Healthcare Business News

Let geographic doc-pay cuts proceed, say MedPAC staffers

By Rich Daly
Posted: October 7, 2012 - 12:01 am ET

The staff of Congress' primary Medicare advisory body recommended allowing long-frozen geographically based payment cuts for physicians to go into effect.

The draft recommendations, on which the Medicare Payment Advisory Commission has yet to vote, applied to the program's system for supplementing or cutting physician payments based on a comparison of costs in the area in which they practice to a national average. A legislative freeze on the cuts side of that equation is scheduled to expire Dec. 31.

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MedPAC's report on the geographic adjustments is not due to Congress until June 2013, but because of the looming expiration of the freeze in cuts, “We wanted to address the topic early in the report cycle so that Congress would have the commission's ideas and analysis before the end of the year,” Kevin Hayes, a MedPAC analyst, said during its meeting last month on the issue.

The staff recommendation presented at MedPAC's Oct. 5 public meeting did not specify when the cuts should begin. The freeze was established by the Medicare Modernization Act of 2003 and has received temporary extensions since then.

The draft recommendation to lift the freeze was based on the staff findings that it has not helped improve seniors' access to physicians. The staff also concluded that the halt in physician pay cuts has not improved the quality of care Medicare beneficiaries receive or moved Medicare toward more integrated care delivery.

The staff acknowledged that the geographic-based adjustment system is not the ideal way to improve patient access but recommended the full system go into effect, in lieu of more-effective alternatives.

MedPAC reported at its Sept. 6 meeting that the areas where physicians are slated for the steepest cuts under the formula are Puerto Rico and Montana.

MedPAC is scheduled to further discuss how the geographic pricing cost index might affect access to providers at its next public meeting that begins Nov. 1.

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