Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Medicare Payment Overhaul, Malpractice Revisions Likely Off the Table This Year, Docs Told

MARCH 14, 2006 -- Congress won't overhaul Medicare's physician payment formula this year, nor will it revise the nation's medical malpractice laws, a key House lawmaker told doctors Tuesday. But doctors can begin laying the groundwork in 2006 for capturing those two lobbying prizes eventually, speakers suggested at the American Medical Association's National Advocacy Conference in Washington.

Regarding the payment formula, "this is not a good year quite frankly to expect any major long-term reform," said Rep. Nathan Deal, R-Ga., chairman of the House Energy and Commerce Health Subcommittee. Deal explained that lawmakers are likely to shy away from controversy in an election year.

Under the current formula, Medicare payments to physicians will drop a total of 34 percent over the next eight years, according to an AMA estimate. Congress in recent years has blocked scheduled cuts under the formula with one- and two-year "payment fixes," and 2006 is likely to be no exception. "You probably will see us having to wrestle with another annual adjustment" this year, Deal said.

Deal also noted that House-passed revisions of the nation's medical malpractice laws (HR 5) got bogged down in the Senate last year and said the same is likely to be true this year.

But doctors can do their part to help the Bush administration move away from the current "sustainable growth rate" (SGR) payment formula, Centers for Medicare and Medicaid Services Administrator Mark McClellan told the meeting.

McClellan endorsed a policy last fall that would block cuts under the SGR and substitute them with modest increases in physician payment if doctors agreed to report data on the quality of their care under certain performance measures.

Congress did not tie higher payment to reporting data on performance measures, but CMS has announced a system of voluntary physician reporting to help build the foundation for such a system, which relies on a "starter set" of 16 measures.

McClellan urged the AMA Tuesday to encourage doctors to take part in the "Physicians Voluntary Reporting Program," saying it will give physicians valuable experience preparing for coming changes in Medicare payment and allow them greater input on how the system should be run.

By acknowledging the need to move away from the SGR system, McClellan seemed to suggest that the administration will act eventually to replace it. But McClellan hinted that doctors must hold up their end of the deal by moving ahead with efforts to help develop performance measures. McClellan said he expects AMA to stick to an "aggressive timetable" for developing more measures.

Under the voluntary program, "CMS will also generate confidential reports for your practices to let you know how you perform compared to other people in the same specialty," he said. "The results will not be made public."

McClellan also said CMS is working with other organizations to develop measures of the cost of care delivered by physicians, referring more to the development of cost measures than he has in past speeches.

Under the system, "physicians will receive clear standardized reports of the kind of costs that patients are incurring," McClellan said. The CMS chief said the measures are being developed with the Medicare Payment Advisory Commission (MedPAC) and the Ambulatory Care Quality Alliance, a consortium of government agencies, health plans, and doctor organizations.

MedPAC's March 2005 report to Congress explained the basis for developing cost measures, saying research suggests that "the nation could spend less on health care, without sacrificing quality, if physicians whose practice styles are more resource intensive . . . provided fewer diagnostic services, used fewer subspecialists, used hospitals and intensive care units less frequently as a site of care, and did fewer minor procedures."

Savings could flow from measuring the resource use of individual doctors compared to their peers or to what medical literature recommends, MedPAC said. Doctors would be given this feedback, allowing them to adjust their practice styles. "When physicians are able to use this information in tandem with giving this information on their quality of care, it will provide a foundation for improving the value of care received by beneficiaries," MedPAC explained.

AMA members also heard from Sen. Hillary Rodham Clinton, D-N.Y., who pitched a proposal for ending the stalemate over medical liability reform based on the "Sorry Works" program at the University of Michigan's health care system.

Under the system, doctors receive liability protections for promptly disclosing medical errors, apologizing to the patients harmed, and entering into a system of quick compensation of patients. Errors are analyzed to determine how systems of care can be changed to prevent their recurrence. Clinton said the system has sharply reduced the number of suits filed against the University of Michigan and their associated costs, while helping to reduce medical errors.

Under legislation (S 1784) introduced Sept. 28, 2005, by Clinton and Illinois Democratic Senator Barack Obama, HHS would give grants to foster adoption of such systems throughout the country.

AMA however, has been focused on establishing national caps on pain and suffering and punitive damage awards. Clinton called that a "Band-Aid" approach that doesn't get at the root of the problem of rising malpractice costs, but retreated somewhat when a questioner vigorously defended a California law on which HR 5 is based.

The physician said malpractice premiums are much lower in the state but Clinton countered that other insurance reforms accompanying California's cap had much to do with lower costs. "I am not saying caps shouldn't be part of the solution but it's not the only solution," she said.

Publication Details