Lawmaker says Capitol Hill aims to tackle Medicare reimbursement challenges soon

July 1, 2011

The fact that Medicare reform is being debated on Capitol Hill and a near 30 percent Medicare physician pay cut looms in January appears to be moving some influential lawmakers to get serious about reforming the system used to pay Medicare doctors. House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) has said a solution is "on the short list of things getting done this summer," and two hearings were held in May as part of that process.

Key Points

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) has said a solution is "on the short list of things getting done this summer," and two hearings were held in May as part of that process.

"Let's all accept the premise that SGR has to go," Rep. Michael Burgess, M.D., (R-Texas), declared during a hearing on the Medicare sustainable growth rate (SGR) payment formula held by the Energy and Commerce Subcommittee on Health. "We need a permanent solution that is reasonable, 'updatable,' and only that will do."

No one-size-fits-all

In response to a subcommittee request, the American Academy of Dermatology Association (AADA) submitted recommendations on what to do about the SGR and how to fund the cost. AADA acknowledged the complexity of the issue and said there is no single one-size fits-all solution. It said any potential reform proposals would need to be heavily tested and measured as to how they would affect physicians' ability to treat patients, retain employees and maintain the viability of practices.

In a letter to the subcommittee on behalf of AADA, Ronald Moy, M.D., F.A.A.D., AADA president, first called for permanent repeal of the SGR, which he said "would immediately stabilize the Medicare program and allow physicians to lead the effort to reform the payment system."

The AADA recommended a five-year transition period, with statutory updates for the years 2012 to 2016, whereby physicians would receive payment increases accurately reflecting the cost of providing medical services. Dr. Moy said 44 percent of AADA's members are solo practitioners, and that they must not be unduly burdened with unproven or untested changes that might have unintended consequences or drive older physicians from practice.

Dr. Moy said more than 85 percent of dermatologists treat Medicare patients in practices that vary in size, and that several innovative models of care have been proposed to achieve goals of improved quality of care, better integrated care and improved value. Time is needed to test and study these models before implementation, he said, noting that "any transition to new physician payment models should take into account the amount of time and resources necessary for physicians to develop the infrastructure and practice capabilities to succeed under a new payment system.

"The testing and development of a wide range of alternative payment models such as bundled payments, capitation, pay for performance and accountable care organizations (ACOs) is critical prior to implementation of such models," he said.

ACO update

Regarding ACOs, the AADA president said that outside of integrated organizations such as Kaiser and Geisinger, "There are still many unknowns about the practical application of such a model for specialists, and we would support additional testing on how all of medicine would fit into such a system."

Dr. Moy said the recently proposed rule for ACOs by the Centers for Medicare and Medicaid Services (CMS) largely ignores the roles of specialists, with the exception of stating that they have the option of contracting with multiple ACOs (as opposed to primary care doctors who would be limited to just one). Dr. Moy said that until the role of specialist physicians in ACOs is better defined by CMS, organizations such as AADA would have difficulty in obtaining support from physicians "who wish to engage and help generate the savings promised in the Affordable Care Act."

In the absence of details from CMS on how dermatologists can participate in ACOs, the AADA has established an ACO Workgroup of volunteer dermatologists working to determine how to participate, he pointed out. The goal is to develop first-hand information about working within established integrated health systems to help dermatologists decide whether they should join an ACO.

In addition, Dr. Moy said the AADA has established a payment reform workgroup that is analyzing how different payment reform scenarios that have been under discussion would affect dermatologists' payments and practice.

Bob Gatty, former congressional aide, covers Washington for businesses specializing in healthcare and related issues. Contact him at bob@gattyedits.com
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