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MedPAC Makes Strong Pitch for Primary-Care Incentive Payments

By Kerry Young, CQ Roll Call

March 13, 2015 -- Advisers to Congress recently issued a strong recommendation for a new Medicare incentive payment that would attract more physicians to work in primary care, widely seen as the backbone of the U.S. health system.

Primary-care doctors now face the loss of a 10 percent bonus on Medicare fee schedule payments at the end of this year. This bonus was created as part of the 2010 health law (PL 111-148, PL 111-152).

"Allowing the program to expire without replacement could send a poor signal to those primary care practitioners," Glenn M. Hackbarth, the chairman of the Medicare Payment Advisory Commission (MedPAC), told Congress. "While Medicare beneficiaries generally have good access to care now, access in the future could be at risk because of the aging of the population and health care workforce and the increased use of services by the newly insured."

Hackbarth highlighted this recommendation by placing it in his opening letter to the March MedPAC report to Congress, an annual document that's used by both lawmakers and the Centers for Medicare and Medicaid Services. In the months ahead, CMS will begin work on 2016 payments rules for services that covers some of the federal government's biggest expenses, such as the roughly $118 billion paid directly by Medicare for hospitals stays for the elderly and disabled. Separately, lawmakers are continually looking for ways to tweak Medicare policies, in search of both savings for taxpayers and chance to try to improve patient care.

In his letter, Hackbarth stresses that Congress needs to do more than simply extend the current approach to compensating primary-care doctors. He urges lawmakers to consider a per-beneficiary payment "as a step away from the fee-for-service payment approach" and help shift toward a model that encourages greater coordination of care. If the new payment were kept in line with the 2010 health law's fee-based bonus, many health care providers were now get a payment of about $31 a beneficiary, MedPAC said.

The report gave an example showing that a primary-care doctor with a practice that includes about 280 people enrolled in traditional Medicare would get about $8,700 in additional revenue. The average payment might be smaller, about $3,900, reflecting a smaller number of Medicare patients seen, the report said.

"The physician would essentially have that payment upfront," MedPAC Executive Director Mark E. Miller told reporters at a recent briefing. "We think this helps the physician with important primary-care functions like coordinated care, non face-to-face types of consultation and activities."

The 2010 health law's primary-care bonus totaled about 1 percent of spending through fee payments, or $664 million, MedPAC said. That averaged to about $31 for each beneficiary that year.

There's great concern among health policy experts about building up the primary-care workforce. The Health Resources and Services Administration has estimated that by 2020, the United States may have a shortage of 20,400 primary care doctors.

"This isn't going to solve or correct the primary care problem overnight, but it's an important signal that Medicare values primary care services," Miller said of the proposal for a new kind of incentive payment.

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