MedPAC report takes aim at ancillary services, SGR reform

July 14, 2011

Two issues of concern to urologists?compensation for ancillary services and the sustainable growth rate (SGR) formula?are among the issues discussed by the Medicare Payment Advisory Commission (MedPAC) in its June 2011 report to Congress.

Two issues of concern to urologists-compensation for ancillary services and the sustainable growth rate (SGR) formula-are among the issues discussed by the Medicare Payment Advisory Commission (MedPAC) in its June 2011 report to Congress.

MedPAC said the report builds on previous recommendations to change Medicare’s payment systems to reward quality and efficiency in the delivery of health care services instead of rewarding increased volume and intensity.

"The commission believes payment reform is a necessary, although not sufficient, condition for reform of the health care delivery system," said MedPAC Chairman Glenn Hackbarth, JD.

The commission makes a set of recommendations concerning ancillary services, such as diagnostic imaging and other tests.

"In the last decade, ancillary services have reached high levels of use, fueled at least in part by unduly high payments," MedPAC said in a press release. "These recommendations improve payment accuracy to reduce providers’ financial incentives to order more ancillary services, while strengthening clinical support tools to improve appropriate use of these services."

(Look for a more detailed discussion of the current battle over Medicare payment for advanced imaging services in the August 2011 issue of Urology Times.)

In the report, the commission also examines the SGR system. For 2012, the SGR prescribes a 30% reduction to physician fee schedule payments unless Congress intervenes.

MedPAC said it is concerned that the magnitude of this payment reduction, coupled with repeated short-term "fixes" to prevent the cut, undermine provider and beneficiary confidence in Medicare and raise concerns about beneficiaries’ access to physician services. The SGR in its current form is unworkable, according to MedPAC, and the commission’s report describes a series of policies for further consideration that could collectively replace the SGR, reduce the volume incentives under fee-for-service, and increase Medicare’s valuation of primary care.