Based on the recommendations of the Medicare Payment Advisory Commission early this year, Congress and the Centers for Medicare and Medicaid Services are considering a pay-for-performance program for Medicare that could be implemented for all physicians, including neurosurgeons, as soon as January 2006.
According to the “budget neutral” scheme suggested by MedPAC, payment for all physician services would be reduced between 1 percent and 2 percent in 2006, and physicians would have the opportunity to earn that money back if they meet certain quality measures. MedPAC anticipates that each year more and more money would be allocated through the P4P system until eventually between 20 percent and 30 percent of physician reimbursement is determined by P4P. Reductions made to fund P4P would be in addition to the cuts already required under the current sustainable growth rate payment formula: Physicians are facing reimbursement cuts of approximately 5 percent each year from 2006 through 2013 unless Congress or the administration takes action to prevent these reductions.
Quality or Cost?
Under a P4P program, evidence-based quality measures are developed and physicians are paid according to how well they perform in relation to these measures. There are a variety of measurement types that can be used and they vary in sophistication. Physicians who meet the quality measures receive bonus payments; those who do not, receive reduced payments.
The current push to implement P4P in Medicare is coming from private insurers, who believe their own programs will not be successful until Medicare is on board; big business; consumer groups; and several physician organizations, including the American College of Physicians. All of these groups hope P4P will improve quality and reduce overall healthcare costs. There is no evidence, however, that the P4P programs do either of these things.
There are several P4P models in place, and Congress and the CMS are hoping to use these past experiences as a springboard for implementing P4P within Medicare for all physicians on Jan. 1, 2006. For example, many private insurers have attempted to implement P4P programs involving the management of chronic illnesses in the primary care setting; in February, the CMS announced a 10-site demonstration project. Several programs also have been set up for cardiac surgery, and the American College of Surgeons has begun working on specific criteria that may be applicable to surgeons. The CMS also set up a P4P program for hospitals last year.
| Congress and the CMS are hoping to use past experiences as a springboard for implementing P4P within Medicare for all physicians on Jan. 1, 2006. |
On Capitol Hill, legislators are in the process of holding hearings on P4P to determine the possibility of implementing MedPAC’s recommendations. Neurosurgery has participated in these hearings through the Alliance of Specialty Medicine. Publicly, several legislators have stated they will not address the Medicare physician payment cuts that will take place between 2006 and 2013 unless physicians first agree to implement a P4P program. On the other side, many physician groups, including neurosurgery, state they cannot even consider a P4P program until the cuts are eliminated, the Medicare physician reimbursement system is stabilized, and quality measures are developed and pilot-tested for each specialty.
Many physician groups also believe that:
- meaningful measures for all specialties cannot be developed by Jan. 1, 2006;
- P4P is not desirable for all specialties;
- money should not be taken from all doctors to pay for any P4P programs; and
- Medicare cannot base a P4P program on claims-based data.
In addition, one of the measures most likely to be first implemented is the use of electronic medical records, and many feel this is another unfunded mandate that will have a disproportionate affect on small specialties and doctors in small practices. While P4P appears to have broad Congressional support, it is too soon to tell exactly how this debate will unfold. Policymakers are still sorting out all the different approaches to P4P and how best to begin implementing such a system, including whether or not the system will be budget neutral as MedPAC recommended, and/or in the context of overall sustainable growth rate formula reform. Furthermore, Congress is currently considering a wide variety of budget cuts, including reductions in Medicare spending.
Clearly, organized medicine faces significant challenges in ensuring a rational, nonpunitive payment system that rewards quality in a cost-effective manner. The American Association of Neurological Surgeons and the Congress of Neurological Surgeons will continue to lobby on this issue and will keep neurosurgeons informed throughout the year. At some point in the coming months, it is likely that AANS and CNS members will be asked to engage in grassroots activism on these issues.
Barbara E. Peck, JD, is a senior Washington associate in the AANS/CNS Washington office.