Jennifer Lubell

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, “to improve voluntary quality reporting to congressional leadership,” AMA Chair Duane M. Cady said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from AMA Vice President Michael Maves to the state medical associations and national specialty societies.

Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health, cosigned the agreement.

If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing about 140 physician measures covering 34 clinical topics by the end of 2006.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. “For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies.” To date, the consortium has developed more than 90 evidence-based performance measures, he said.

The consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The alliance is receiving funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the consortium, among others. The pilot is crucial, as it will bring to the surface any “unintended consequences,” Dr. Nielsen said. Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures “to cover a majority of Medicare spending for physician services,” the agreement said.

Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

As far as Dr. Cady is concerned, nothing in the agreement with the congressional leaders should be a surprise. “It involved only [those] commitments we had previously outlined to our specialty society colleagues.”

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

“This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it,” Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. “Not everyone is ready for [pay for performance].”

While many primary care quality measures have been written, it's a different story for subspecialties, “because their measures haven't even been developed yet. They're starting from ground zero,” she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she said.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. “Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all.”

At the press briefing, Dr. Nielsen said “this is a dustup about nothing,” adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is “very difficult” to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, “either individually or through the Council of Medical Specialty Societies,” he said. “I too share the concerns of others that the data will be weak and then be used to penalize doctors' reimbursement.”

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

“Could the AMA [have] been more communicative about this agreement? Probably.” Yet some of these specialty societies may be misinterpreting its terms, he said.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. “While those concerns are valid, it isn't going to come to that.” What these groups need to remember is that the AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

“People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated,” he said.

He also doesn't believe the performance goals set by the agreement are insurmountable. Ninety measures have already been developed, he said. “If every specialty society creates one measure, we would get pretty close to that goal of 140 measures by the end of the year.”

The American College of Physicians, in the meantime, wants to move even more quickly than the AMA on measure development, voluntary reporting, and pay for performance, Robert B. Doherty, the college's senior vice president for governmental affairs and public policy, said in an interview.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMs' perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The physician voluntary reporting program isn't about developing measures, it's about testing systems “on how well we can use the existing claims-based system to capture the data from the measures,” he said. The agency is testing the system on a voluntary basis to make sure it can function in a manner that works for both providers and the Medicare program, and ultimately for the beneficiaries when CMS reports the data.

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, “to improve voluntary quality reporting to congressional leadership,” AMA Chair Duane M. Cady said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from AMA Vice President Michael Maves to the state medical associations and national specialty societies.

Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health, cosigned the agreement.

If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing about 140 physician measures covering 34 clinical topics by the end of 2006.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. “For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies.” To date, the consortium has developed more than 90 evidence-based performance measures, he said.

The consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The alliance is receiving funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the consortium, among others. The pilot is crucial, as it will bring to the surface any “unintended consequences,” Dr. Nielsen said. Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures “to cover a majority of Medicare spending for physician services,” the agreement said.

Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

As far as Dr. Cady is concerned, nothing in the agreement with the congressional leaders should be a surprise. “It involved only [those] commitments we had previously outlined to our specialty society colleagues.”

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

“This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it,” Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. “Not everyone is ready for [pay for performance].”

While many primary care quality measures have been written, it's a different story for subspecialties, “because their measures haven't even been developed yet. They're starting from ground zero,” she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she said.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. “Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all.”

At the press briefing, Dr. Nielsen said “this is a dustup about nothing,” adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is “very difficult” to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, “either individually or through the Council of Medical Specialty Societies,” he said. “I too share the concerns of others that the data will be weak and then be used to penalize doctors' reimbursement.”

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

“Could the AMA [have] been more communicative about this agreement? Probably.” Yet some of these specialty societies may be misinterpreting its terms, he said.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. “While those concerns are valid, it isn't going to come to that.” What these groups need to remember is that the AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

“People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated,” he said.

He also doesn't believe the performance goals set by the agreement are insurmountable. Ninety measures have already been developed, he said. “If every specialty society creates one measure, we would get pretty close to that goal of 140 measures by the end of the year.”

The American College of Physicians, in the meantime, wants to move even more quickly than the AMA on measure development, voluntary reporting, and pay for performance, Robert B. Doherty, the college's senior vice president for governmental affairs and public policy, said in an interview.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMs' perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The physician voluntary reporting program isn't about developing measures, it's about testing systems “on how well we can use the existing claims-based system to capture the data from the measures,” he said. The agency is testing the system on a voluntary basis to make sure it can function in a manner that works for both providers and the Medicare program, and ultimately for the beneficiaries when CMS reports the data.

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, “to improve voluntary quality reporting to congressional leadership,” AMA Chair Duane M. Cady said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from AMA Vice President Michael Maves to the state medical associations and national specialty societies.

Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health, cosigned the agreement.

If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing about 140 physician measures covering 34 clinical topics by the end of 2006.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. “For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies.” To date, the consortium has developed more than 90 evidence-based performance measures, he said.

The consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The alliance is receiving funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the consortium, among others. The pilot is crucial, as it will bring to the surface any “unintended consequences,” Dr. Nielsen said. Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures “to cover a majority of Medicare spending for physician services,” the agreement said.

Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

As far as Dr. Cady is concerned, nothing in the agreement with the congressional leaders should be a surprise. “It involved only [those] commitments we had previously outlined to our specialty society colleagues.”

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

“This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it,” Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. “Not everyone is ready for [pay for performance].”

While many primary care quality measures have been written, it's a different story for subspecialties, “because their measures haven't even been developed yet. They're starting from ground zero,” she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she said.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. “Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all.”

At the press briefing, Dr. Nielsen said “this is a dustup about nothing,” adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is “very difficult” to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, “either individually or through the Council of Medical Specialty Societies,” he said. “I too share the concerns of others that the data will be weak and then be used to penalize doctors' reimbursement.”

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

“Could the AMA [have] been more communicative about this agreement? Probably.” Yet some of these specialty societies may be misinterpreting its terms, he said.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. “While those concerns are valid, it isn't going to come to that.” What these groups need to remember is that the AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

“People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated,” he said.

He also doesn't believe the performance goals set by the agreement are insurmountable. Ninety measures have already been developed, he said. “If every specialty society creates one measure, we would get pretty close to that goal of 140 measures by the end of the year.”

The American College of Physicians, in the meantime, wants to move even more quickly than the AMA on measure development, voluntary reporting, and pay for performance, Robert B. Doherty, the college's senior vice president for governmental affairs and public policy, said in an interview.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMs' perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The physician voluntary reporting program isn't about developing measures, it's about testing systems “on how well we can use the existing claims-based system to capture the data from the measures,” he said. The agency is testing the system on a voluntary basis to make sure it can function in a manner that works for both providers and the Medicare program, and ultimately for the beneficiaries when CMS reports the data.

Wisconsin Doctors Want Cap Back

Wisconsin doctors hailed the state assembly's passage of a bill from Rep. Curt Gielow (R) that would reinstate a cap on noneconomic damages at $750,000. The 10-year-old cap was overturned by the Wisconsin Supreme Court in 2005, “throwing Wisconsin's once envied medical liability system into turmoil,” according to a statement issued by the Wisconsin Hospital Association and the Wisconsin Medical Society. Following the dissolution of the cap, physicians have cancelled their recruiting visits to the state, and premiums for the Injured Patients and Families Compensation Fund have increased by 25%, the associations claimed. “Four awards have already exceeded the previous cap, the number of lawsuits in excess of $1 million [increased] by over 22%, and a stunning $8.4 million verdict was handed down in Dane County,” the statement said. “This bill helps doctors concentrate on what concerns them the most: caring for patients,” said Dr. Susan Turney, chief executive officer and executive vice president of the Wisconsin Medical Society. “It doesn't change the fact that injured patients are fully compensated for their economic losses yet helps to maintain access to health care in Wisconsin.” The state's high court had ruled that the cap was unconstitutional beyond a reasonable doubt. A similar bill has been introduced in the state Senate.

Hospital Ethnicity Data

Most hospitals collect data about the race, ethnicity, and language preference of their patients, but few are using the data to improve health care quality, according to a study that was conducted by the National Public Health and Hospital Institute. Researchers surveyed 500 acute care hospitals and found that half collect information on patients' language, more than three-fourths collect information on patients' race, and half collect information on patients' ethnicity and language preference. Of the hospitals that did not collect this information, more than half said that they did not see the need to. “We are encouraged to know that so many hospitals already have quality data that enable them to develop and monitor interventions to eliminate racial and ethnic disparities in health care,” said Marsha Regenstein, Ph.D., the study's lead author and director of NPHHI. “Our challenge now is to work with hospital staff to make sure they recognize the importance of this quality data and that they put the data to use immediately.” The study was supported by the Robert Wood Johnson Foundation.

Assessing Pay for Performance

More than 100 pay-for-performance programs were operating around the country as of last September, according to a new report from the Alliance for Health Reform. Members of Congress and the Bush administration also are exploring methods for testing pay for performance within the Medicare program, including Medicare's voluntary physician reporting program, which began earlier this year. So far, the private sector has taken the lead on pay for performance, according to the report. A prime example is the Bridges to Excellence program, sponsored by several large employers and operating in Cincinnati, Louisville, Ky., Massachusetts, and Albany/Schenectady, N.Y. The program is expanding into the District of Columbia/Maryland/Virginia area, Minnesota, and Georgia. The group offers payment incentives to high-performing physicians in the area of diabetes and cardiac care, and in the use of health information technology. But despite the success of the Bridges to Excellence model and some others, critics say that there are a number of unanswered questions. For example, proponents of pay for performance need to identify the size of the bonus or penalty needed to make a difference in quality, and to figure out what adjustments need to be made to payment systems across different medical specialties, according to the report.

Fighting Off Bad Bugs

Congress should be taking more aggressive steps to incentivize pharmaceutical and biotechnology industries to fight antibiotic resistance, physicians and other policy makers said during a press conference sponsored by the Infectious Diseases Society of America. The group released its “hit list” of the six most dangerous, drug-resistant microbes. “These are life-threatening drug-resistant infections, and we're seeing them every day,” explained Dr. Martin J. Blaser, IDSA president. “What is worse is that our ammunition is running out and there are no reinforcements in sight.” Another problem: “Some of better drugs are more toxic,” he said. Robert Guidos, director of public policy with IDSA, noted that Congress has not taken any action to support the implementation of new incentives for drug companies to develop stronger antibiotics. Market exclusivity—a method that has worked favorably in the past for pediatric drugs, would be an option, he said. So would calling for tax credits for the manufacture or distribution of these products. Another option would be to establish an independent commission to identify which drugs are more sufficient in combatting resistant microbes. “The superbugs are not waiting, and neither should we,” Dr. Blaser commented. The top “bad bugs” are methicillin-resistant Staphylococcus aureus; Escherichia coli and Klebsiella species; Acinetobacter baumannii; Aspergillus; vancomycin-resistant Enterococcus faecium; and Pseudomonas aeruginosa, according to the IDSA report.

Wisconsin Doctors Want Cap Back

Wisconsin doctors hailed the state assembly's passage of a bill from Rep. Curt Gielow (R) that would reinstate a cap on noneconomic damages at $750,000. The 10-year-old cap was overturned by the Wisconsin Supreme Court in 2005, “throwing Wisconsin's once envied medical liability system into turmoil,” according to a statement issued by the Wisconsin Hospital Association and the Wisconsin Medical Society. Following the dissolution of the cap, physicians have cancelled their recruiting visits to the state, and premiums for the Injured Patients and Families Compensation Fund have increased by 25%, the associations claimed. “Four awards have already exceeded the previous cap, the number of lawsuits in excess of $1 million [increased] by over 22%, and a stunning $8.4 million verdict was handed down in Dane County,” the statement said. “This bill helps doctors concentrate on what concerns them the most: caring for patients,” said Dr. Susan Turney, chief executive officer and executive vice president of the Wisconsin Medical Society. “It doesn't change the fact that injured patients are fully compensated for their economic losses yet helps to maintain access to health care in Wisconsin.” The state's high court had ruled that the cap was unconstitutional beyond a reasonable doubt. A similar bill has been introduced in the state Senate.

Hospital Ethnicity Data

Most hospitals collect data about the race, ethnicity, and language preference of their patients, but few are using the data to improve health care quality, according to a study that was conducted by the National Public Health and Hospital Institute. Researchers surveyed 500 acute care hospitals and found that half collect information on patients' language, more than three-fourths collect information on patients' race, and half collect information on patients' ethnicity and language preference. Of the hospitals that did not collect this information, more than half said that they did not see the need to. “We are encouraged to know that so many hospitals already have quality data that enable them to develop and monitor interventions to eliminate racial and ethnic disparities in health care,” said Marsha Regenstein, Ph.D., the study's lead author and director of NPHHI. “Our challenge now is to work with hospital staff to make sure they recognize the importance of this quality data and that they put the data to use immediately.” The study was supported by the Robert Wood Johnson Foundation.

Assessing Pay for Performance

More than 100 pay-for-performance programs were operating around the country as of last September, according to a new report from the Alliance for Health Reform. Members of Congress and the Bush administration also are exploring methods for testing pay for performance within the Medicare program, including Medicare's voluntary physician reporting program, which began earlier this year. So far, the private sector has taken the lead on pay for performance, according to the report. A prime example is the Bridges to Excellence program, sponsored by several large employers and operating in Cincinnati, Louisville, Ky., Massachusetts, and Albany/Schenectady, N.Y. The program is expanding into the District of Columbia/Maryland/Virginia area, Minnesota, and Georgia. The group offers payment incentives to high-performing physicians in the area of diabetes and cardiac care, and in the use of health information technology. But despite the success of the Bridges to Excellence model and some others, critics say that there are a number of unanswered questions. For example, proponents of pay for performance need to identify the size of the bonus or penalty needed to make a difference in quality, and to figure out what adjustments need to be made to payment systems across different medical specialties, according to the report.

Fighting Off Bad Bugs

Congress should be taking more aggressive steps to incentivize pharmaceutical and biotechnology industries to fight antibiotic resistance, physicians and other policy makers said during a press conference sponsored by the Infectious Diseases Society of America. The group released its “hit list” of the six most dangerous, drug-resistant microbes. “These are life-threatening drug-resistant infections, and we're seeing them every day,” explained Dr. Martin J. Blaser, IDSA president. “What is worse is that our ammunition is running out and there are no reinforcements in sight.” Another problem: “Some of better drugs are more toxic,” he said. Robert Guidos, director of public policy with IDSA, noted that Congress has not taken any action to support the implementation of new incentives for drug companies to develop stronger antibiotics. Market exclusivity—a method that has worked favorably in the past for pediatric drugs, would be an option, he said. So would calling for tax credits for the manufacture or distribution of these products. Another option would be to establish an independent commission to identify which drugs are more sufficient in combatting resistant microbes. “The superbugs are not waiting, and neither should we,” Dr. Blaser commented. The top “bad bugs” are methicillin-resistant Staphylococcus aureus; Escherichia coli and Klebsiella species; Acinetobacter baumannii; Aspergillus; vancomycin-resistant Enterococcus faecium; and Pseudomonas aeruginosa, according to the IDSA report.

Wisconsin Doctors Want Cap Back

Wisconsin doctors hailed the state assembly's passage of a bill from Rep. Curt Gielow (R) that would reinstate a cap on noneconomic damages at $750,000. The 10-year-old cap was overturned by the Wisconsin Supreme Court in 2005, “throwing Wisconsin's once envied medical liability system into turmoil,” according to a statement issued by the Wisconsin Hospital Association and the Wisconsin Medical Society. Following the dissolution of the cap, physicians have cancelled their recruiting visits to the state, and premiums for the Injured Patients and Families Compensation Fund have increased by 25%, the associations claimed. “Four awards have already exceeded the previous cap, the number of lawsuits in excess of $1 million [increased] by over 22%, and a stunning $8.4 million verdict was handed down in Dane County,” the statement said. “This bill helps doctors concentrate on what concerns them the most: caring for patients,” said Dr. Susan Turney, chief executive officer and executive vice president of the Wisconsin Medical Society. “It doesn't change the fact that injured patients are fully compensated for their economic losses yet helps to maintain access to health care in Wisconsin.” The state's high court had ruled that the cap was unconstitutional beyond a reasonable doubt. A similar bill has been introduced in the state Senate.

Hospital Ethnicity Data

Most hospitals collect data about the race, ethnicity, and language preference of their patients, but few are using the data to improve health care quality, according to a study that was conducted by the National Public Health and Hospital Institute. Researchers surveyed 500 acute care hospitals and found that half collect information on patients' language, more than three-fourths collect information on patients' race, and half collect information on patients' ethnicity and language preference. Of the hospitals that did not collect this information, more than half said that they did not see the need to. “We are encouraged to know that so many hospitals already have quality data that enable them to develop and monitor interventions to eliminate racial and ethnic disparities in health care,” said Marsha Regenstein, Ph.D., the study's lead author and director of NPHHI. “Our challenge now is to work with hospital staff to make sure they recognize the importance of this quality data and that they put the data to use immediately.” The study was supported by the Robert Wood Johnson Foundation.

Assessing Pay for Performance

More than 100 pay-for-performance programs were operating around the country as of last September, according to a new report from the Alliance for Health Reform. Members of Congress and the Bush administration also are exploring methods for testing pay for performance within the Medicare program, including Medicare's voluntary physician reporting program, which began earlier this year. So far, the private sector has taken the lead on pay for performance, according to the report. A prime example is the Bridges to Excellence program, sponsored by several large employers and operating in Cincinnati, Louisville, Ky., Massachusetts, and Albany/Schenectady, N.Y. The program is expanding into the District of Columbia/Maryland/Virginia area, Minnesota, and Georgia. The group offers payment incentives to high-performing physicians in the area of diabetes and cardiac care, and in the use of health information technology. But despite the success of the Bridges to Excellence model and some others, critics say that there are a number of unanswered questions. For example, proponents of pay for performance need to identify the size of the bonus or penalty needed to make a difference in quality, and to figure out what adjustments need to be made to payment systems across different medical specialties, according to the report.

Fighting Off Bad Bugs

Congress should be taking more aggressive steps to incentivize pharmaceutical and biotechnology industries to fight antibiotic resistance, physicians and other policy makers said during a press conference sponsored by the Infectious Diseases Society of America. The group released its “hit list” of the six most dangerous, drug-resistant microbes. “These are life-threatening drug-resistant infections, and we're seeing them every day,” explained Dr. Martin J. Blaser, IDSA president. “What is worse is that our ammunition is running out and there are no reinforcements in sight.” Another problem: “Some of better drugs are more toxic,” he said. Robert Guidos, director of public policy with IDSA, noted that Congress has not taken any action to support the implementation of new incentives for drug companies to develop stronger antibiotics. Market exclusivity—a method that has worked favorably in the past for pediatric drugs, would be an option, he said. So would calling for tax credits for the manufacture or distribution of these products. Another option would be to establish an independent commission to identify which drugs are more sufficient in combatting resistant microbes. “The superbugs are not waiting, and neither should we,” Dr. Blaser commented. The top “bad bugs” are methicillin-resistant Staphylococcus aureus; Escherichia coli and Klebsiella species; Acinetobacter baumannii; Aspergillus; vancomycin-resistant Enterococcus faecium; and Pseudomonas aeruginosa, according to the IDSA report.

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, "to improve voluntary quality reporting to congressional leadership," Dr. Duane M. Cady, AMA chair, said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from Dr. Michael Maves, AMA vice president, to the state medical associations and national specialty societies.

The agreement was cosigned by Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health. If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing approximately 140 physician measures covering 34 clinical measures by the end of 2006.

The Consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The Alliance is receiving a yet-to-be-announced amount of funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the Consortium, among others. The pilot is crucial, as it will bring to the surface any "unintended consequences," said Dr. Nielsen.

Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures "to cover a majority of Medicare spending for physician services," the agreement said. Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. "For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies." To date, the consortium has developed more than 90 evidence-based performance measures, he said. As far as he's concerned, nothing in the agreement with the congressional leaders should be a surprise.

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet, some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

"This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it," Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. "Not everyone is ready for [pay for performance]."

While many primary care quality measures have been written, it's a different story for subspecialties, "because their measures haven't even been developed yet. They're starting from ground zero," she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she added.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. "Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all."

At the press briefing, Dr. Nielsen said "this is a dustup about nothing," adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is "very difficult" to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, "either individually or through the Council of Medical Specialty Societies," he said.

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. "While those concerns are valid, it isn't going to come to that." What these groups need to remember is [that the] AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

"People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated," he said.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMS's perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The voluntary reporting program isn't about developing measures, it's about testing systems "on how well we can use the existing claims-based system to capture the data from the measures," he said.

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, "to improve voluntary quality reporting to congressional leadership," Dr. Duane M. Cady, AMA chair, said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from Dr. Michael Maves, AMA vice president, to the state medical associations and national specialty societies.

The agreement was cosigned by Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health. If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing approximately 140 physician measures covering 34 clinical measures by the end of 2006.

The Consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The Alliance is receiving a yet-to-be-announced amount of funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the Consortium, among others. The pilot is crucial, as it will bring to the surface any "unintended consequences," said Dr. Nielsen.

Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures "to cover a majority of Medicare spending for physician services," the agreement said. Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. "For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies." To date, the consortium has developed more than 90 evidence-based performance measures, he said. As far as he's concerned, nothing in the agreement with the congressional leaders should be a surprise.

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet, some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

"This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it," Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. "Not everyone is ready for [pay for performance]."

While many primary care quality measures have been written, it's a different story for subspecialties, "because their measures haven't even been developed yet. They're starting from ground zero," she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she added.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. "Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all."

At the press briefing, Dr. Nielsen said "this is a dustup about nothing," adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is "very difficult" to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, "either individually or through the Council of Medical Specialty Societies," he said.

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. "While those concerns are valid, it isn't going to come to that." What these groups need to remember is [that the] AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

"People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated," he said.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMS's perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The voluntary reporting program isn't about developing measures, it's about testing systems "on how well we can use the existing claims-based system to capture the data from the measures," he said.

Specialty organizations are concerned that the American Medical Association is unilaterally setting performance goals that doctors won't be able to meet.

A recent agreement between the AMA and leaders in Congress outlines an ambitious 2-year time line for establishing performance measures, "to improve voluntary quality reporting to congressional leadership," Dr. Duane M. Cady, AMA chair, said in a statement.

Dr. Cady signed the pact at the end of last year, although the details weren't publicly disclosed until several months later. The terms were outlined in a Feb. 7 memorandum from Dr. Michael Maves, AMA vice president, to the state medical associations and national specialty societies.

The agreement was cosigned by Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee; and Rep. Nathan Deal (R-Ga.), chair of the House Energy and Commerce subcommittee on health. If the plan goes through, physician groups will work with the Centers for Medicare and Medicaid Services to agree on a starter set of evidence-based quality measures for a broad group of specialties, with a goal of developing approximately 140 physician measures covering 34 clinical measures by the end of 2006.

The Consortium has not yet tested the physician measures; it has been working with several groups to do so, including the Ambulatory Care Quality Alliance, said Dr. Nancy Nielsen, speaker of the AMA's House of Delegates, at a press briefing. The Alliance is receiving a yet-to-be-announced amount of funding from the Agency for Health Research and Quality and CMS to test 26 measures at six clinical sites, beginning May 1. Those measures include some developed by the Consortium, among others. The pilot is crucial, as it will bring to the surface any "unintended consequences," said Dr. Nielsen.

Then in 2007, doctors who report on three to five quality measures would see increased payments from Medicare. By the end of next year, physician groups should have developed performance measures "to cover a majority of Medicare spending for physician services," the agreement said. Other initiatives, such as working on methods to report quality data and implementing additional reforms to address payment and quality objectives, also were outlined in the agreement.

The AMA has been working on these quality initiatives for some time, Dr. Cady said. "For the past 5 years the AMA has convened the Physician Consortium for Performance Improvement, which includes more than 70 national medical specialty and state medical societies." To date, the consortium has developed more than 90 evidence-based performance measures, he said. As far as he's concerned, nothing in the agreement with the congressional leaders should be a surprise.

All of these steps had been documented previously in public letters to Congress and the Bush administration and distributed to medical specialty societies, he said.

Yet, some of the members of the consortium said they had no advance notice of the AMA's plans to sign this pact.

"This is an agreement signed with leaders on Capitol Hill on how pay for performance should be laid out, and some groups feel they should have been a part of it," Cynthia A. Brown, director of advocacy and health policy at the American College of Surgeons, said in an interview.

The real problem isn't about advocacy or the workings of the consortium. It's about meeting deadlines on clinical measures, Ms. Brown said. "Not everyone is ready for [pay for performance]."

While many primary care quality measures have been written, it's a different story for subspecialties, "because their measures haven't even been developed yet. They're starting from ground zero," she said. With this latest agreement, subspecialties now feel pressured to find their own groups of doctors to propose measures to run through the consortium's process by year's end, she added.

The criteria on performance measurement also will be different by specialty, Ms. Brown said. "Surgeons in particular often like to be judged by outcomes, and primary care doctors don't want to be because they have a bigger problem with patient compliance. One size doesn't fit all."

At the press briefing, Dr. Nielsen said "this is a dustup about nothing," adding that the specialty societies had been included on the performance measure development from the start. The initial measures won't cover all the specialties, but it was necessary to show Congress that the profession was serious about quality improvement by getting something started quickly, she said.

The AMA has tried to work with the CMS on quality measures for some time now, and it is "very difficult" to get truly significant data and information that really makes a difference, Dr. Thomas Purdon, former president of the American College of Obstetricians and Gynecologists, said in an interview. However, it's unlikely the data will be accurate or have real meaning unless the specialty societies are involved, "either individually or through the Council of Medical Specialty Societies," he said.

It's true that a number of specialty groups don't feel comfortable that they can meet these time lines, Dr. David Nielsen, executive vice president and chief executive officer of the American Academy of Otolaryngology-Head and Neck Surgery, said in an interview.

There's an assumption that the AMA is going to be responsible for doing all of the specialty measures, Dr. David Nielsen said. "While those concerns are valid, it isn't going to come to that." What these groups need to remember is [that the] AMA's consortium is run by the specialty societies, a process that's consensus based, he said. (The American Academy of Otolaryngology-Head and Neck Surgery is a consortium member.)

"People who are upset about this aren't comparing it to what would happen if the AMA didn't step in; that CMS would step in and do their own measures. I'd be much happier with consortium measures than any other group of measures, because the consortium is in the best position to produce patient-centered measures of medical outcomes that are driven by physicians, and are relevant and validated," he said.

Physician concerns about CMS's initial draft of the physician voluntary reporting program (PVRP) had also been interpreted on Capitol Hill as a sign of opposition to quality reporting, Dr. Maves noted.

From CMS's perspective, there's no reason why the AMA's agreement shouldn't work in tandem with the PVRP, CMS spokesman Peter Ashkenaz said in an interview.

The voluntary reporting program isn't about developing measures, it's about testing systems "on how well we can use the existing claims-based system to capture the data from the measures," he said.

Medicare's new prescription drug benefit offers meager savings on drug prices, according to a Families USA survey.

For 19 out of the top 20 drugs prescribed to seniors in 2004 in several regions of the country, Families USA found that Medicare's prices were much higher than those negotiated by the Department of Veterans Affairs (VA).

"The median price difference for the top 20 drugs was 48.2%. This means that, for half of the top 20 drugs prescribed to seniors, the lowest price offered by any Medicare prescription drug plan was at least 48.2% higher than the lowest price available through the VA," the survey indicated.

"The huge prices paid by seniors and taxpayers could have been avoided if Congress and the president had not caved in to the pressure of the drug lobby," said Ron Pollack, executive director of Families USA. "They prohibited Medicare from bargaining for cheaper prices and, to ensure that this would never change, they delegated the administration of the benefit to private plans, which have far less bargaining clout."

According to Peter Ashkenaz, deputy director of the Office of Public Affairs for the Centers for Medicare and Medicaid Services, Families USA just rehashed the old argument that there should be government price controls and a one-size-fits-all benefit.

The VA has a restricted formulary and limits where patients can get their drugs, he said. "You have to get your drugs from a VA doctor, at a VA facility. For example, in Georgia there are 9 VA pharmacies, compared [with] 1,833 local pharmacies in that state," Mr. Ashkenaz said in an interview.

In addition, the Government Accountability Office looked at using the VA model for the Medicare Part D drug benefit, "and found that doing so would raise prices in the commercial market and thus in Medicare," he said.

The survey also compared the annual difference between the lowest VA prices and lowest Medicare drug plan prices among the top seven drugs prescribed for seniors. Huge differences were noted in a few of these drugs.

VA prices are lower for both generic and brand-name drugs, Families USA noted. Eighteen of the 20 most-prescribed medicines for seniors are brand-name drugs. For the two generic drugs, the median difference between the lowest Medicare drug plan and the lowest VA price was 95%.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, agreed with CMS that it was unfair to compare Medicare's new drug plan, which is a private marketplace system, to a government-mandated price control system such as the VA.

"The VA is not a competitive marketplace. It has a mandatory 24% rebate, one of those special occasions where we have price controls in this country," he said in an interview. Even so, VA hospitals often try to negotiate something even higher than that percentage, he noted.

One thing to keep in mind is that VA hospitals and clinics make up only 1%–2% of the marketplace, Mr. Trewhitt said. "If we extended that type of mandatory rebate across the market, it would hurt the ability of the worlds' leading pharmaceutical and biotechnology companies to create new medicines.

ELSEVIER GLOBAL MEDICAL NEWS

Medicare's new prescription drug benefit offers meager savings on drug prices, according to a Families USA survey.

For 19 out of the top 20 drugs prescribed to seniors in 2004 in several regions of the country, Families USA found that Medicare's prices were much higher than those negotiated by the Department of Veterans Affairs (VA).

"The median price difference for the top 20 drugs was 48.2%. This means that, for half of the top 20 drugs prescribed to seniors, the lowest price offered by any Medicare prescription drug plan was at least 48.2% higher than the lowest price available through the VA," the survey indicated.

"The huge prices paid by seniors and taxpayers could have been avoided if Congress and the president had not caved in to the pressure of the drug lobby," said Ron Pollack, executive director of Families USA. "They prohibited Medicare from bargaining for cheaper prices and, to ensure that this would never change, they delegated the administration of the benefit to private plans, which have far less bargaining clout."

According to Peter Ashkenaz, deputy director of the Office of Public Affairs for the Centers for Medicare and Medicaid Services, Families USA just rehashed the old argument that there should be government price controls and a one-size-fits-all benefit.

The VA has a restricted formulary and limits where patients can get their drugs, he said. "You have to get your drugs from a VA doctor, at a VA facility. For example, in Georgia there are 9 VA pharmacies, compared [with] 1,833 local pharmacies in that state," Mr. Ashkenaz said in an interview.

In addition, the Government Accountability Office looked at using the VA model for the Medicare Part D drug benefit, "and found that doing so would raise prices in the commercial market and thus in Medicare," he said.

The survey also compared the annual difference between the lowest VA prices and lowest Medicare drug plan prices among the top seven drugs prescribed for seniors. Huge differences were noted in a few of these drugs.

VA prices are lower for both generic and brand-name drugs, Families USA noted. Eighteen of the 20 most-prescribed medicines for seniors are brand-name drugs. For the two generic drugs, the median difference between the lowest Medicare drug plan and the lowest VA price was 95%.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, agreed with CMS that it was unfair to compare Medicare's new drug plan, which is a private marketplace system, to a government-mandated price control system such as the VA.

"The VA is not a competitive marketplace. It has a mandatory 24% rebate, one of those special occasions where we have price controls in this country," he said in an interview. Even so, VA hospitals often try to negotiate something even higher than that percentage, he noted.

One thing to keep in mind is that VA hospitals and clinics make up only 1%–2% of the marketplace, Mr. Trewhitt said. "If we extended that type of mandatory rebate across the market, it would hurt the ability of the worlds' leading pharmaceutical and biotechnology companies to create new medicines.

ELSEVIER GLOBAL MEDICAL NEWS

Medicare's new prescription drug benefit offers meager savings on drug prices, according to a Families USA survey.

For 19 out of the top 20 drugs prescribed to seniors in 2004 in several regions of the country, Families USA found that Medicare's prices were much higher than those negotiated by the Department of Veterans Affairs (VA).

"The median price difference for the top 20 drugs was 48.2%. This means that, for half of the top 20 drugs prescribed to seniors, the lowest price offered by any Medicare prescription drug plan was at least 48.2% higher than the lowest price available through the VA," the survey indicated.

"The huge prices paid by seniors and taxpayers could have been avoided if Congress and the president had not caved in to the pressure of the drug lobby," said Ron Pollack, executive director of Families USA. "They prohibited Medicare from bargaining for cheaper prices and, to ensure that this would never change, they delegated the administration of the benefit to private plans, which have far less bargaining clout."

According to Peter Ashkenaz, deputy director of the Office of Public Affairs for the Centers for Medicare and Medicaid Services, Families USA just rehashed the old argument that there should be government price controls and a one-size-fits-all benefit.

The VA has a restricted formulary and limits where patients can get their drugs, he said. "You have to get your drugs from a VA doctor, at a VA facility. For example, in Georgia there are 9 VA pharmacies, compared [with] 1,833 local pharmacies in that state," Mr. Ashkenaz said in an interview.

In addition, the Government Accountability Office looked at using the VA model for the Medicare Part D drug benefit, "and found that doing so would raise prices in the commercial market and thus in Medicare," he said.

The survey also compared the annual difference between the lowest VA prices and lowest Medicare drug plan prices among the top seven drugs prescribed for seniors. Huge differences were noted in a few of these drugs.

VA prices are lower for both generic and brand-name drugs, Families USA noted. Eighteen of the 20 most-prescribed medicines for seniors are brand-name drugs. For the two generic drugs, the median difference between the lowest Medicare drug plan and the lowest VA price was 95%.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, agreed with CMS that it was unfair to compare Medicare's new drug plan, which is a private marketplace system, to a government-mandated price control system such as the VA.

"The VA is not a competitive marketplace. It has a mandatory 24% rebate, one of those special occasions where we have price controls in this country," he said in an interview. Even so, VA hospitals often try to negotiate something even higher than that percentage, he noted.

One thing to keep in mind is that VA hospitals and clinics make up only 1%–2% of the marketplace, Mr. Trewhitt said. "If we extended that type of mandatory rebate across the market, it would hurt the ability of the worlds' leading pharmaceutical and biotechnology companies to create new medicines.

ELSEVIER GLOBAL MEDICAL NEWS

Health Care Growth

One dollar of every $5 will be spent on health care by 2015, with spending reaching more than $4 trillion, according to a study from the National Health Statistics Group at the Centers for Medicare and Medicaid Services. Forecasters predict that national health spending growth will consistently outpace the growth in the gross domestic product (GDP) over the next 10 years, with health spending expected to consume 20% of GDP, compared with 16% today. Growth in total physician spending is expected to decline from 9% in 2004 to 7.5% in 2005, or a total of $430 billion. It's likely that physician spending will approach $850 billion by 2015. This figure is probably an underestimate, however, “since it incorporates Medicare payment cuts for physicians from 2006 through 2013. In fact, Congress has already eliminated the cut planned for 2006,” according to a summary of the survey. In other findings, spending on prescription drugs is expected to reach $446 billion in 2015, up from $188 billion in 2004. Spending on hospital care is expected to reach $1.2 trillion in 2015, double the 2005 level. Implementation of the new Medicare Part D drug benefit, and the added burden of paying costs that had been absorbed by other sectors, will lead to a spike in Medicare growth of up to 25% in 2006. Over the next 10 years, Medicare spending is projected to increase from $309 billion in 2004 to $792 billion by 2015.

Deciphering Drug Coverage

In an effort to answer some of the many questions physicians have about the new Medicare Part D prescription drug benefit, Medicare has posted a new fact sheet on its Web site. The fact sheet includes links to formulary information, requests for prescription information and change forms, and a chart on Part B versus Part D drug coverage. The fact sheet describes the prescribing physician's role in coverage determination, exceptions, and appeals processes and provides an outline of the deadlines for prescription drug plans to respond to physician requests. The fact sheet is available online at

www.cms.hhs.gov/MedlearnProducts/downloads/Part_D_Resource_Factsheet.pdf

www.cms.hhs.gov/center/provider.asp

Part D: Not Perfect

The Medicare drug benefit isn't without its flaws, Republican staff acknowledged at a conference sponsored by AcademyHealth. “We want to make sure the program continues on to a successful conclusion, to get prescription drugs for people. It's a big part of our agenda,” said Mark Hayes, a majority spokesman for the Senate Finance Committee. “Medicare prescription drug spending under this new benefit has already decreased by 20%,” said Chuck Clapton, majority chief counsel for the House Energy and Commerce Committee's subcommittee on health. “That's not to say the new benefit has been a complete and full success. There have been some problems—some populations have had some issues in getting the prescription drugs they need. Beneficiaries haven't been able to enroll seamlessly.” To clear up confusion over the drug benefit, Sen. Max Baucus (D-Mont.) in forthcoming legislation will propose standards for approval and classification of plan offerings so that “seniors can make apples-to-apples comparisons and reach informed decisions” about their prescription drugs, according to a statement from his office.

Medicare Formulary Guidance

The U.S. Pharmacopeia (USP) last month released its final model guidelines for use in developing Medicare prescription drug formularies in 2007. The model guidelines are used by the Centers for Medicare and Medicaid Services to evaluate the formularies created by private drug plans that participate in the Medicare Part D program. There are fewer unique categories and classes in the 2007 document—133, compared with 146 in 2006. In addition, the number of formulary key drug types, which are used by CMS to test the comprehensiveness of the formulary, has been increased from 118 to 141. The final model guidelines eliminate the distinction between nonsteroidal anti-inflammatory drugs and cyclooxygenase-2 inhibitors and between selective serotonin reuptake inhibitors and serotonin/norepinephrine reuptake inhibitors. The USP model guidelines are availableonline at

www.usp.org

Lester Crawford, Lobbyist

Former Food and Drug Administration Commissioner Lester Crawford, D.V.M., has taken a position at Policy Directions Inc., a Washington-based lobbying and consulting firm. Mr. Crawford will be senior counsel to the organization, which counts pharmaceutical manufacturers and biotechnology and food companies among its clients. By law, he will be barred from directly lobbying Congress for at least a year. Policy Directions declined to make him available for an interview. Mr. Crawford resigned abruptly from his FDA post in September, just 2 months after he was confirmed by the Senate. In the 5 years of the Bush Administration, the FDA has had a permanent commissioner for only 18 months. (Mr. Crawford served in an acting capacity for 16 months without Senate confirmation.) In early February, Sen. Chuck Grassley (R-Iowa) wrote to White House Chief of Staff Andrew Card asking that a permanent commissioner be nominated, adding that the agency was adrift without such leadership. For now, Dr. Andrew von Eschenbach is the acting commissioner, but also continues to hold his previous job as head of the National Cancer Institute.

Health Care Growth

One dollar of every $5 will be spent on health care by 2015, with spending reaching more than $4 trillion, according to a study from the National Health Statistics Group at the Centers for Medicare and Medicaid Services. Forecasters predict that national health spending growth will consistently outpace the growth in the gross domestic product (GDP) over the next 10 years, with health spending expected to consume 20% of GDP, compared with 16% today. Growth in total physician spending is expected to decline from 9% in 2004 to 7.5% in 2005, or a total of $430 billion. It's likely that physician spending will approach $850 billion by 2015. This figure is probably an underestimate, however, “since it incorporates Medicare payment cuts for physicians from 2006 through 2013. In fact, Congress has already eliminated the cut planned for 2006,” according to a summary of the survey. In other findings, spending on prescription drugs is expected to reach $446 billion in 2015, up from $188 billion in 2004. Spending on hospital care is expected to reach $1.2 trillion in 2015, double the 2005 level. Implementation of the new Medicare Part D drug benefit, and the added burden of paying costs that had been absorbed by other sectors, will lead to a spike in Medicare growth of up to 25% in 2006. Over the next 10 years, Medicare spending is projected to increase from $309 billion in 2004 to $792 billion by 2015.

Deciphering Drug Coverage

In an effort to answer some of the many questions physicians have about the new Medicare Part D prescription drug benefit, Medicare has posted a new fact sheet on its Web site. The fact sheet includes links to formulary information, requests for prescription information and change forms, and a chart on Part B versus Part D drug coverage. The fact sheet describes the prescribing physician's role in coverage determination, exceptions, and appeals processes and provides an outline of the deadlines for prescription drug plans to respond to physician requests. The fact sheet is available online at

www.cms.hhs.gov/MedlearnProducts/downloads/Part_D_Resource_Factsheet.pdf

www.cms.hhs.gov/center/provider.asp

Part D: Not Perfect

The Medicare drug benefit isn't without its flaws, Republican staff acknowledged at a conference sponsored by AcademyHealth. “We want to make sure the program continues on to a successful conclusion, to get prescription drugs for people. It's a big part of our agenda,” said Mark Hayes, a majority spokesman for the Senate Finance Committee. “Medicare prescription drug spending under this new benefit has already decreased by 20%,” said Chuck Clapton, majority chief counsel for the House Energy and Commerce Committee's subcommittee on health. “That's not to say the new benefit has been a complete and full success. There have been some problems—some populations have had some issues in getting the prescription drugs they need. Beneficiaries haven't been able to enroll seamlessly.” To clear up confusion over the drug benefit, Sen. Max Baucus (D-Mont.) in forthcoming legislation will propose standards for approval and classification of plan offerings so that “seniors can make apples-to-apples comparisons and reach informed decisions” about their prescription drugs, according to a statement from his office.

Medicare Formulary Guidance

The U.S. Pharmacopeia (USP) last month released its final model guidelines for use in developing Medicare prescription drug formularies in 2007. The model guidelines are used by the Centers for Medicare and Medicaid Services to evaluate the formularies created by private drug plans that participate in the Medicare Part D program. There are fewer unique categories and classes in the 2007 document—133, compared with 146 in 2006. In addition, the number of formulary key drug types, which are used by CMS to test the comprehensiveness of the formulary, has been increased from 118 to 141. The final model guidelines eliminate the distinction between nonsteroidal anti-inflammatory drugs and cyclooxygenase-2 inhibitors and between selective serotonin reuptake inhibitors and serotonin/norepinephrine reuptake inhibitors. The USP model guidelines are availableonline at

www.usp.org

Lester Crawford, Lobbyist

Former Food and Drug Administration Commissioner Lester Crawford, D.V.M., has taken a position at Policy Directions Inc., a Washington-based lobbying and consulting firm. Mr. Crawford will be senior counsel to the organization, which counts pharmaceutical manufacturers and biotechnology and food companies among its clients. By law, he will be barred from directly lobbying Congress for at least a year. Policy Directions declined to make him available for an interview. Mr. Crawford resigned abruptly from his FDA post in September, just 2 months after he was confirmed by the Senate. In the 5 years of the Bush Administration, the FDA has had a permanent commissioner for only 18 months. (Mr. Crawford served in an acting capacity for 16 months without Senate confirmation.) In early February, Sen. Chuck Grassley (R-Iowa) wrote to White House Chief of Staff Andrew Card asking that a permanent commissioner be nominated, adding that the agency was adrift without such leadership. For now, Dr. Andrew von Eschenbach is the acting commissioner, but also continues to hold his previous job as head of the National Cancer Institute.

Health Care Growth

One dollar of every $5 will be spent on health care by 2015, with spending reaching more than $4 trillion, according to a study from the National Health Statistics Group at the Centers for Medicare and Medicaid Services. Forecasters predict that national health spending growth will consistently outpace the growth in the gross domestic product (GDP) over the next 10 years, with health spending expected to consume 20% of GDP, compared with 16% today. Growth in total physician spending is expected to decline from 9% in 2004 to 7.5% in 2005, or a total of $430 billion. It's likely that physician spending will approach $850 billion by 2015. This figure is probably an underestimate, however, “since it incorporates Medicare payment cuts for physicians from 2006 through 2013. In fact, Congress has already eliminated the cut planned for 2006,” according to a summary of the survey. In other findings, spending on prescription drugs is expected to reach $446 billion in 2015, up from $188 billion in 2004. Spending on hospital care is expected to reach $1.2 trillion in 2015, double the 2005 level. Implementation of the new Medicare Part D drug benefit, and the added burden of paying costs that had been absorbed by other sectors, will lead to a spike in Medicare growth of up to 25% in 2006. Over the next 10 years, Medicare spending is projected to increase from $309 billion in 2004 to $792 billion by 2015.

Deciphering Drug Coverage

In an effort to answer some of the many questions physicians have about the new Medicare Part D prescription drug benefit, Medicare has posted a new fact sheet on its Web site. The fact sheet includes links to formulary information, requests for prescription information and change forms, and a chart on Part B versus Part D drug coverage. The fact sheet describes the prescribing physician's role in coverage determination, exceptions, and appeals processes and provides an outline of the deadlines for prescription drug plans to respond to physician requests. The fact sheet is available online at

www.cms.hhs.gov/MedlearnProducts/downloads/Part_D_Resource_Factsheet.pdf

www.cms.hhs.gov/center/provider.asp

Part D: Not Perfect

The Medicare drug benefit isn't without its flaws, Republican staff acknowledged at a conference sponsored by AcademyHealth. “We want to make sure the program continues on to a successful conclusion, to get prescription drugs for people. It's a big part of our agenda,” said Mark Hayes, a majority spokesman for the Senate Finance Committee. “Medicare prescription drug spending under this new benefit has already decreased by 20%,” said Chuck Clapton, majority chief counsel for the House Energy and Commerce Committee's subcommittee on health. “That's not to say the new benefit has been a complete and full success. There have been some problems—some populations have had some issues in getting the prescription drugs they need. Beneficiaries haven't been able to enroll seamlessly.” To clear up confusion over the drug benefit, Sen. Max Baucus (D-Mont.) in forthcoming legislation will propose standards for approval and classification of plan offerings so that “seniors can make apples-to-apples comparisons and reach informed decisions” about their prescription drugs, according to a statement from his office.

Medicare Formulary Guidance

The U.S. Pharmacopeia (USP) last month released its final model guidelines for use in developing Medicare prescription drug formularies in 2007. The model guidelines are used by the Centers for Medicare and Medicaid Services to evaluate the formularies created by private drug plans that participate in the Medicare Part D program. There are fewer unique categories and classes in the 2007 document—133, compared with 146 in 2006. In addition, the number of formulary key drug types, which are used by CMS to test the comprehensiveness of the formulary, has been increased from 118 to 141. The final model guidelines eliminate the distinction between nonsteroidal anti-inflammatory drugs and cyclooxygenase-2 inhibitors and between selective serotonin reuptake inhibitors and serotonin/norepinephrine reuptake inhibitors. The USP model guidelines are availableonline at

www.usp.org

Lester Crawford, Lobbyist

Former Food and Drug Administration Commissioner Lester Crawford, D.V.M., has taken a position at Policy Directions Inc., a Washington-based lobbying and consulting firm. Mr. Crawford will be senior counsel to the organization, which counts pharmaceutical manufacturers and biotechnology and food companies among its clients. By law, he will be barred from directly lobbying Congress for at least a year. Policy Directions declined to make him available for an interview. Mr. Crawford resigned abruptly from his FDA post in September, just 2 months after he was confirmed by the Senate. In the 5 years of the Bush Administration, the FDA has had a permanent commissioner for only 18 months. (Mr. Crawford served in an acting capacity for 16 months without Senate confirmation.) In early February, Sen. Chuck Grassley (R-Iowa) wrote to White House Chief of Staff Andrew Card asking that a permanent commissioner be nominated, adding that the agency was adrift without such leadership. For now, Dr. Andrew von Eschenbach is the acting commissioner, but also continues to hold his previous job as head of the National Cancer Institute.

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician-payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems that are built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We certainly anticipate action on the issue this year,” Carol Guthrie, an aide to the senator, said in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “Thus these accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on the agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee. “We need legislation to move that process along.”

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value as well as relief from mandates, “onerous rating rules,” and other reporting burdens, Mr. Northrup said.

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician-payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems that are built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We certainly anticipate action on the issue this year,” Carol Guthrie, an aide to the senator, said in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “Thus these accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on the agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee. “We need legislation to move that process along.”

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value as well as relief from mandates, “onerous rating rules,” and other reporting burdens, Mr. Northrup said.

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician-payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems that are built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We certainly anticipate action on the issue this year,” Carol Guthrie, an aide to the senator, said in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “Thus these accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on the agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee. “We need legislation to move that process along.”

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value as well as relief from mandates, “onerous rating rules,” and other reporting burdens, Mr. Northrup said.

WASHINGTON — The medical home, a model for financing and delivering care that has long been endorsed by the American Academy of Family Physicians, is a key part of the American College of Physicians' action plan to reform Medicare payment policies.

Medicare should pilot test the “advanced medical home,” where physicians would receive reimbursement for coordinating care in a practice environment that centers on a patient's individual needs, the ACP recommended in a policy paper.

The ACP urged Congress and the Bush administration to apply this model, along with other financial and organizational changes, to counter declining interest in primary care among medical students and practicing physicians.

Medicare's payment system is one of the main reasons that doctors are abandoning primary care, Robert B. Doherty, ACP's senior vice president of governmental affairs and public policy, said at a press briefing to release the ACP plan.

Medicare pays too little for the time that primary care physicians spend with their patients—and discourages them from organizing their practices to achieve optimal results, by failing to reimburse for things such as e-mail consultations, care coordination, or health information technology, he said.

“And despite all of the talk about pay for performance, Medicare continues to pay doctors for doing more, rather than doing better,” Mr. Doherty added.

Reconfiguring the payment system and encouraging use of the advanced medical home “would change the way that primary care is delivered and financed by Medicare and other payers,” ACP President Dr. C. Anderson Hedberg said.

Primary care physicians who apply the medical home model would partner with patients to ensure optimal management and coordination of care, using evidence-based clinical decision support tools at the point of care, Dr. Hedberg said. For example, an internist might partner with a patient in managing a chronic disease such as diabetes, and the patient would have access to medical advice through telephone and e-mail consultations.

Practices also would have arrangements with a team of health care professionals to provide “a full spectrum” of patient-centered services, Dr. Hedberg said.

Despite its emphasis on coordination of care, the advanced medical home is not the same as a disease management program, the ACP noted in its policy paper. In disease management, the emphasis is on the relationship between the patient and a case manager, with only periodic input from the physician. “In the advanced medical home model, the care and coordination of that care continually resides with the patient's personal physician and his/her health care team,” the paper indicated.

Successful use of the advanced medical home would rely on health information technology. Practices would be expected to issue regular reports on quality, efficiency, and patient experience measures, and use “innovative” scheduling systems to minimize appointment delays, Dr. Hedberg said.

Such innovations would require financing, however, which means that the advanced medical home cannot be implemented as an unfunded mandate, Mr. Doherty said. The Centers for Medicare and Medicaid Services (CMS) “will need to change the way it pays physicians who practice in an advanced medical home.” As the ACP envisions it, physicians who use the medical home model would receive an additional care management fee to cover the physician work involved in managing and coordinating care that falls outside of the usual face-to-face visit.

Physicians also would receive pay-for-performance bonuses and share in systemwide savings achieved by keeping patients with chronic conditions out of the hospital, he said.

A pilot test would help refine the model and demonstrate its potential to improve quality while lowering costs, Mr. Doherty said. The goal is to start implementing the advanced medical home as policy as early as 2007, “with widespread implementation within a few years.”

The advanced medical home “brings additional energy and ideas to the ongoing effort to bring improved and more efficient care to Medicare beneficiaries,” CMS spokesman Peter Ashkenaz said in an interview. He did not elaborate on whether the agency would pilot test such a system, but said that it was consistent with existing CMS initiatives such as the Medicare Health Support Program, “which works to provide more coordinated and effective care for those with chronic conditions. And it is consistent with our effort to adopt evidenced-based quality measures, which will lead us toward a pay-for-performance program,” he said.

The ACP's proposed “advanced medical home” builds on a concept that has been around for decades. In 1967, the medical home was described by the American Academy of Pediatrics' Council on Pediatric Practice as an effective model for caring for children with special needs, the ACP noted in its policy paper. The concept is also a central element of the American Academy of Family Physicians' Future of Family Medicine project.

The ACP added some enhancements to the AAFP's medical home concept, Mr. Doherty explained. For example, “we have a clear qualification process,” where practices would be certified as advanced medical homes and required to meet certain standards in order to qualify for additional payments.

AAFP President Dr. Larry Fields declined to comment specifically on the ACP proposal, but said the academy is working to convince Congress and the private sector that the medical home concept is worthwhile “and therefore worth paying for.”

An adequate workforce of family physicians providing patients with their own medical home “is the way to bring the promise of quality, affordable, accessible health care for everyone to fruition,” Dr. Fields said in an interview. The AAFP “will continue to try and convince those who still need convincing of the validity of our position.”

Congress and the private sector should also partner with the AAFP in providing funds for electronic health records, he said.

Although the advanced medical home is geared toward primary care, it wouldn't be limited to generalists, Mr. Doherty said. In most cases, a general internist or family physician would be the principal physician coordinating a patient's care in an advanced medical home. Yet “there may be instances when a patient might select a subspecialist within the medical home as his or her personal physician,” he said.

In such cases, the subspecialist is responsible for managing and coordinating care and provides the full range of required primary care services, he noted.

WASHINGTON — The medical home, a model for financing and delivering care that has long been endorsed by the American Academy of Family Physicians, is a key part of the American College of Physicians' action plan to reform Medicare payment policies.

Medicare should pilot test the “advanced medical home,” where physicians would receive reimbursement for coordinating care in a practice environment that centers on a patient's individual needs, the ACP recommended in a policy paper.

The ACP urged Congress and the Bush administration to apply this model, along with other financial and organizational changes, to counter declining interest in primary care among medical students and practicing physicians.

Medicare's payment system is one of the main reasons that doctors are abandoning primary care, Robert B. Doherty, ACP's senior vice president of governmental affairs and public policy, said at a press briefing to release the ACP plan.

Medicare pays too little for the time that primary care physicians spend with their patients—and discourages them from organizing their practices to achieve optimal results, by failing to reimburse for things such as e-mail consultations, care coordination, or health information technology, he said.

“And despite all of the talk about pay for performance, Medicare continues to pay doctors for doing more, rather than doing better,” Mr. Doherty added.

Reconfiguring the payment system and encouraging use of the advanced medical home “would change the way that primary care is delivered and financed by Medicare and other payers,” ACP President Dr. C. Anderson Hedberg said.

Primary care physicians who apply the medical home model would partner with patients to ensure optimal management and coordination of care, using evidence-based clinical decision support tools at the point of care, Dr. Hedberg said. For example, an internist might partner with a patient in managing a chronic disease such as diabetes, and the patient would have access to medical advice through telephone and e-mail consultations.

Practices also would have arrangements with a team of health care professionals to provide “a full spectrum” of patient-centered services, Dr. Hedberg said.

Despite its emphasis on coordination of care, the advanced medical home is not the same as a disease management program, the ACP noted in its policy paper. In disease management, the emphasis is on the relationship between the patient and a case manager, with only periodic input from the physician. “In the advanced medical home model, the care and coordination of that care continually resides with the patient's personal physician and his/her health care team,” the paper indicated.

Successful use of the advanced medical home would rely on health information technology. Practices would be expected to issue regular reports on quality, efficiency, and patient experience measures, and use “innovative” scheduling systems to minimize appointment delays, Dr. Hedberg said.

Such innovations would require financing, however, which means that the advanced medical home cannot be implemented as an unfunded mandate, Mr. Doherty said. The Centers for Medicare and Medicaid Services (CMS) “will need to change the way it pays physicians who practice in an advanced medical home.” As the ACP envisions it, physicians who use the medical home model would receive an additional care management fee to cover the physician work involved in managing and coordinating care that falls outside of the usual face-to-face visit.

Physicians also would receive pay-for-performance bonuses and share in systemwide savings achieved by keeping patients with chronic conditions out of the hospital, he said.

A pilot test would help refine the model and demonstrate its potential to improve quality while lowering costs, Mr. Doherty said. The goal is to start implementing the advanced medical home as policy as early as 2007, “with widespread implementation within a few years.”

The advanced medical home “brings additional energy and ideas to the ongoing effort to bring improved and more efficient care to Medicare beneficiaries,” CMS spokesman Peter Ashkenaz said in an interview. He did not elaborate on whether the agency would pilot test such a system, but said that it was consistent with existing CMS initiatives such as the Medicare Health Support Program, “which works to provide more coordinated and effective care for those with chronic conditions. And it is consistent with our effort to adopt evidenced-based quality measures, which will lead us toward a pay-for-performance program,” he said.

The ACP's proposed “advanced medical home” builds on a concept that has been around for decades. In 1967, the medical home was described by the American Academy of Pediatrics' Council on Pediatric Practice as an effective model for caring for children with special needs, the ACP noted in its policy paper. The concept is also a central element of the American Academy of Family Physicians' Future of Family Medicine project.

The ACP added some enhancements to the AAFP's medical home concept, Mr. Doherty explained. For example, “we have a clear qualification process,” where practices would be certified as advanced medical homes and required to meet certain standards in order to qualify for additional payments.

AAFP President Dr. Larry Fields declined to comment specifically on the ACP proposal, but said the academy is working to convince Congress and the private sector that the medical home concept is worthwhile “and therefore worth paying for.”

An adequate workforce of family physicians providing patients with their own medical home “is the way to bring the promise of quality, affordable, accessible health care for everyone to fruition,” Dr. Fields said in an interview. The AAFP “will continue to try and convince those who still need convincing of the validity of our position.”

Congress and the private sector should also partner with the AAFP in providing funds for electronic health records, he said.

Although the advanced medical home is geared toward primary care, it wouldn't be limited to generalists, Mr. Doherty said. In most cases, a general internist or family physician would be the principal physician coordinating a patient's care in an advanced medical home. Yet “there may be instances when a patient might select a subspecialist within the medical home as his or her personal physician,” he said.

In such cases, the subspecialist is responsible for managing and coordinating care and provides the full range of required primary care services, he noted.

WASHINGTON — The medical home, a model for financing and delivering care that has long been endorsed by the American Academy of Family Physicians, is a key part of the American College of Physicians' action plan to reform Medicare payment policies.

Medicare should pilot test the “advanced medical home,” where physicians would receive reimbursement for coordinating care in a practice environment that centers on a patient's individual needs, the ACP recommended in a policy paper.

The ACP urged Congress and the Bush administration to apply this model, along with other financial and organizational changes, to counter declining interest in primary care among medical students and practicing physicians.

Medicare's payment system is one of the main reasons that doctors are abandoning primary care, Robert B. Doherty, ACP's senior vice president of governmental affairs and public policy, said at a press briefing to release the ACP plan.

Medicare pays too little for the time that primary care physicians spend with their patients—and discourages them from organizing their practices to achieve optimal results, by failing to reimburse for things such as e-mail consultations, care coordination, or health information technology, he said.

“And despite all of the talk about pay for performance, Medicare continues to pay doctors for doing more, rather than doing better,” Mr. Doherty added.

Reconfiguring the payment system and encouraging use of the advanced medical home “would change the way that primary care is delivered and financed by Medicare and other payers,” ACP President Dr. C. Anderson Hedberg said.

Primary care physicians who apply the medical home model would partner with patients to ensure optimal management and coordination of care, using evidence-based clinical decision support tools at the point of care, Dr. Hedberg said. For example, an internist might partner with a patient in managing a chronic disease such as diabetes, and the patient would have access to medical advice through telephone and e-mail consultations.

Practices also would have arrangements with a team of health care professionals to provide “a full spectrum” of patient-centered services, Dr. Hedberg said.

Despite its emphasis on coordination of care, the advanced medical home is not the same as a disease management program, the ACP noted in its policy paper. In disease management, the emphasis is on the relationship between the patient and a case manager, with only periodic input from the physician. “In the advanced medical home model, the care and coordination of that care continually resides with the patient's personal physician and his/her health care team,” the paper indicated.

Successful use of the advanced medical home would rely on health information technology. Practices would be expected to issue regular reports on quality, efficiency, and patient experience measures, and use “innovative” scheduling systems to minimize appointment delays, Dr. Hedberg said.

Such innovations would require financing, however, which means that the advanced medical home cannot be implemented as an unfunded mandate, Mr. Doherty said. The Centers for Medicare and Medicaid Services (CMS) “will need to change the way it pays physicians who practice in an advanced medical home.” As the ACP envisions it, physicians who use the medical home model would receive an additional care management fee to cover the physician work involved in managing and coordinating care that falls outside of the usual face-to-face visit.

Physicians also would receive pay-for-performance bonuses and share in systemwide savings achieved by keeping patients with chronic conditions out of the hospital, he said.

A pilot test would help refine the model and demonstrate its potential to improve quality while lowering costs, Mr. Doherty said. The goal is to start implementing the advanced medical home as policy as early as 2007, “with widespread implementation within a few years.”

The advanced medical home “brings additional energy and ideas to the ongoing effort to bring improved and more efficient care to Medicare beneficiaries,” CMS spokesman Peter Ashkenaz said in an interview. He did not elaborate on whether the agency would pilot test such a system, but said that it was consistent with existing CMS initiatives such as the Medicare Health Support Program, “which works to provide more coordinated and effective care for those with chronic conditions. And it is consistent with our effort to adopt evidenced-based quality measures, which will lead us toward a pay-for-performance program,” he said.

The ACP's proposed “advanced medical home” builds on a concept that has been around for decades. In 1967, the medical home was described by the American Academy of Pediatrics' Council on Pediatric Practice as an effective model for caring for children with special needs, the ACP noted in its policy paper. The concept is also a central element of the American Academy of Family Physicians' Future of Family Medicine project.

The ACP added some enhancements to the AAFP's medical home concept, Mr. Doherty explained. For example, “we have a clear qualification process,” where practices would be certified as advanced medical homes and required to meet certain standards in order to qualify for additional payments.

AAFP President Dr. Larry Fields declined to comment specifically on the ACP proposal, but said the academy is working to convince Congress and the private sector that the medical home concept is worthwhile “and therefore worth paying for.”

An adequate workforce of family physicians providing patients with their own medical home “is the way to bring the promise of quality, affordable, accessible health care for everyone to fruition,” Dr. Fields said in an interview. The AAFP “will continue to try and convince those who still need convincing of the validity of our position.”

Congress and the private sector should also partner with the AAFP in providing funds for electronic health records, he said.

Although the advanced medical home is geared toward primary care, it wouldn't be limited to generalists, Mr. Doherty said. In most cases, a general internist or family physician would be the principal physician coordinating a patient's care in an advanced medical home. Yet “there may be instances when a patient might select a subspecialist within the medical home as his or her personal physician,” he said.

In such cases, the subspecialist is responsible for managing and coordinating care and provides the full range of required primary care services, he noted.

Medicare has expanded its coverage of bariatric surgery to its beneficiaries of all ages—provided that those patients seek care in facilities certified by the American College of Surgeons or the American Society for Bariatric Surgery.

The Centers for Medicare and Medicaid Services had originally proposed to exclude patients aged 65 years and older from coverage for bariatric surgery, based on the significant surgical risks seen in studies of this population.

But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages—provided that the surgery be performed in facilities capable of handling large numbers of these procedures and that it be performed only by highly qualified surgeons.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview. “We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

In announcing the national coverage decision, CMS Administrator Dr. Mark B. McClellan said, “Bariatric surgery is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries.

“While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries.”

CMS's original proposal, issued late last year, would have excluded coverage for patients older than 65 years, except in clinical trials.

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she noted “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The College started its certification program “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said.

“Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of bariatric procedures Medicare covers for its beneficiaries. Previously, only gastric bypass surgery was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Although Medicare's bariatric coverage has expanded regarding patient age and types of procedures, limitations do remain. Coverage is still restricted to obese patients who have one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the American College of Surgeons' bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

Medicare has expanded its coverage of bariatric surgery to its beneficiaries of all ages—provided that those patients seek care in facilities certified by the American College of Surgeons or the American Society for Bariatric Surgery.

The Centers for Medicare and Medicaid Services had originally proposed to exclude patients aged 65 years and older from coverage for bariatric surgery, based on the significant surgical risks seen in studies of this population.

But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages—provided that the surgery be performed in facilities capable of handling large numbers of these procedures and that it be performed only by highly qualified surgeons.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview. “We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

In announcing the national coverage decision, CMS Administrator Dr. Mark B. McClellan said, “Bariatric surgery is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries.

“While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries.”

CMS's original proposal, issued late last year, would have excluded coverage for patients older than 65 years, except in clinical trials.

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she noted “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The College started its certification program “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said.

“Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of bariatric procedures Medicare covers for its beneficiaries. Previously, only gastric bypass surgery was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Although Medicare's bariatric coverage has expanded regarding patient age and types of procedures, limitations do remain. Coverage is still restricted to obese patients who have one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the American College of Surgeons' bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

Medicare has expanded its coverage of bariatric surgery to its beneficiaries of all ages—provided that those patients seek care in facilities certified by the American College of Surgeons or the American Society for Bariatric Surgery.

The Centers for Medicare and Medicaid Services had originally proposed to exclude patients aged 65 years and older from coverage for bariatric surgery, based on the significant surgical risks seen in studies of this population.

But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages—provided that the surgery be performed in facilities capable of handling large numbers of these procedures and that it be performed only by highly qualified surgeons.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview. “We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

In announcing the national coverage decision, CMS Administrator Dr. Mark B. McClellan said, “Bariatric surgery is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries.

“While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries.”

CMS's original proposal, issued late last year, would have excluded coverage for patients older than 65 years, except in clinical trials.

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she noted “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The College started its certification program “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said.

“Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of bariatric procedures Medicare covers for its beneficiaries. Previously, only gastric bypass surgery was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Although Medicare's bariatric coverage has expanded regarding patient age and types of procedures, limitations do remain. Coverage is still restricted to obese patients who have one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the American College of Surgeons' bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

Medicare's national coverage decision on bariatric surgery expands the population for which the program will cover the procedure, but specifies that the procedure must be done at a highly qualified center.

The Centers for Medicare and Medicaid Services originally proposed to exclude patients aged 65 years and older from coverage, based on the significant surgical risks seen in studies of this population. But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages, provided that the surgery was done in facilities capable of handling large numbers of these procedures and was performed by highly qualified surgeons.

This means that patients must seek care in facilities certified by certain medical organizations, the agency said.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons (ACS) and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

In announcing the national coverage decision, Dr. Mark B. McClellan, CMS administrator, said that bariatric surgery “is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries. While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries,” Dr. McClellan added.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview.

“We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she said, “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The college started its certification program, “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said. “Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of procedures Medicare covers for its beneficiaries. Previously, only gastric bypass was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Further, coverage is limited to obese patients with one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the ACS's bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

Medicare's national coverage decision on bariatric surgery expands the population for which the program will cover the procedure, but specifies that the procedure must be done at a highly qualified center.

The Centers for Medicare and Medicaid Services originally proposed to exclude patients aged 65 years and older from coverage, based on the significant surgical risks seen in studies of this population. But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages, provided that the surgery was done in facilities capable of handling large numbers of these procedures and was performed by highly qualified surgeons.

This means that patients must seek care in facilities certified by certain medical organizations, the agency said.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons (ACS) and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

In announcing the national coverage decision, Dr. Mark B. McClellan, CMS administrator, said that bariatric surgery “is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries. While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries,” Dr. McClellan added.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview.

“We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she said, “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The college started its certification program, “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said. “Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of procedures Medicare covers for its beneficiaries. Previously, only gastric bypass was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Further, coverage is limited to obese patients with one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the ACS's bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

Medicare's national coverage decision on bariatric surgery expands the population for which the program will cover the procedure, but specifies that the procedure must be done at a highly qualified center.

The Centers for Medicare and Medicaid Services originally proposed to exclude patients aged 65 years and older from coverage, based on the significant surgical risks seen in studies of this population. But in reviewing new data and analyses, the agency determined that similar outcomes could be obtained in patients of all ages, provided that the surgery was done in facilities capable of handling large numbers of these procedures and was performed by highly qualified surgeons.

This means that patients must seek care in facilities certified by certain medical organizations, the agency said.

In its national coverage decision, CMS said it had evaluated the certification programs of the American College of Surgeons (ACS) and the American Society for Bariatric Surgery and determined that facilities deemed Centers of Excellence by either organization would be able to produce the best surgical results.

In announcing the national coverage decision, Dr. Mark B. McClellan, CMS administrator, said that bariatric surgery “is not the first option for obesity treatment, but when performed by expert surgeons, it is an important option for some of our beneficiaries. While we want to see more evidence on the benefits and risks of this procedure, some centers have demonstrated high success rates, and we want to ensure access to the most up-to-date treatment alternatives for our beneficiaries,” Dr. McClellan added.

The ACS devised its standards “for anybody performing this surgery in adults of any age,” Dr. R. Scott Jones, the ACS's director of the division of research and optimal patient care, said in an interview.

“We've got a big problem with obesity, so it's important for the public to know that they can go to a hospital that meets standards that are subject to scrutiny.”

Evidence regarding the benefits of the surgery is more limited for the over-65 population, Cynthia A. Brown, director of advocacy and health policy at ACS, said in an interview.

Nevertheless, she said, “the procedure is valuable, and ought to be covered as part of the process that includes data collection and quality monitoring. And that's what CMS is doing.”

The college started its certification program, “because of concerns on what happens when new technology gets disseminated into the community and used in specialized facilities,” Ms. Brown said. “Our certification program addresses those issues, as well as data collection, to monitor outcomes.”

The national coverage decision also expands the types of procedures Medicare covers for its beneficiaries. Previously, only gastric bypass was covered; now the list also includes open or laparoscopic Roux-en-Y bypass, laparoscopic adjustable gastric banding, and open or laparoscopic biliopancreatic diversion with duodenal switch.

Further, coverage is limited to obese patients with one or more comorbidities, such as hypertension, type 2 diabetes, osteoarthritis, or coronary heart disease, according to CMS.

More information on the ACS's bariatric surgery certification program is available at www.facs.org/cqi/bscn/index.htmlwww.cms.hhs.gov/center/coverage.asp

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We anticipate action on the issue this year,” said Carol Guthrie, an aide to the senator, in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “These accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee.

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value and relief from mandates, Mr. Northrup said.

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We anticipate action on the issue this year,” said Carol Guthrie, an aide to the senator, in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “These accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee.

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value and relief from mandates, Mr. Northrup said.

WASHINGTON — A permanent fix to the Medicare physician fee schedule “will be a difficult bill to pass through Congress,” Mark Hayes, a majority spokesman for the Senate Finance Committee, said at a conference sponsored by AcademyHealth.

“It's an expensive proposition in the current budget climate we're in,” Mr. Hayes said, voicing the concerns of other Republican staff members who participated in a discussion on the 2006 health care agenda. This year's midterm congressional election also will play a role in shaping progress on this issue, he said.

Driving the cuts in pay is the sustainable growth rate (SGR), a component of the Medicare payment formula that ties medical spending to the ups and downs of the national economy and determines the conversion factor update each year. Errors made to the formula in 1998 and 1999 led to a 5.4% decrease in physician payments in 2002 and will continue to cause decreases until the process is changed.

In recent years, Congress has staved off additional reductions by providing small increases in pay. This year's Deficit Reduction Act provided another 1-year fix to the physician payment issue, a “0%” update, instead of a fee increase.

“Unfortunately, under the existing formula, physicians are expected to take another 4.4% reduction in 2007,” said Chuck Clapton, chief counsel for the House Energy and Commerce Committee's subcommittee on health.

“We have to make sure that beneficiaries continue to get access to physician services,” Mr. Clapton said. At some point, this will require yet another short-term fix for 2007, but for the long term, “it's my chairman's [Rep. Joe Barton (R-Tex.)] vote that we take more [systematic] steps to address some of the underlying problems that led to these recurring issues.”

Pay for performance should factor into this reform, Mr. Clapton said. “We should eventually move toward systems built on rewarding for high-quality services.”

Sen. Max Baucus (D-Mont.), ranking member of the Senate Finance Committee, agreed that the issue was complex and expensive. “We anticipate action on the issue this year,” said Carol Guthrie, an aide to the senator, in an interview. “Sen. Baucus feels that it's vital, given our country's limited pool of health care dollars, to recognize and encourage excellent provider care with pay-for-performance measures.”

Sen. Baucus will continue to work with Sen. Chuck Grassley (R-Iowa), chair of the Finance Committee, to approve the pay-for-performance legislation they wrote together, Ms. Guthrie said. “Sen. Baucus was very disappointed to see that most pay-for-performance provisions were stripped from the [Deficit Reduction Act].”

The panel also touched upon health savings accounts, with the Republican staffers supporting the approach as an affordable health care option that's already shown signs of success.

Congressional Democrats have historically criticized these plans for attracting only the young, healthy, and wealthy. This is what health care analysts call “adverse selection,” Sen. Baucus said in a recent statement. “Encouraging healthier Americans to choose these accounts and high-deductible plans will make health care more expensive for those who stay behind in traditional coverage,” he said. “These accounts will lead to a weaker health care system, not a stronger one.”

Other issues on the congressional health care agenda in 2006 include:

▸ Medicaid's waiver process. With the flexibility that the Deficit Reduction Act provided to the states, “we believe we will have a fresh look at [Medicaid's] 1115 waiver process,” Mr. Hayes said. The waivers give states the authority to make broad changes in eligibility, benefits, or cost-sharing in Medicaid, providing additional elbow room to test innovative coverage options.

Although it's been a necessary element for states to manage their Medicaid programs, it's still largely operating the way it did in 1965, he said. “We're looking for more transparency, more accountability between the states and the budget neutrality requirements, and also more examination about the lessons learned about those demonstrations, to really turn that program into the demonstration program it was intended to be.”

▸ State Children's Health Insurance Program. SCHIP is back on agenda this year, because a number of states are facing shortfalls in 2007 for the program, Mr. Hayes said. “We want to make sure that health coverage for children is protected.”

▸ Health information technology networks. The health care industry appears to be moving toward paperless systems, so it would be beneficial to come to some agreement on standards for an interoperable system, said Stephen J. Northrup, health policy staff director for the Senate Health, Education, Labor, and Pensions Committee.

▸ Affordable coverage for small businesses. The Senate Health, Education, Labor, and Pensions Committee is working on legislation to give small businesses newer and more affordable options to pool their resources, offering them more market value and relief from mandates, Mr. Northrup said.