American Society of Hematology

MedPAC Considers Proposal to Restructure Medicare Physician Payment; ASH Strongly Opposes Having Specialist Payment Offset Costs

Published on: October 06, 2011

Today is the start of a Medicare Payment Advisory Commission (MedPAC) meeting to address a proposal to restructure Medicare physician payment calculations. MedPAC is the advisory committee to the Congress concerning Medicare policy and has been developing a proposal to not only provide a reform of the flawed physician payment system, but to also identify ways to pay for the expensive correction. (The $300 billion estimated cost of a physician payment fix over 10 years is a huge barrier to changing the formula at a time when a joint congressional committee is digging into entitlement programs in a search for ways to trim the deficit.)

The advisory panel is scheduled to vote on a set of recommendations to replace the SGR formula at a cost of about $200 billion over 10 years. Scrapping the formula would end the current system of physician reimbursement that tries to recoup physician outlays that exceed certain yearly spending targets by making ever-larger payment cuts.

The MedPAC proposal would freeze payments for primary care doctors and also cut specialist reimbursements by six percent for three years and then freeze them. In addition, MedPAC is looking at a grab bag of other ideas, with impacts on hospitals, home health patients and agencies, durable medical equipment, drugmakers and skilled nursing facilities

MedPAC has no real power to get its recommendations implemented and, historically, MedPAC has been a low-key panel that debates enormously complex health policy issues in relative obscurity. But the commissioners are finding themselves in the middle of a firestorm in recent months. Congress asked for MedPAC’s advice specifically on a fix for the physician pay formula, and MedPAC’s ideas are frequently mentioned in various deficit cutting proposals.

ASH joined with the physician community in strongly criticizing the MedPAC plan as soon as it was unveiled. Last week ASH and more than 40 specialty physician groups sent the advisory committee a letter outlining concerns and opposition.

From ASH’s perspective, the problem with the MedPAC plan is that it retains many of the current system's faults, undermines physicians' ability to take part in changes in Medicare payment and delivery systems and "calls for payment rates that the commission itself has previously said could reduce Medicare beneficiaries' access to medical care."

A longer list of potential offsets for the cost of the physician payment fix has been identified by other groups, including the so-called Senate Gang of Six and ASH believes MedPAC should tell Congress to consider these proposals rather than offering up a new package that magnifies the size of provider and beneficiary sacrifices. Most significantly, ASH objects to the plan using specialist payments to subsidize primary care payments because it only "robs Peter to pay Paul."

ASH members are strongly encouraged to join the Society's advocacy campaign to urge Congress to repeal the current payment formula, prevent the 30 percent cut scheduled to begin in January, and to provide adequate physician payment in the future.

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