MedPAC Votes to Cut Payments to Specialists

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted last month to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission's September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists' payments by 17% over 3 years, followed by a freeze for 7 years more.

The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

“The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value,” said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

▸ The SGR would be repealed and physicians fees would be stabilized and set by statute during a 5-year transition period.

▸ A physician led initiative would work to decrease use of low-value services.

▸ Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

Neurologists argued against the plan's preferential treatment towards primary care.

“We object strenuously to recommendation number one that splits primary care from all other specialties without recognizing all of the actual treatment that physicians provide to patients,” Michael Amery, legislative counsel to the American Academy of Neurology, said at the meeting. “Neurologists [that] treat people with Alzheimer's, ALS, Parkinson's, [and] epilepsy, often times become the primary care providers to those patients.”

The American College of Cardiology also registered its displeasure.

“The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship,” Dr. Jack Lewin, CEO of the, said in a statement. “Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes.”

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations.

Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

Dr. Ronald D. Castellanos, a MedPAC commissioner and a Florida urologist, said he considered it “extremely disturbing” that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

Despite opposition from fellow members and physician groups, MedPAC chairman Glenn Hackbarth said an imperfect plan is better than nothing.

“If we have accomplished nothing else through this exercise other than to systematically work through it and make it clear to the Congress what the implications of that policy choice are, that's an important thing in its own right,” Mr. Hackbarth said.

With a $200 billion price tag, the MedPAC recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC staff document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

For example, the proposal outlines $235 billion in possible savings from pharmaceuticals ($75 billion), postacute care ($49 billion), beneficiaries ($33 billion), hospitals ($26 billion), labs ($21 billion), Medicare Advantage ($12 billion), and durable medical equipment ($14 billion).

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted last month to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission's September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists' payments by 17% over 3 years, followed by a freeze for 7 years more.

The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

“The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value,” said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

▸ The SGR would be repealed and physicians fees would be stabilized and set by statute during a 5-year transition period.

▸ A physician led initiative would work to decrease use of low-value services.

▸ Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

Neurologists argued against the plan's preferential treatment towards primary care.

“We object strenuously to recommendation number one that splits primary care from all other specialties without recognizing all of the actual treatment that physicians provide to patients,” Michael Amery, legislative counsel to the American Academy of Neurology, said at the meeting. “Neurologists [that] treat people with Alzheimer's, ALS, Parkinson's, [and] epilepsy, often times become the primary care providers to those patients.”

The American College of Cardiology also registered its displeasure.

“The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship,” Dr. Jack Lewin, CEO of the, said in a statement. “Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes.”

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations.

Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

Dr. Ronald D. Castellanos, a MedPAC commissioner and a Florida urologist, said he considered it “extremely disturbing” that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

Despite opposition from fellow members and physician groups, MedPAC chairman Glenn Hackbarth said an imperfect plan is better than nothing.

“If we have accomplished nothing else through this exercise other than to systematically work through it and make it clear to the Congress what the implications of that policy choice are, that's an important thing in its own right,” Mr. Hackbarth said.

With a $200 billion price tag, the MedPAC recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC staff document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

For example, the proposal outlines $235 billion in possible savings from pharmaceuticals ($75 billion), postacute care ($49 billion), beneficiaries ($33 billion), hospitals ($26 billion), labs ($21 billion), Medicare Advantage ($12 billion), and durable medical equipment ($14 billion).

WASHINGTON – Expert members of the Medicare Payment Advisory Commission voted last month to present their Medicare physician pay fix plan to Congress, despite the objections of primary care and specialist physician organizations.

First presented at the commission's September meeting, the MedPAC recommendations aim to, among other things, avoid the looming almost-30% Medicare pay cut on Jan. 1 under the Sustainable Growth Rate (SGR) formula.

To do so, the commissioners advise freezing most Medicare payments to primary care physicians for 10 years and cutting specialists' payments by 17% over 3 years, followed by a freeze for 7 years more.

The recommendation passed by a vote of 15-2.

Physician organizations said the recommendations are a less-than-adequate alternative to the current system.

“The MedPAC proposal, we believe, will unintentionally undermine the goal of transitioning to new payment models aligned with value,” said Shari Erickson, director of regulatory and insurer affairs for the American College of Physicians.

Ms. Erickson urged the committee to consider the SGR replacement proposal that ACP submitted in September to the Joint Select Committee on Deficit Reduction. Under the ACP proposal:

▸ The SGR would be repealed and physicians fees would be stabilized and set by statute during a 5-year transition period.

▸ A physician led initiative would work to decrease use of low-value services.

▸ Potential savings of $500 billion to $886 billion could be achieved via measures such as reducing defensive medicine, rewarding physicians for high-quality coordinated care, and allowing the government to negotiate prices of drugs paid by Medicare.

Neurologists argued against the plan's preferential treatment towards primary care.

“We object strenuously to recommendation number one that splits primary care from all other specialties without recognizing all of the actual treatment that physicians provide to patients,” Michael Amery, legislative counsel to the American Academy of Neurology, said at the meeting. “Neurologists [that] treat people with Alzheimer's, ALS, Parkinson's, [and] epilepsy, often times become the primary care providers to those patients.”

The American College of Cardiology also registered its displeasure.

“The proposal is not an acceptable or sustainable solution to the SGR and does nothing to promote quality or resource stewardship,” Dr. Jack Lewin, CEO of the, said in a statement. “Looming primary care shortages require focused solutions, we agree. But this proposal somewhat misaligns the interests of primary and specialty doctors, rather than focusing on incentives to work together to improve quality, efficiency, coordination of care, and outcomes.”

In advance of the MedPAC meeting, a coalition of physician groups, led by the American Medical Association, wrote to commission Chairman Glenn Hackbarth urging that the commission not adopt their proposed recommendations.

Instead, the physicians urged the commissioners to look at previous proposals put forth by groups such as the Congressional Budget Office, the Simpson-Bowles Commission, and the Senate Gang of Six.

Dr. Ronald D. Castellanos, a MedPAC commissioner and a Florida urologist, said he considered it “extremely disturbing” that a nurse practitioner that he may hire could make more money from treating the same patients, simply because of codes. He added that he believes the cuts would push some doctors into early retirement and discourage medical school students from becoming physicians.

Commission member Dr. Karen Borman, a Pennsylvania surgeon, agreed. She warned her fellow commissioners not to create even more adverse consequences than already exist with the SGR.

Despite opposition from fellow members and physician groups, MedPAC chairman Glenn Hackbarth said an imperfect plan is better than nothing.

“If we have accomplished nothing else through this exercise other than to systematically work through it and make it clear to the Congress what the implications of that policy choice are, that's an important thing in its own right,” Mr. Hackbarth said.

With a $200 billion price tag, the MedPAC recommendations reduce the estimated cost of replacing the SGR by $100 billion, according to a MedPAC staff document. Outside of pay cuts and freezes, the proposal would result in a 2% annual increase in federal spending per Medicare beneficiary, but is budget neutral based on a number of possible savings identified.

For example, the proposal outlines $235 billion in possible savings from pharmaceuticals ($75 billion), postacute care ($49 billion), beneficiaries ($33 billion), hospitals ($26 billion), labs ($21 billion), Medicare Advantage ($12 billion), and durable medical equipment ($14 billion).