Rather than creating a crisis, problems associated with the Medicare sustainable growth-rate physician reimbursement formula have created the chance to make needed reforms, according to the Medicare Payment Advisory Commission's report (PDF) to Congress.
SGR woes offer opportunity, MedPAC says
With the Congressional Budget Office projecting a 29.4% SGR-induced cut in the Medicare physician pay rate, it was noted in the MedPAC report how “the prospect of replacing the SGR could serve as a vehicle for hastening at least some elements of reform.”
“Replacing the SGR with a different payment structure—devoid of the scheduled cuts—presents an opportunity to introduce needed payment changes for fee schedule services,” the report stated. “That is, in exchange for eliminating future fee cuts, new policies could be implemented that improve and stabilize the fee schedule, restrain cost growth, and promote primary care and better coordination across sectors.”
Ideas that MedPAC said it’s considering include setting limited future updates into law; making any updates contingent on identifying and reducing fees for services considered “overpriced”; continuously improving accuracy of payments with attention given to estimates of time required to provide services; realigning payments “to help ensure an adequate supply of practitioners in cognitive (nonprocedural) specialties who focus on managing patients with chronic conditions”; and reforming delivery systems to shift away from the “disproportionate emphasis on procedures and tests” and toward a focus on care coordination and population health.
Five short-term “patches” were applied to cover scheduled Medicare physician pay cuts in 2011. This was noted by MedPAC as it also recommended that any future fee schedule updates apply for a minimum of one year and, “ideally,” should last for two and be scheduled well in advance of their applicable date.
“Significant problems arose in 2010 when updates applied to shorter time periods and were so delayed that they had to be applied retroactively,” the report concluded. “In addition to added administrative costs for CMS’ claims processing and cash flow problems for some clinical practices, the most disturbing outcome resulting from the short-term fixes was damage to patients’ and providers’ confidence in Medicare.”
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