Medicare Fee Change Could Help Save Primary Care
A prominent Medicare expert is proposing a radical change in the way doctors get paid that would shift money from highly compensated specialists to much lower-paid primary care physicians. It's a great idea, although one that might trigger World War III between doctors and the government. Still, a key provision in the Affordable Care Act could help transform this idea into reality, regardless of how much pressure is brought to bear on Congress.
The expert is Robert Berenson, vice chair of the Medicare Payment Advisory Commission (MedPAC) and a former top official at the Centers for Medicare and Medicaid Services (CMS). While MedPAC is purely an advisory body that Congress often ignores, the Independent Payment Advisory Board that the reform law creates will have much more power in formulating Medicare payment policies. If this new commission heeds Berenson, it could actually implement his proposal unless Congress deliberately overrides it.
In a recent paper, Berenson points out that distortions in Medicare's weighting of various healthcare services have led to the overpricing of some services and the underpricing of others. For example, he says, imaging tests tend to be overvalued, while office visits are undervalued. What this means is that the underlying resources required in terms of physician labor, staff costs, and other expenses do not match the fees that Medicare pays for those services. And, because private payers tend to follow the Medicare fee schedule, these relative payment levels affect the entire healthcare system.
The distorted valuation of different services has helped create an imbalance between primary care and specialty reimbursement. Today, specialists make twice as much on average, as primary care doctors, because procedures and tests are much better reimbursed than office visits are.
Naturally, specialists are determined to keep it that way. An AMA committee known as the RUC, representing 29 different specialty societies, recommends how Medicare should weigh the "work component" that is used in determining the fee for each service. But the RUC process has been anything but objective, Berenson notes.
MedPAC's assessment of the RUC-driven review and update process found that it was disproportionately flagging potentially undervalued services, leading to increased payment rates for many services without commensurate reductions in others. MedPAC concluded that CMS relied too heavily on self-interested specialty societies and the RUC to identify mis-valued services and offered alternatives to improve the process.
After the MedPAC report came out, the AMA and the specialty societies made some changes in the RUC process. But they continue to resist MedPAC's recommendation that objective surveys of resource costs replace the specialty societies' own biased surveys, which often supply "inflated" data, says Berenson. Better information could be directly obtained, he says, "from administrative data maintained by hospitals, group practices and health plans with their own delivery systems."
This might seem like a small step. But, because of the leverage it would create, this would be a giant step toward controlling health costs and supporting primary care. Only when we pay what services are really worth will we have the makings of a workable healthcare system.
Image supplied courtesy of Wikimedia Commons.
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