For many, many years, organized medicine has fought tooth and nail to preserve the Medicare fee-for-service (FFS) payment system. The battlegrounds have been over the procedure codes that define each service and the AMA’s ownership of the codes (CPT), the relative values assigned to each procedure code (and who and how those values are determined—including the role of the RUC), geographic adjustments in practice costs and wages, of course, the annual fight over payment cuts resulting from Medicare’s sustainable growth rate (SGR) formula.
So it is truly remarkable that last week, organized medicine essentially called for the end to Medicare FFS. Not right away, mind you, but over the next decade. In their respective statements for the record of a May 5 hearing by the House Energy and Commerce Committee, the American Medical Association (AMA), American College of Physicians (ACP), American Academy of Family Physicians (AAFP), American College of Surgeons (ACS), and American Osteopathic Association (AOA) called for a staged process that would result in the current Medicare FFS system being replaced with new, value-based payment models.
Frances Correa with International Medical News Group reports that, “Although the groups’ approaches to an SGR fix vary, their plans share some similarities: a full repeal of the SGR and creation of a new payment model that break away from a “once size fits all” model. They also suggest a 4-5 year transition period in which physicians can participate in the new payment plan on a voluntary basis. Additionally, they call for a transition to value-based payment systems and increased emphasis on patient-centered medical homes. The ACS, the AAFP, and the ACP all specifically include the need for higher reimbursements for primary care in their plans.”
ACP, in its statement to the committee, proposed a comprehensive, step-by-step plan to transition from the SGR formula and fee-for-service payments to broad adoption of new models to align incentives with better value for patients:
“Stage 1: 2012-2016, Medicare would stabilize and improve payments under the current Medicare fee schedule by eliminating the sustainable growth rate (SGR) as a factor in establishing annual updates and by ensuring higher payments and protection from budget neutrality cuts for undervalued evaluation and management services. Also, during this stage, physicians who voluntarily participate in specific, designated Physician Payment Innovation Initiatives—including Patient-Centered Medical Homes, Accountable Care Organizations, and other models that meet ACP’s suggested criteria for value to patients—could qualify for appropriately higher payments.
Then, during stage 2, beginning in 2016, physicians would be given a set timetable to transition their practices to the models that Congress and the Department of Health & Human Services (HHS) has determined to be most effective based on experience with the payment initiatives evaluated during stage 1, leading to permanent replacements to the existing Medicare payment system.”
The fact that organized medicine is united on wanting to get rid of the SGR is nothing new. But it is big news that the leading physician professional membership societies now understand that it is not a winning strategy to ask Congress to pump hundreds of billions of taxpayer money into reversing the SGR cuts unless it leads to a “permanent, sustainable solution to the Medicare physician payment problem” that “reduces spending, pays providers fairly, and pays for services according to their value to the beneficiary” as the House Energy and Commerce committee wrote in its March 28 request to the physician groups for their ideas.
Getting from the current flawed FFS system to models that pay for services according to the value will be daunting. For all of the problems with FFS, it is the system that most physicians and patients are used to, and as I blogged about a few weeks ago, given the history of other failed policy interventions, skepticism trending toward cynicism is a perfectly justifiable reaction from internists to the new alphabet soup of unproven payment models.
But the alternative is fighting to hold onto a FFS payment system that is broken, and like Humpty Dumpty, can’t be put back together again.
Today’s question: Do you support the call by organized medicine and Congress for a transition to new payment models that pay for services according to their value to the patient?