relative Value Update Committee. The problem, he said, is that "we're not sure those measures are all that valuable."

The Medicare physician-fee schedule was the subject of much debate at the interim meeting of the AMA's House of Delegates. The AMA's support for any type of pay for performance or other type of quality reporting program "is dependent on stopping the Medicare pay cuts," AMA president J. Edward Hill, M.D., said at the meeting.

In a resolution, the House of Delegates asked the organization to advocate for a repeal of the SGR without compromising the organization's principles on pay for performance. "While external forces work to link pay for performance to physician payments, we assert that pay for performance is incompatible with the SGR," Jack Armstrong, M.D., of the AMA's Board of Trustees, said during House floor debate.

This resolution will enable the AMA to continue its aggressive campaign to protect Medicare patients without compromising its pay-for-performance principles, he said.

"Pay for performance should be about quality of care. Until we establish a practice environment where physician payments match practice costs, pay for performance won't work," Dr. Armstrong, the AMA trustee, told reporters.

The 1% Medicare pay increase is a start, but Congress should be looking for a permanent fix to the payment problem, not a temporary one, as this reconciliation bill proposes, Dr. Armstrong said.

The AMA's member societies have been divided on whether to link the pay-for-performance issue to the Medicare physician fee schedule. It's a question of what physicians are willing to ultimately accept, William Golden, M.D., ACP delegate to the AMA, said in an interview.

The ACP has concerns about implementing performance reporting "but is willing to accept its concept in order to avoid the SGR cuts," Dr. Golden said, adding that there are certain higher-earning specialty societies within the AMA that would take the impending 4.4% hit to their paychecks as a concession for not having to comply with any performance measures.

In announcing the fee schedule, Dr. McClellan insisted Medicare did not have the authority to change the way the fee schedule is calculated. In response, the AMA's Board of Trustees said that CMS had failed to meet its obligations to ensure Medicare patients' access to quality care, by refusing to administratively adjust the SGR.

Joyce Frieden, Associate Editor for Practice Trends, contributed to this report.


Associate Editor, Practice Trends
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Author:Lubell, Jennifer
Publication:Internal Medicine News
Date:Dec 1, 2005
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