| It is time for neurosurgeons to take a proactive stance in the determination of our reimbursement and the measures used to establish that reimbursement, rather than letting the system dictate how we will be paid for what we do. |
While these discussions have extended across the range of providers paid by Medicare, much of the more recent discussion surrounding pay for performance, known as P4P, or what is now being called value-based purchasing, has focused on the physician community. This is similar to what has been implemented on the inpatient side, with bonuses paid to high performers and a shopping comparison Web site available for consumers. The purpose of P4P is to base physician payment on quality and efficiency instead of on a volume-related flat rate.
Most government policymakers view P4P as the great redeemer for the Medicare program. While there is no proof that a P4P system would save any money, private insurers and corporations are pushing for P4P as a way to inject accountability into the overall healthcare system. While P4P, outcomes analysis, evidence-based medicine, etc., have the potential to improve patient care, there are great concerns regarding the proposals that are starting to surface.
The U.S. Congress and the CMS have been very clear that they believe the physician community, and physician specialty organizations in particular, should develop the quality measures for their specialty. While both Congress and the CMS have stated clearly that the physician community has been put on notice that quality measures are needed, a lack of measures will not stop this project from moving forward: If we do not develop quality measures, they will be developed for us!
The American College of Surgeons, in cooperation with the CMS and others, has developed quality improvement programs, such as the Surgical Care Improvement Project and the National Surgical Quality Improvement Program, which may serve as the backbone for future efforts to establish quality improvement throughout the U.S. surgical community. The current programs include aspects related to the prevention of complications including infection, myocardial infarction, postoperative pneumonia and thrombophlebitis.
Proposed P4P Legislation
The first pieces of pay-for-performance legislation were introduced over the summer. An overview of these proposals follows, and full text of each bill is available at https://thomas.loc.gov.
Health Technology to Enhance Quality Act of 2005, S. 1262
The first piece of legislation discussing P4P was introduced by Senate Majority Leader Bill Frist of Tennessee and Sen. Hillary Rodham Clinton of New York. The bipartisan legislation chiefly addresses electronic medical records, but includes P4P language. The legislation calls on the U.S. Department of Health and Human Services to adopt uniform healthcare quality measures to assess the effectiveness, timeliness, patient self-management, patient-centeredness, efficiency and safety of care delivered by healthcare providers across all federal healthcare programs, including Medicare. In addition, the legislation directs HHS to establish a value-based purchasing pilot project using the measures developed and electronic medical records. There is no money allocated to this pilot project and the legislation directs the CMS to use existing Medicare funds as necessary.
The legislation also states that modifications should be made to the physician fee schedule to include payment for reporting on quality measures and overall improvement of healthcare quality. Payments will be made by taking a cut from all providers and reallocating the funds to those participating. Despite its prominent sponsors, this bill is considered symbolic “place-holder” legislation meant to get the ball rolling, bring attention to the issues and send a message to the healthcare community that the process has begun.
Medicare Value Purchasing Act of 2005, S. 1356
The Medicare Value Purchasing Act of 2005 was introduced by Chuck Grassley of Iowa, chair of the Senate Finance Committee, and Max Baucus of Montana, the committee’s ranking Democrat.
In summary, the bill provides for comprehensive P4P across all of Medicare, including physician services. However, physician participation will not be mandatory. Payments to physicians who do not participate will be cut by 2 percent on Jan. 1, 2007. Payments to physicians who do participate also will be cut 1 percent to 2 percent; beginning Jan. 1, 2008, participating physicians will be required to submit quality and efficiency data to the CMS in the manner determined by the CMS, and they will be responsible for any administrative costs. All data collected after Jan. 1, 2008, will be made publicly available with no legal protections. On Dec. 31, 2009, participating physicians may, or may not, receive a bonus payment of some yet to be determined amount if they meet the criteria set forth by the CMS after the fact.
Quality measures will be created by a CMS-funded, National Quality Forum-like entity that will include a variety of healthcare providers, consumer groups, purchasers and others. Physicians will know the measures used to determine payment in 2008, but will not know the thresholds and the payment levels. Sustainable growth rate cuts of 5 percent per year will continue under this bill.
Medicare Value-Based Purchasing for Physicians’ Services Act of 2005, H.R. 3617
The Medicare Value-Based Purchasing for Physicians’ Services Act of 2005 legislation was introduced by Nancy Johnson, chair of the House Ways and Means Health Subcommittee. Specifically, H.R. 3617 would restructure the Medicare physician reimbursement formula to link payment to quality incentives. It also would enact much needed reforms to preserve the financial viability of physician practices and preserve patient access to surgical care.
The bill repeals the SGR methodology used to determine the annual update for Medicare physician payments and bases future payments on the Medicare economic index, which measures annual practice inflation costs for physicians. It enacts a phased-in, value-based purchasing program over several years by starting with voluntary, initial reporting measures beginning in 2007. It bases quality measures for a value-based purchasing program on the efforts of physician specialty organizations, such as the American College of Surgeons’ work with the Surgical Care Improvement Project and the National Surgical Quality Improvement Program.
Under this process, specialty societies must bring quality measures forward by March 6, 2006, or the CMS will develop initial measures for that specialty. Reporting on quality measures will begin Jan. 1, 2007.
Payment based on performance will begin Jan. 1, 2009. Some of the measures could be based on resource use, but physicians will have the power to define risk-adjusted efficiency thresholds. Public reporting of physicians’ quality ratings will start in 2009.
ACS Supports H.R. 3617
In a recent communication from the American College of Surgeons, Thomas Russell, MD, FACS, stated:
…a P4P program must replace the SGR with a reimbursement formula that better accounts for rising practice costs, must be phased-in over several years, and must be based on the physician community’s proven quality improvement efforts. An incentive-based payment system simply cannot function in a “zero budget” environment under which increased spending on one set of services produces unsustainable payment cuts in another, and payment updates consistently fail to keep pace with the cost of providing care. The Medicare Value-Based Purchasing for Physicians’ Services Act of 2005 is the only proposal in Congress that takes these concerns into account.
The current economic and political environment presents difficult and challenging times for surgeons. Today’s problems require innovative solutions, and surgeons can and should be a part of the process of incorporating evidence-based medicine into the administration of our nation’s healthcare system.
Fernando G. Diaz, MD, PhD, is chair of the Council of State Neurosurgical Societies.
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