Reform law ignores crucial problem of doctor pay, according to Gail Wilensky, PhD

June 1, 2011

The Patient Protection and Affordable Care Act, the new health care reform law, takes some "paltry steps" toward improving the quality of medical care, but it ignores the most fundamental problem that still begs for a solution-how to fairly compensate physicians who treat Medicare patients.

Washington-The Patient Protection and Affordable Care Act (PPACA), the new health care reform law, takes some "paltry steps" toward improving the quality of medical care, but it ignores the most fundamental problem that still begs for a solution-how to fairly compensate physicians who treat Medicare patients.

"You should never confuse payment reductions in a dysfunctional system as reform," declared Dr. Wilensky, as she pointed out that Medicare savings are supposed to fund 60% of the cost of the health care reform law. "And the most dysfunctional part is how we pay physicians. Passing the bill in 2010 without including how to pay physicians was an unbelievably wasted opportunity."

Now, physicians are faced with the possibility that Medicare fees will be slashed by 29.5% come Jan. 1, 2012, unless Congress either finds a permanent solution or approves another temporary fix. President Obama has proposed keeping payments flat for the next 2 years, a move that would cost $62 billion, according to estimates. All of this comes, of course, at a time when Republicans who now control the House of Representatives are demanding massive budgetary cuts in order to reduce the ballooning national deficit.

"I assume it [the 29.5% cut] won't happen," Dr. Wilensky told urologists, but [a temporary reprieve] will do nothing to resolve the problem. There are 8,000 different codes, and fees have been frozen, basically, for a decade."

At the same time, she pointed out that spending on Medicare Part B has been growing from between 8% and 12% annually.

"We need to go back and reconstruct how we pay physicians so that physicians who have good outcomes and practice in a conservative way are rewarded, and those that don't are not," she said. "It has been clear for the past decade that this has needed to be done."

ACOs may have little impact

The PPACA includes a provision to test Accountable Care Organizations (ACOs), intended to facilitate coordination and cooperation among providers to improve the quality of care for Medicare beneficiaries and reduce unnecessary costs. However, Dr. Wilensky was not confident that ACOs would make much of an impact. CMS proposed rules for the ACO program March 31, explaining that, "ACOs create incentives for health care providers to work together to treat an individual patient across care settings-including doctor's offices, hospitals, and long-term care facilities." Patient and provider participation in an ACO is voluntary, CMS stressed.

"I am somewhat skeptical about ACOs," Dr. Wilensky said to a smattering of applause among urologists. "We will see. Maybe they are a step that will move us in a better direction by providing financial incentives for physicians to band together to provide care. But it is hard to produce these kinds of results in more formalized groups where there is risk taking-and that is not the case with ACOs."

Earlier in the program, MedPAC Vice Chairman Robert Berenson, MD, said the ACO plan would work best with large practice groups that serve more than 5,000 beneficiaries.

"It's fee-for-service with a bonus," he said. "If actual spending comes in under the target, the organization shares in the savings with Medicare."