Spotlight on Medicare
Payment Policy Reform
Ronald Szabat, J.D., L.L.M., Director
Governmental and Legal Affairs
he
curtain has risen. With fewer than 100 legislative
days left in 2006 for Congress to act, the staging
for this year’s production of Medicare Part
B physician payment reform is rapidly taking shape.
Competing for attention is a focus on the asserted
need to slow overall Medicare spending.
Some critics and skeptics say that the theater could
be dark early this year, with an over-cost production
simply shutting down with no real resolution or change.
Looming large for all physicians is the unrelenting
Medicare Sustainable Growth Rate (SGR) formula that
threatens fresh cuts of 5 percent starting in 2007,
only recently averted for just one year. Added to
this misery could be other reductions as a result
of the Medicare five-year review, practice expense
changes and other payment cuts based on geographic
variables.
Where can Congress turn for guidance to get this show
on the road? Fortunately its own advisory panel, MedPAC,
or the Medicare Payment Advisory Commission, continues
to shed its bright spotlight, if only Congress would
listen, honor and consider its commitment to the elderly
through rational reimbursement policy.
Just last month, MedPAC released another periodic
Report to the Congress: Medicare Payment Policy.
In its latest March 2006 report, MedPAC called for
Congress to increase payments for physician services
by the projected change in input prices less an expected
productivity growth of 0.9 percent for 2007. Translation:
MedPAC is telling Congress that positive update’s
are essential for Medicare program integrity.
As noted by MedPAC, “current law calls for substantial
negative updates from 2007 to 2011, under the [SGR]
formula.” Consistent with its past policy stance,
MedPAC has again signaled to Congress that it “does
not support these sustained fee cuts because over
the long run they could threaten beneficiary access
to physician services.” As ASA is already telling
the Hill, the current abnormally low anesthesia Medicare
conversion factor, coupled with irrational payment
policies, is creating an unsustainable situation for
our academic anesthesiology programs and anesthesiologists
practicing in locales with heavy Medicare populations,
in particular.
Of added note, MedPAC also is recommending that the
Secretary of Health and Human Services should establish
a standing panel of experts to help the Centers for
Medicare & Medicaid Services identify so-called
“overvalued services” and review recommendations
from the Relative Value Scale Update Committee (RUC),
ensuring that the members of this new panel include
those with expertise in health economics, physician
payment and clinical expertise.
Of added interest, the Commission recommends that
the Secretary, in consultation with this expert panel,
should initiate the five-year review of services that
have experienced substantial changes in length of
stay, site of service, volume and practice expense
and other factors that may indicate changes in physician
work. In addition MedPAC is recommending that after
consultation with the expert panel, the Secretary
should initiate, after a specified period, reviews
of the work relative values for recently introduced
services to identify those services that should be
referred to the RUC to assess. This would be a change
from the current practice of waiting for the next
five-year review. Finally MedPAC believes that the
Secretary should review all physician services periodically
to ensure the validity of the physician fee schedule.
Needless to say, should these particular recommendations
gain “legs” in the House or Senate and
take center stage, ASA will actively lobby to refine
them.
As Congress receives and considers these important
recommendations, ASA as always will seek to reinforce
the need for sound policy justifications for congressional
action on Medicare payment policies, particularly
as they affect physician payment. Even now the House
and Senate Budget committees continue their attempts
to cobble together a working Budget Resolution for
2007, affecting the larger Medicare spending picture.
As this dynamic process unfolds and the Medicare and
health committees of jurisdiction begin their work,
please stay alert for important opportunities for
grassroots input into another year of high-stakes
drama.
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