Can Republicans and Democrats agree on an SGR fix?

Getting rid of Medicare’s SGR formula has been organized medicine’s Holy Grail.  But medicine has gotten no closer to finding a solution to the SGR than the medieval knights did in their search.  This year could be different, though.  The House and Senate both are working on bipartisan plans to repeal the SGR and reform Medicare payments, plans that are being developed with the input of physicians.

Yes, you heard that right, bipartisan plans.  At a time where Republicans and Democrats can’t seem to agree on which way is North and which way is South, they have put aside their differences (at least for now) in their search for a solution to the SGR conundrum.

And yes, you heard that right, they are listening to physicians.   On May 7, Dr. Chuck Cutler, the Chair of ACP’s Board of Regents, appeared as a witness at an SGR hearing convened by the Ways and Means Health Subcommittee.  Unlike the usual process for hearings, where the party in charge (in this case, the Republicans) picks witnesses that they know will support their views, and the minority party (in this case, the Democrats) gets to invite just one “minority” witness to represent an opinion that is usually at odds with the majority party’s views, Dr. Cutler (and the other invited witnesses) were selected on a bipartisan basis.   Dr. Cutler’s testimony proposed a pathway to repeal the SGR, provide positive and stable payments, and a transition period to better payment models aligned with value to the patient.

Then, on May 28, the House Energy and Commerce Committee, which shares responsibility for Medicare payment policies with the Ways and Means Committee, released a draft bill to repeal the SGR, provide a period of stable payments, and create an annual fee-for-service (FFS) incentive update program for physicians who report on measures relating to core clinical competencies, with an opt-out from the competency incentive program for physicians who participate in alternative payment models, such as Patient-Centered Medical Homes and Accountable Care Organizations.  The draft bill, by the committee staff’s own admission, lacks many details, such as the dollar amounts and percentage increases in the annual updates and competency update incentive program, how long the period of “stable” payments would last, and whether there would be penalties (lower FFS payments) instead of just positive incentives if physicians did not successfully participate in the competency update program.  ACP, like other medical organizations, was asked to provide the committee with recommendations on the draft bill by June 10.

Meanwhile, over at the Senate side, Senate Finance Committee chairman Max Baucus (D-MT), and ranking Republican Orrin Hatch (R-UT) invited ACP, the AMA, the American College of Surgeons and other specialty societies to provide them with input on several key questions they plan to address in an SGR bill, including how to improve the accuracy of the relative values used by Medicare to determine FFS payments, address over utilization that may be encouraged by the FFS system, and help physicians transition to new value-based payment models.  ACP’s response proposed 19 specific ways to improve the Medicare physician payment system and reduce excess and inappropriate utilization.  To improve the Medicare physician fee schedule, we recommended that Congress direct CMS to gather independent data—in addition to the Relative Value Update (RUC) process—to improve RVU accuracy; that it authorize CMS to pay physicians for the work that falls outside of a visit involved in care coordination; and that it require Medicare to redirect payments for overvalued procedures to undervalued evaluation and management services, among other steps.

To address overutilization, ACP’s recommendations to the Finance Committee included: creating an add-on to evaluation and management codes when physicians document that they have incorporated high value care clinical guidelines (such as guidelines from ACP’s High Value Care Initiative and the ABIM Foundation’s Choosing Wisely campaign) into their practices and engaged their patients in shared decision-making based on such  guidelines; developing alternatives to pre-authorization that would focus on encouraging use of appropriateness criteria by “outlier” practices rather than requiring all physicians to jump through hoops to get a test ordered; and providing physicians with transparent information on the quality and cost of care of their physician colleagues and hospitals in their community to allow them to make more informed referrals.  And, ACP proposed a step-by-step approach to stabilize Medicare payments and create positive incentives for physicians who participate in programs to improve clinical outcomes, efficiency and effectiveness.

When you think about it, the Holy Grail is to improve the Medicare physician payment system so it helps physicians deliver high quality and cost-effective care, not just to get rid of the SGR.   The result will be big changes not only in the way Medicare pays for services, but in how physicians organize and deliver care.  Getting there will not be easy, and we may again get lost along the way, but for once Congress and the medical profession together appear to be heading in the right direction.

Bob Doherty is senior vice-president, Governmental Affairs and Public Policy, American College of Physicians and blogs at The ACP Advocate Blog.

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  • Dr. Drake Ramoray

    The fact that the doctors chosen will invariably be ivory tower types who couldn’t manage a private practice office for a month without facility fees is hardly reassuring. This assumes they could even handle seeing a full schedule of patients 5 days a week in the first place.

    So you pay for performance and for how frequently physicians follow guidelines? Please don’t write an article six months after any legislation passes that people in poor rural parts of the country cant find a doctor and now doctors are all jockeying to take care of simple patients who are easier to manage. You will tell me this will be an unintended consequence of the legislation.

    Medicine will become a big game to collect as many healthy patients as possible. I already get referrals from patients who have been fired by multiple other doctors.

    Under systems like this I cant bill for time either. Complicated cancer case that requires an extended visit and coordination of care will pay the same as simple cases. Doctors will get paid more money to take care of healthier patients.

    Next time I call the plumber, the guy to fix my car, or my lawn guy I will be sure to let him know I plan to pay him in 90 days based on how good of a job a third party payer thinks he has done.

    Return the cost of non-catastrophic healthcare to the patient, and return the patient to doctors not third party payers control and watch healthcare costs go down.

    Glad my practice is expanding into clinical research for an alternative revenue stream, because I will re-direct my time and efforts when Im not only graded on how I do for the most difficult non-compliant patients, but how often I follow general guidelines on these complicated patients.

    • Alice Robertson

      The difference is the plumber didn’t sign up for that type of reimbursement plan…doctors do. Insurance is a pain for doctors, but it did bring in patients ( healthy insurance has morphed). Many self-employed think insurance payments are more than worth it (thinking of auto repair, home contractors, etc.) and they think government payments after disasters is downright Nirvana:) Oh I know…I know the peripherals…but a few people I know are sorta ambulance chaser type contractors who rush in after disasters because they claim the money is phenomenal.

      But back to performance pay. It’s a double edged sword. Dr. Jerome Groopman wrote well about this. Think about the doctors who take risky patients. Risky patients have a bad habit of dying…imagine the cheek:) Anyhoo….the doctors who take them get bad ratings because their patients die. Didn’t Dr. Groopman say he had received a “D” rating? If his writings are a true reflection of his heart for the patients he really is the true Dr. McDreamy more than worthy of a higher performance rating. It’s rigged system where those who take the healthier patients will get better grades. Sorta like the educational system…and sorta like….:)

      • Dr. Drake Ramoray

        Hi Alice,

        Thank you or the response.

        My point on insurance was more it morphing into the pay for performance component. My practice does not plan on going into such contracts (much like my plumber, lawn guy, or car mechanic would not). We will either develop a way to contract directly with primary care docs who accept direct pay or more likely establish enough of a clinical research base that we can move to direct pay and avoid taking insurance all together.

        Even this isn’t a great long term plan because if enough docs do this then the Feds will probably do something like mandate for states to get Medicaid funds that seeing a certain percentage of Medicaid patients (you know the patients who consume more resources but dont show any health benefits in the Oregon Study) as a condition of state licensure.

        I agree insurance contracts are what docs have signed up for, but I plan on avoiding pay for performance if I am able. I know one Endo who doesn’t even see patients anymore and does private clinical research full time.

        Too much red tape now but the system now but it appears it is only going to get worse. Pay me less for more complicated patients and I will find a different way to do business and focus my time.

        • Alice Robertson

          I just really think your honesty is refreshing…you bring clarity to a conversation (which as you know is often more important than agreement). You bring up many interesting aspects, but it’s just really important that patients can come and read writings like this. It’s important because honesty is so important and so often patients don’t feel like they are receiving it. So good on you!:)

          But I…again…found your comment on “red tape” of interest. The ENT’s I liked had both been into research (one at the Clinic we loved won the Ira Tresley, and the other one worked at Vanderbilt). Both are fascinating doctors and good people (there is a difference:). But our first Endo was into research and said he had to get out because of the red tape. He blamed the government for regulating it to the point he couldn’t do good research. Yet, my friend’s son teaches at Case Western and makes the bulk of his income off grants (usually government money), and he likes it very much (he’s not an MD, he’s a PhD).

          Since you so willingly answer questions I can’t resist asking you more. I understand the persnickety problems of insurance from your end (and at times find insurers flustering and don’t appreciate the thousands I have had to pay for denials…but overall I tend to be very grateful for it), but I sorta cringe that doctors would veer away from it. Concierge medicine is a nice option for those who can afford it, and set price clinics are another good option (that seem to thrive in some areas). But living where I do near Cleveland Clinic has made has made other options for patients almost impossible (some insurance plans only pay for the Clinic services, and they sorta choked a lot of doctors out of private practice (we lost a fabulous neurologist because he said he simply couldn’t function under the time constraints the Clinic places on doctors. Two really brilliant doctors we loved moved on)…which will resemble some of the tactics you have described about the government. I do completely agree with you that the government is strong arming doctors and it will get worse. I think this bait and switch mess going on with the states right now will end up a right mess with reimbursements being lowered and your opt out ability may very well not be an option at some point [the no free lunch analogy to the nth degree]).

          Off to the Clinic again and I am frustrated before going. I really dislike conglomerated medicine, realizing there are perks of good equipment, etc. but at times it looks like a type of Stepford Doctor or at least neutered ones:)

          • Dr. Drake Ramoray

            Yes concierge medicine has its flaws. All systems do. My napkin math and short term crystal ball predict that I will actually make less money this way. I am more than willing to accept that to have more control of my own practice (I am living below my means in anticipation of this eventuallity). The difficulty for a high income for me in a concierge model is I do not wish to get too involved in primary care.

            Without insurance and the overhead on my part to get paid I could probably reduce my prices. My office currently sees some patients pro-bono for our local free clinic and there isn’t any reason that I couldn’t continue to do that in a concierge model. In some ways, it could actually be even better as without an insurance middle man, I could charge differently for different levels of service or even the same level of service depending on what people can pay.

            There are many pitfalls to clinical research, especially self directed, grant funded research. I was more speaking along the lines of existing projects sponsored by pharmaceutical companies. They already have done a lot of work to get the study ready and are looking for sites for access to patients. Yes, I agree this could just make me a slave to a corporate pharmaceutical company as opposed to a corporate insurance company. The powers that be are making it very difficult for a physician to be an independent practitioner. I will have to find the best way to work under those conditions since Im not sure how much longer out independent practice will be viable.

            I have also considered starting my own consulting firm as a certified coder and upcoming ICD-10.

            Another option would be to move to academics and spend a lot of time teaching, something I very much enjoy. I havea prett niche field and some good academic connections. Most Univeristy systems are expanding as healthcsre comsolidates. Perhaps then I can start spouting useless policy ideas after I have been out of private practice for more than 10 years. Again, to a degree I would be beholden to someone, in this case an academic center.

            There are options out there, but given the current system and trends for the futur me very few of them appear to involve third party sponsored patient care as the way for me to spend the majority of my time.

          • Alice Robertson

            National Review did a great review on a doctor in a similar type of position as you (trying to remain an individual within a big behemoth system). He was able to capitalize on Obamacare by offering employers a way to afford to keep their employees insured at quite a savings (and even moreso he capitalized bigtime by selling kits about how to get started on this type of self insurance and no third party for everything except catastrophic care). I love/hate the capitalistic aspect of medicine. Love the optimism, and hope it brings….but hate the secrecy and the way clinical trial data is handled at this point.

            You know this may amuse you but reading your posts is like listening to a TED talk (except I like it much better because you answer directly and I don’t have to sit through a video presentation which I find bothersome). And I enjoy that you are not an Infomercial with a gimmick under the guise of altruism.

            Also, while reading your post above I had visions of Ben Goldacare’s….Mother Told You…type of TED talks and NY Times articles. But I am extremely thrilled you aren’t considering becoming a government bureaucrat (I was one…great pay….great benefits….far above what most are worth….but it’s the stock options and future jobs from BigPharma that often seem to be their driving force [CDC and FDA panels really bother me....we could use some NSA on their activities:)]…not truly public safety. And, yet, here we sit thinking the government has our arse covered, huh?! Ha! And people actually had so much trust in the government they even believed Obamacare was their dream come true from our Sandman President….oh reality….that cruel taskmaster:)

          • Fred Ickenham

            How refreshing to read an exchange that is well thought out and well written from both sides!

      • Jason Simpson

        “The difference is the plumber didn’t sign up for that type of reimbursement plan…doctors do.”

        Yes, and doctors who go outside the insurance system with “concierge” medicine are villified as “abandoning patients” or being greedy, uncaring people.

        Funny how plumbers never get charged with “abandoning” their customers if they insist on being paid at the time of service.

        • Alice Robertson

          I don’t know…I know many self contracting people in that type of business and they often get paid nothing. They ask for the money up front, but often have to bill and are left hanging. Plus I hate the comparison because plumbers are a self traveling type of service. To compare it to a doctor it would mean the doctor pulls up in a traveling office and can treat you in your home with all their equipment right there. But because plumbing bills are often so high doctors often use the analogy. There are far better analogies.

          I think concierge service is a great option because no matter how much people scream and want a type of French Revolution in medicine (again the comparison is a pretty terrible one) the rich will always get better care no matter what system we have. Let them have it….if they can afford it then it’s fine with me. I see no benefit for mankind if we remove these types of options. Communistic style medicine eventually harms just about everyone…and I certainly don’t see Michael Moore using it….and really can’t figure out how in the world he comes up with this stuff about the UK and Cuba.

        • Anon

’ve admitted you’re not a physician. Are you a medical professional of any kind???

  • buzzkillerjsmith

    All this and a bag of chips, Bob. How many times have we heard all this stuff, that the payment system will get better if we only give it time. That the feds feel our underpayment pain and have our backs? Fifteen, twenty years maybe. But this time you say you think it’s different. Heck, you might even really believe it.

    • Alice Robertson

      I do think most reading this article are going to agree with Buzz. It does look like a….I drank the Kool-Aid…sorta of writing. But it’s good to hope. I think it’s great that doctors are now more vocal because the hyper-Ayn
      Rand types really left many with a bad image of doctors. Yet, one
      can’t help but wonder if there is such a place where there is high
      quality care and budget cuts without patient accountability. Sometimes I
      think a segment of bully patients and greedy doctors are creating a
      real mess and I hope the Feds don’t duplicate that …but what I really want
      is a duplicate of their own comfortable niche of grand healthcare and no
      pay cuts.

      • buzzkillerjsmith

        ‘If at first you don’t succeed, try try again. Then quit. There’s no point in being a damn fool about it.”
        –WC Fields

        • Alice Robertson

          Could you expound?:)

          • buzzkillerjsmith

            Don’t take what Bob says seriously. It is crazyhappytalk from a guy who has taken the cure so to speak by getting off the front lines. If he keeps spinning this, he might be able to run the clock out till retirement.

            Have you ever noticed that folks whose lives are going well tend to have an optimistic view on things, no matter what others are going through?

            It doesn’t take long, really. The mood improves markedly almost instantaneously.

            I would submit, Alice, that this is the case with almost all the posters here who predict as rosy scenario for our profession. I have seen relentless deterioration in the practice of medicine over 24 years, relentless.

            Perhaps you would be interested in the work of Philip Tetlock, a Berkeley academic. He has amassed considerable evidence that the political predictions of experts are no better than those of regular people. Futurebabble it’s called. And make no mistake about it, these matters are political to the core.

            Bob’s comments are futurebabble. They have no merit. If what he predicts comes to pass, it will have been a stochastic event.

          • Alice Robertson

            That was quite good. Indeed, the predictive marketers often seem to find a way to capitalize on it and try to muster up a zen likeness so we don’t realize we are in the murky, mirage-like mire:)

            I know reality is a cruel taskmaster and it is obvious that practicing medicine has changed. It’s why I appreciate boards like this that allow open thought, firsthand accounts, and patient feedback…and with it in all it’s curmudgeonish ways we learn. It’s vital that we understand the war and not just the media version of grandeur or recklessness. And that doctors keep talking…patients need it because are not a type of medicinal agnostics!:)

            I will look up your recommendation. Thank you!

          • southerndoc1

            Mr. Doherty is not, and has never been, a physician.

          • buzzkillerjsmith


    • southerndoc1

      It would be hard to find a better example of the absolutely miserable quality of analysis and synthesis we get from our medical societies these days.

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