WASHINGTON – By implementing a series of payment reforms now – and adopting MedPAC’s recommendations on replacing the SGR – Congress can fix the Medicare physician pay problem and come closer to paying for it, too.
That’s the bottom line of the March 2012 Report to Congress from the Medicare Payment Advisory Commission (MedPAC), released March 15.
While the recommended cuts may cause some physicians to wince, according to Mark Miller, the blow would be much harder if Congress allows the nearly 30% physician pay cut called for by the Medicare Sustainable Growth Rate formula to go through, Mr. Miller, MedPAC executive director, said at the press conference.
The MedPAC report – on of two Congress requires the group to produce each year – repeats the SGR replacement recommendationsthe commission made last October. Key among those recommendations was freezing most Medicare payments to primary care physicians for 10 years and cutting specialists’ payments by 17% over 3 years, followed by a freeze for 7 years more.
"That’s hard medicine," Mr. Miller said at the press conference. "But one of the things that it does is it reduces the cost of the fix."
MedPAC estimates their recommendations will bring the price tag of repealing the SGR to approximately $200 billion. He added that while Medicare reimbursement would go down under their proposal, historical trends show that the volume of services would go up, increasing their overall net pay.
To pick up another $60 billion to $65 billion in savings, the MedPAC March report lists 29 recommended program and policy changes.*
Key among the changes:
• Freeze payments to skilled nursing facilities in 2013, then cut them by 4% in 2014.
• Equalize payments for office-based and hospital outpatient services. Currently, Medicare pays nearly 80% for certain services when they are provided in a hospital outpatient setting vs. the physician’s office, the report said.
"If the fee schedule assumes that something takes 35 minutes ... and the efficient physician is knocking it off in 15 minutes, then the Medicare program is systematically overpaying for that service," Mr. Miller said. The idea, he said, is to promote a more equal pay between specialty and primary care services.
• Modify Medicare Part D low-income subsidies to favor more generic drugs in certain therapeutic classes.
Mr. Miller added that protecting and encouraging expansion in primary care is the commission’s top priority, one that is not perpetuated through the current payment system.
"There continues to be this concern in the commission that the fee schedule is imbalanced, that it favors procedural services and it undervalues cognitive visit-based [evaluation and management] type of services," Mr. Miller said.
While Congress has yet to solve the SGR problem, Mr. Miller said that the MedPAC commissioners recognize that lawmakers face a seemingly insurmountable challenge.
"The biggest reason that Congress doesn’t move forward on this issue is that it costs $300 billion ... it’s a big cost."
*Correction 3/29/12: A previous version of this story reported an incorrect dollar amount of savings through recommended program and policy changes.