qotd: CMS reneges on mandated 0.5% Medicare rate increase

Medscape Medical News
November 3, 2015
Physicians Decry Broken Promise of Medicare Raise in 2016
By Robert Lowes

The law that repealed Medicare's sustainable growth rate (SGR) formula
for physician pay called for an annual raise of 0.5% from 2016 through
2019 as part of a transition to value-based reimbursement.

When Congress passed the law in April, some leaders of organized
medicine noted that the modest raise lagged behind the inflation rate,
but said it was better than nothing. It was certainly better than the
disastrous 21% pay cut that the SGR formula would have triggered in
2016. Medical societies sold their membership on the legislation, called
the Medicare Access and CHIP Reauthorization Act (MACRA), in part by
saying it would stabilize Medicare rates for several years.

However, the promised raise of 0.5% turned into a 0.3% pay cut in the
fine print of the final 2016 Medicare fee schedule released last week.
The reason? The Affordable Care Act (ACA) and several other laws that
set Medicare reimbursement policy trumped MACRA.

Organized medicine isn't taking it too well.

"Physicians were told that they would get an increase, and they're not,"
said Wanda Filer, MD, president of the American Academy of Family
Physicians (AAFP). "It's a morale breaker."

In its 2016 fee schedule, the Centers for Medicare and Medicaid Services
(CMS) walked through the math that produced the tiny pay cut in 2016.
(For a fairly detailed explanation, click on the Medscape link below.)

Organized medicine saw the stealth pay cut coming in the 2016 fee
schedule when it was released in draft form last summer for public
comment. At that time, CMS said that its misvalued codes initiative had
reduced fee-for-service spending by roughly 0.25%. In response, medical
societies such as the AAFP, the American College of Physicians, and the
American Medical Association, as well as the Medical Group Management
Association (MGMA), urged CMS to tweak its methodology for essentially
repricing codes and calculating the savings so it could hit the 1%
target and avoid canceling the MACRA raise. MGMA called the agency's
approach "narrow." The association recommended, among other things, that
CMS base its calculations on a broader group of repriced codes than what
the agency used.

In the final fee schedule issued last week, CMS stood its ground. "We
continue to believe this approach is appropriate and compliant with
statutory directives," it said. The agency repeatedly stated that it was
bound by "current law" — in other words, MACRA, the ACA, PAMA, and ABLE.

Halee Fischer-Wright, MD, the president and CEO of MGMA, said her group
is "extremely disappointed that CMS failed to meet the [1%] target set
by Congress."

"Instead, CMS's inaction will result in an across-the-board cut to
physicians in 2016," Dr Fischer-Wright said in a statement given to
Medscape Medical News. "For all the ambitious plans touted by the agency
to move Medicare toward a value-based payment system for physicians, its
inability to adequately review misvalued codes under current
fee-for-service calls into question how CMS will be able to implement
far more sophisticated payment models in the future."

Primary care physicians will feel the 0.3% Medicare rate cut more keenly
than their specialist peers, said AAFP president Dr Filer.

"I think primary care physicians are working a minimum margin and
working frequently at a deficit," she said. "Practice costs haven't
declined, and primary care has been undervalued for a very long time.

"Any cut is a financial hit."

The comments from Dr Filer and Dr Fischer-Wright stand in contrast to
what the White House says about MACRA on its website: "At last, the
doctors who care for seniors and many Americans with disabilities will
no longer have to worry that about the possibility of an arbitrary cut
in their pay."

http://www.medscape.com/viewarticle/853878

***

Quote of the Day
March 24, 2015
SGR Fix: APMs threaten physician burnout (RAND)
Comment by Don McCanne

HR 1470, which Congress is scheduled to approve in only two days (March
26), would replace the flawed Sustainable Growth Rate (SGR) method of
determining Medicare payments with a new Merit-based Incentive Payment
System (MIPS). MIPS introduces considerable administrative complexity
which would be a great burden to physicians, but the legislation allows
physicians to opt out of MIPS by joining Alternative Payment Models
(APMs) such as Accountable Care Organizations (ACOs) or Patient Centered
Medical Homes (PCMHs). This RAND study of APMs reveals that physician
members of APMs are at very high risk of BURNOUT.

http://www.pnhp.org/news/2015/march/sgr-fix-apms-threaten-physician-burnout-rand

***


Comment by Don McCanne

Earlier this year medical societies celebrated their success in helping
to get Congress to eliminate the Sustainable Growth Rate (SGR) formula -
a formula that could have resulted in a 21% reduction in Medicare
payments - and replace it with a 0.5% yearly increase for the next few
years. There are two important stories here.

The first is that SGR would be replaced with a new onerous Merit-based
Incentive Payment System (MIPS) which would be used to push physicians
into Alternative Payment Models (APMs) such as Accountable Care
Organizations (ACOs) or Patient Centered Medical Homes (PCMHs). At that
time RAND warned that physician members of APMs are at very high risk of
burnout. Trading an SGR formula that was never enforced for a career in
misery is hardly a rational move. But at least they got a 0.5% raise, or
did they?

The second important issue is that CMS has reneged on the legislated
promise of a 0.5% increase and instead is reducing rates in the
traditional fee-for-service Medicare program by 0.3%. This is part of a
long-term strategy to control Medicare spending by keeping rate
increases below the rate of inflation. Over time, physicians have been
struggling to meet expenses of caring for their Medicare patients and
still have anything left to take home, with inflation eating away at
their payments.

But more than that, this decision appeared to represent one more example
of CMS supporting the privatization of Medicare. We have reported
several examples of CMS overriding the legislated mandate to reduce
overpayments to private Medicare Advantage (MA) plans. Each year they
have been able to use administrative chicanery to convert the mandated
reduction into an increase in payments for the private MA plans. But
this year they are also using administrative chicanery to convert the
legislatively mandated increase in payments into a decrease in the
traditional FFS Medicare program.

Another example is that the government has reneged on their mandate to
pay the costs that exceeded the risk corridors for the CO-OP plans,
contributing to the financial collapse of over half of them this year.
Although the CO-OPs were not Medicare plans, they were quasi-public
plans that were designed to compete with the private insurers. Do you
really believe that the government can readily find funds year after
year to shore up the private Medicare Advantage plans, but in the first
year of the CO-OPs they are incapable of finding more than 13% of the
mandated funds to support risk corridor losses for these organizations?

Our government, under the Obama administration, is actively moving
towards privatization of our public insurance programs. Under the
private insurers we are seeing higher costs, impairment of access,
financial hardship for patients, and no improvement in quality or outcomes.

We need single payer, but we also need to elect responsible stewards for
our public programs.