The ACP Advocate Blog

by Bob Doherty

Thursday, July 2, 2009

Obama uses regulatory authority to give raise to primary care doctors

Yesterday, the Obama administration began to deliver on its promise to improve payments to general internists and other primary care physicians.

A proposed rule released yesterday by the Centers for Medicare and Medicaid Services would make major revisions in Medicare payment policies that "Taken together ... would increase [total Medicare] payments to general practitioners, family physicians, internists, and geriatric specialists by between 6 and 8 percent (before taking into account the proposed update and other proposed changes to the fee schedule)," according to the agency's press release. This shift occurs because the administration proposes changes in the Medicare relative values units (RVUs) for physician work, practice expenses, and medical liability expenses that generally are favorable to primary care, although some surgical and medical specialties also would benefit from the changes. CMS proposes to update the practice expense relative values to use the latest data on physician practice costs from a new AMA survey; this survey, which was co-sponsored by ACP and other specialty societies, show that internists' practice expenses are much higher than CMS previously had assumed.

This change alone would increase total Medicare allowed payments to general internists by 4 percent. Internists would also benefit from changes in the physician work RVUs (another 1 percent) and malpractice RVUs (another 1 percent) for a 6 percent total gain. In aggregate, total allowed Medicare payments to general internal medicine would increase by an estimated $10,061,000, according to CMS, more than any other specialty. (On a percentage basis, some specialties come out higher than general IM, but IM does the best in total dollars because the specialty starts with more Medicare allowed charges than others.)

Not all physicians will be cheering CMS's moves -- by law, changes in RVUs are budget neutral. The agency proposes a big cut in payments for imaging procedures, which would result in deep cuts to cardiologists and radiologists. It also proposes to eliminate the policy of paying for consultations at a higher rate than other initial hospital visits; these dollars would be redistributed to non-consultation visit codes. Many internal medicine subspecialists will likely object to eliminating the distinction between the work involved in consultations and the usual initial hospital visit.

Another change will win the applause of all doctors. The administration proposes to remove physician-administered drugs, like chemotherapy, from the definition of physician services under the Sustainable Growth Rate (SGR) formula. This would have the effect of reducing the negative updates (cuts) to physicians that are triggered whenever spending on physician services (which will no longer include the costs associated with physician-administered drugs) comes in higher than the allowable SGR target. It will also reduce the budget cost to Congress of enacting a long-term solution to the SGR problem by incorporating these costs into the Medicare baseline. ACP, the AMA, and other physician groups had long argued for removal of drugs from the SGR formula.

Public comments on the proposed rule will be accepted through August 31. The Medicare payment changes proposed by CMS, if included in the final rule following public comment, would go into effect on January 1, 2010. ACP will be analyzing the proposed rule, and will seek input from internists, generalists and subspecialists alike.

While ACP may not end up agreeing with every aspect of the proposed rule, it is a very positive sign that the Obama administration has decided not to wait for Congress to begin re-aligning Medicare payment policies toward primary care. Any changes that Congress may subsequently enact, such as providing a primary care bonus payment, would be on top of the new payment scale proposed by CMS.

Another indication of the administration's interest in primary care is that Dr. Fred Ralston, ACP's President-elect and a practicing general internist from Fayettsville, TN, and I will be participating in a primary care roundtable, hosted today by Nancy Ann Deparle, director of the White House Office of Health Care reform, at the White House. You can watch the proceeding via streaming video from 2 p.m. to 3:30 today, EDT.

Today's question: Do you agree that these proposed new policies show that the Obama administration is serious about improving payment for primary care?


Blogger Jay Larson MD said...

Understanding, yes. Serious, no. The S.S. Primary Care is going down. Rather than letting primary care drown outright, PFDs (Personal Floatation Devices) are being passed out. Hopefully rescue boats will get there before primary care freezes to death in the fridge waters.

July 6, 2009 at 9:31 AM  
Blogger DrJHO7 said...

Today's question: Do you agree that these proposed new policies show that the Obama administration is serious about improving payment for primary care?
I think it shows that the White House has taken notice of the problem. As a result, they have tossed primary care physicians a bone.
This might make things right if primary physicians functioned at the level of say, a labrador retriever. But...
In the 6/25 edition of NEJM, Steinbrook's Perspective article on "Easing the Shortage in Adult Primary Care" points out correctly that it's not all about the money -it isn't. But, he points out that "typical incomes for radiologists and orthopedic surgeons...approach three times those in primary care." Medical students notice things like that, as might be deduced from the fact that radiology and orthopedics are hotly competitive residencies to get into, attracting the best and the brightest.
A 99213 visit in the internal medicine office pays slightly more than 60 dollars under medicare. A 6% increase would be 3 dollars and sixty cents more for that 15-20 minute office visit.
Steinbrook points out further, that the difference in income between procedural based specialists and primary care physicians spread out over a 35-40 year career is about a 3.5 million dollar gap. Medical students view this return on investment for the debt burden they endure for their medical education as not worthy of further consideration, in most cases, when it comes to dedicating themselves to a career in family medicine or internal medicine.
Last night as I watched the movie "Independence Day", I thought about how a government responds to a crisis. When it comes to primary care medicine in the USA, we'll get to see the non-Hollywood version of this in a couple more years. It should be interesting.

July 6, 2009 at 9:10 PM  
Blogger Walter Liebkemann said...

This comment has been removed by the author.

July 9, 2009 at 1:35 PM  

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Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

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