Challenges Remain in Physician Payment Reform

Following up on my post yesterday about shared savings, John O’Shea writes today in the Health Affairs blog, that challenges remain with regard to physician payment reform, now that President Obama has signed the Medicare Access and CHIP Reauthorization Act (MACRA) in April.

MACRA repeals the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS).

The SGR has been blamed for causing instability and uncertainty among physicians for over a decade, and that led to 17 overrides of scheduled fee cuts, at a cost of over $ 150 billion.

The passage of MACRA, O’Shea wrote, raises new questions about where the US health care system is headed in the post-SGR world of payment and delivery reform.

Yet, before MACRA was signed into law, HHS Secretary Burwell announced a major initiative calling for 30 % of Medicare payments to be value-based through the use of alternative payment models (APMs) by 2016, and 50% by 2018.

HHS also set a goal of tying 85% of all traditional Medicare payments to quality or value by 2016, and 90% by 2018.

O’Shea reported there are reasons for caution. These policy changes, following calls to move from the current volume-based, fee-for-service (FFS) system to a value-based system that pays for patient outcomes, rather than for individual services, present major challenges to achieving the goal of value-based health care, the goal of any real health reform initiative.

One of the APMs O’Shea discussed is Value-based purchasing (VBP), which is the concept behind APMs, includes a broad set of performance-based payment strategies that attempt to use financial incentives to influence provider performance, such as the Shared Savings Program mentioned yesterday.

Another APMs is the Merit-Based Incentive Payment System (MIPS) [don’t you just love how the government comes up with these abbreviations?], a modified FFS system, which is basically a Pay-for-Performance (P4P) program.

The overall early results of these initiatives, as well as possible flaws, make the long term viability of these models uncertain.

With regard to P4P programs, a 2014 RAND report looked at 49 studies examining the effect of P4P on process and intermediate outcome measures, and found that the overall results were mixed, and that any identified effects were relatively small.

According to the lead author of the study, Cheryl Damberg, “The evidence from the past decade is that pay for performance had modest effects on closing the quality gap.” A basic flaw in the model is the reality that meaningful patient-centered outcome measures remain elusive.

ACOs, as I wrote about yesterday, are another APM; and O’Shea reported that their ability to generate savings to share with participants is so far not encouraging. He points to early results from the Pioneer ACO program that determined that of the 23 ACOs that participated in 2013, only 11 earned any shared savings, which totaled about $41 million. Six ACOs lost a total of $25 million. The results from a similar study in 2014 showed improvement, but the long-term outlook is still unclear.

What is the impact on the practice of medicine?

What O’Shea found was that physicians currently labor under an increasingly burdensome and often meaningless number of reporting requirements that take time away from patients, and fail to help them improve quality of care.

Accordingly, a commentary O’Shea cited from the New England Journal of Medicine said that, “the quality-measurement enterprise in US health care is troubled.”

A recent CMS report, O’Shea mentioned, said that 40% of Medicare providers will face 1.5% cuts for failing to submit data to the Physician Quality Reporting System.

Because of this, many public and private payers are tying larger amounts of provider payments to a growing number of largely meaningless measures.

O’Shea said that there are two areas of concern, given the plethora of payment and delivery reform initiatives: the administrative burden on physicians, and the push towards greater consolidation.

Nearly half, or 46% of doctors who reported said that they felt burned out in 2014. A main reason cited by the physicians was the increasing administrative burden.

What does the mean?

Well, having slogged through an online Health Care Quality course as part of my MHA degree program, the myriad abbreviations mentioned in Mr. O’Shea’s article does not surprise me. CMS and HHS has for years developed all kinds of initiatives and programs to influence and alter behavior of all stakeholders in our health care system.

As “Uncle” Walter Cronkite once said, “America’s health care system is neither healthy, caring, nor a system.” And that was before the passage of the ACA.

But for the purposes of this blog, and in keeping with the point of the last article where it was said that what happens in health care affects workers’ comp. then I think you can agree that these initiatives and programs, while well-meaning, may make things worse in the future, but not because the idea behind the ACA or the law itself is bad, but because we Americans cannot do anything right until we try everything else, a la Winston Churchill.

If that is the case, then believing that by doing the same things over and over again, that by following everyone else off the cliff of unregulated, employer-based, multi-payer health care, and by not opening the workers’ comp system to real alternatives, especially for surgery, then nothing will ever change.

We will continue to see more new initiatives and programs from CMS, and the results will be dismal, and the impact on workers’ comp will be felt eventually. That is, unless you open up your minds to new ways of thinking.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

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