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Physicians Groups Back Testing of New Forms of Medicare, Medicaid Payments

By John Reichard, CQ HealthBeat Editor

May 25, 2012 -- Physicians groups last week urged the Ways and Means Committee not to underfund the Centers for Medicare and Medicaid Services and to support testing new forms of payment through the agency's innovation center.

The groups are responding to a request from Committee Chairman Dave Camp, R-Mich., for comments on how best to fix Medicare's "Sustainable Growth Rate" (SGR) payment formula. Letters from both the American Medical Association (AMA) and the Medical Group Management Association (MGMA) call for a period of testing new payment methods designed to improve the quality and efficiency of care.

"MGMA strongly urges Congress to repeal the SGR, provide stable payments for a period of several years to allow testing of different payment and delivery models, and then allow for a transition to new models," the group's letter said. MGMA represents medical practices employing 280,000 physicians who provide more than 40 percent of the health care services delivered in the United States.

The AMA letter said a transition period would give doctors a chance to learn how to practice under alternative forms of health care delivery and payment and "to gain skills and experience in taking accountability for improving care and lowering growth in costs."

AMA's missive added that CMS must have "adequate funding and infrastructure to ensure the agency can fully engage in these transition efforts on an effective, timely, and efficient basis."

The AMA's recommendations were consistent with those of former CMS administrators offered at a May 10 Senate Finance Committee roundtable. The letter said "options for evaluation include, but are not limited to, bundled payments, partial capitation, accountable care organizations, medical homes and other hybrid approaches that couple fee-for-service payments with a risk-based bonus opportunity." These various models aim to foster team-based care that rewards doctors financially if they practice with greater efficiency and quality.

Under the SGR, doctors will see their Medicare payments cut Jan. 1 by 30.9 percent. Congress seems certain to temporarily block that cut while it pursues a longer term solution.

Camp's effort is laying the groundwork for action in the next Congress senior policy advisor with the Polsinelli Shughart law firm, Julius Hobson said. "I would be absolutely stunned out of my mind" if Congress passed a permanent overhaul of the SGR before then in the lame duck session of Congress, he said.

Camp set a May 25 deadline for comments by some 70 physicians groups and related organizations. Both Republicans and Democrats at Ways and Means have expressed a desire to come up with the right policy to replace the SGR while worrying later about how it would be paid for. "Republicans and Democrats alike agree that continuing to do temporary, short-term patches is a less than ideal way to deal with the physician payment issue," a committee spokeswoman said. "Steps must be taken toward a permanent legislative solution, and that requires gathering the input of the stakeholders."

Hobson applauded the process, which he said should have started a long time ago. "They are really starting to take that policy look at what are we going to do to fix this," he said.

The AMA letter supports pilot programs that test a common payment approach taken by Medicare and private insurers. It also spoke favorably of a "global payment program developed by Blue Cross Blue Shield of Massachusetts," in which "a single payment amount is established to cover all costs of care for a population of patients, with adjustments for types and severity of conditions, along with annual bonuses based on the quality of care delivered."

AMA said that federal pilot programs including those developed by the Center for Medicare and Medicaid Innovation "hold a great deal of promise for increasing physicians' knowledge and experience."

Republican in the House and Senate have expressed skepticism about the need for the innovation center, which was created by the health care overhaul law with $10 billion in funding.

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