Top healthy policy expert speaks out on current state of reimbursement

May 1, 2011

Gail Wilensky, Ph.D., one of the most knowledgeable career health policy experts in Washington and someone who once ran the Medicare program, now says last year's passage of the healthcare reform law was a "wasted opportunity" because it did not include physician payment reform.

Key Points

Gail Wilensky, Ph.D., one of the most knowledgeable career health policy experts in Washington and someone who once ran the Medicare program, now says last year's passage of the healthcare reform law was a "wasted opportunity" because it did not include physician payment reform.

The former administrator of the Health Care Financing Administration (now the Centers for Medicare & Medicaid Services) and former chairwoman of the Medicare Payment Advisory Commission (MedPAC), Dr. Wilensky is an economist and now senior fellow at Project HOPE, an international health foundation.

Turning a blind eye

During the sharply divided debate last year over the Patient Protection & Affordable Care Act (PPACA), lawmakers ignored the physician payment crisis because the high cost - nearly $370 billion over 10 years, according to the Obama administration - would have made it impossible to get that law passed.

Now, physicians are faced with the possibility that Medicare fees will be slashed by 29.5 percent come Jan. 1, 2012, unless Congress either finds a permanent solution or approves another temporary fix. It is yet another looming crisis, although lawmakers on both sides of the aisle expect at least another temporary reprieve to be approved - perhaps at the last minute, as has been the practice in past years.

President Obama has proposed keeping payments flat for the next two years - a move that would cost $62 billion, according to estimates. Still, all of this comes at a time when Republicans, who now control the House of Representatives, are demanding massive budgetary cuts in order to reduce the ballooning national deficit.

"I assume it (the 29.5 percent cut) won't happen," Dr. Wilensky said. She said a temporary reprieve "will do nothing to resolve the problem. There are 8,000 different codes, and fees have been frozen, basically, for a decade." At the same time, she said, Medicare Part B spending has been growing from between 8 and 12 percent every year.

"We need to go back and reconstruct how we pay physicians, so that physicians who have good outcomes and practice in a conservative way are rewarded, and those that don't, are not," she said. "It has been clear for the past decade that this has needed to be done."