CMS Proposes to Shift More Money to Primary-Care Doctors

Last Updated Jul 1, 2009 9:15 PM EDT

Initial reaction from the nation's medical societies to CMS' proposal to shift money from specialists to primary-care physicians in 2010 was surprisingly muted. The AMA, which has opposed any such reallocation of Medicare reimbursement, applauded CMS' announcement that it intends to remove the cost of physician-administered drugs (mostly used in cancer care) from the reimbursement formula, but didn't mention the redistribution of payments.

One society that did react strongly was the American College of Cardiology. In a statement, ACC President Alfred C. Bove, MD, said, "The American College of Cardiology is shocked that CMS has proposed to cut payments to cardiology services by 11 percent in a single year. These proposed cuts are based on the incorporation of a few esoteric pieces of data into a complex formula. The focus on this formula completely ignores the very important issues of access that are certain to be created by these huge slashes in payment. Services that have improved countless lives by diagnosing and treating cardiovascular disease are scheduled to have payment cuts in the range of 25 to 42 percent."

While it wasn't immediately clear how much reimbursement of other specialties will be cut, CMS said that the proposals it announced today would raise Medicare payments to GPs, family physicians, general internists, and geriatric specialists by 6 to 8 percent in 2010. A final rule is expected on Nov. 1, 2009.

The extra funds earmarked for primary care will come from three sources: changes in the practice expense component of the formula used to calculate physician fees; changes in how Medicare recognizes the cost of malpractice insurance in the payment formula; and the elimination of payments for "consulting codes." The latter are "typically billed by specialists and are paid at a higher rate than equivalent evaluation and management (E/M) services," CMS said in a press release. "Practitioners will use existing E/M service codes when providing these services instead. Resulting savings would be redistributed to increase payments for the existing E/M services." Since E/M services are the bread and butter of primary care physicians, this move clearly is intended to increase their reimbursement.

But the ACC reserved most of its ire for the "practice expense data" that CMS used as a basis for its proposed cuts in cardiology reimbursement. Calling the data "shoddy and incomplete," the ACC suggested that CMS may have broken the law in using it to compute its payments. What's puzzling about this is that CMS is proposing to include data about physicians' practice costs from a new survey, the Physician Practice Information Survey, which was designed and conducted by the AMA, the umbrella group for all of the specialties.

Looking at the larger picture, it's clear that the Obama Administration has decided to favor primary-care physicians over specialists in order to boost the nation's primary-care base, which has been shrinking in recent years. One reason for this decline is that specialists make twice as much as primary-care doctors, on average, so fewer young doctors are going into generalist fields.

Specialists will argue that they should earn more than primary-care doctors, because they have more training than the latter do and take a greater risk when they perform complicated procedures. On the other hand, some experts say that a plenitude of primary care is essential to high-quality, cost-efficient medicine. If so, Americans would benefit if we had more primary-care physicians, even if specialists earned less.

  • Ken Terry

    Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform.