Linking Compensation to Quality — Medicare Payments to Physicians
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《新英格兰医药杂志》
Sometime after Congress reconvenes in September, it will consider legislation to eliminate a scheduled reduction of 4.3 percent in Medicare fee-for-service payments to physicians — but there is a trade-off. The reversal will be combined with policies linking payments to new efforts to improve the quality of care. As Representative Bill Thomas, a California Republican who chairs the House Ways and Means Committee, wrote recently to Medicare's administrator, "We believe that the time is ripe to tie physician payments to quality performance — a position that we know you share."
Thomas is among three Republicans who chair committees with jurisdiction over Medicare; the others are Representative Joe Barton (of Texas) of the House Energy and Commerce Committee and Senator Charles Grassley (of Iowa) of the Senate Finance Committee. All three favor linking a portion of Medicare's payments to physicians (1.5 to 3.0 percent) to clinically valid measures of quality of care — for example, assessments of the treatment of chronic diseases such as asthma and congestive heart failure or the appropriate provision of preventive care. The challenge will be gaining agreement within the medical profession on the specific quality measures to be used and eliminating the scheduled reduction in payments to physicians without adding unduly to the program's rapid growth in spending.
Already, Medicare pays hospitals at a rate that is 0.4 percent higher than the standard rate if they report data on 10 measures of quality, such as whether they provide aspirin and beta-blockers on admission and at discharge to patients who have a heart attack or heart failure. Many of the largest private health insurers also have begun to link a portion of their payments to physicians to quality indicators.1 The most aggressive programs are incorporating measures that will lead to redesigned systems, such as the use of disease registries and investments in information technology.1 In general, these activities are described as "pay for performance" initiatives.
For 25 years, Medicare paid for physicians' services according to each doctor's actual or customary fee for a service or the prevailing fee in his or her geographic area.2 During this period, Medicare payments to physicians grew at an average annual rate of more than 14 percent. In a sharp break with this payment approach, the Omnibus Budget Reconciliation Act of 1989 called for the creation of a fee schedule that based payments for physicians' services on the resources required to provide them. As a part of this law, Congress enacted spending targets designed to control the overall growth of expenditures. In its current form, as modified by the Balanced Budget Act of 1997, the formula that dictates a reduction in payments to physicians in 2006 (and each year through 2012) is known as the sustainable growth rate (SGR). This formula sets a target for growth in Medicare expenditures for physicians' services largely on the basis of the growth of the national economy.
From 1999 — the first year the SGR system was used to update Medicare's physician fees — through 2001, annual fee increases ranged from 2.3 percent to 5.5 percent (see graph).3 But when the economy slowed in 2002 as the volume of services provided by physicians increased, the combination led to a payment reduction of 4.8 percent. Since then, Congress has come to the rescue of physicians each year by authorizing temporary fixes that reversed scheduled payment reductions and increased payments by 1.7 percent in 2003 and 1.5 percent each in 2004 and 2005 but left the SGR formula largely unchanged. As a consequence, a payment reduction of 4.3 percent is scheduled to take effect on January 1, 2006, unless Congress acts once again to eliminate it.
Changes in Medicare Payments to Physicians.
The changes reflect the growth in the Medicare Economic Index, the performance adjustment, and legislation that affects the physician fee-schedule update. For 2004 and 2005, the Medicare Modernization Act established a minimum increase of 1.5 percent. Data for 2006 through 2012 are projections based on the current sustainable-growth-rate formula.
Proposals for repeal of the method by which Medicare updates the payments of physicians have come from legislators, the Medicare Payment Advisory Commission, and organized medicine. In testimony presented before the House Ways and Means Subcommittee on Health on July 21, 2005, Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), conceded that Medicare's "current system of paying physicians is simply not sustainable," but he added that "neither is simply adding larger updates to the current payment system. The current system has resulted in large increases in volume and intensity of services."
In 2004, Medicare expenditures for physicians' services rose 13 percent. But most proposals to change the SGR formula would cost Medicare billions more than current budget projections, which include the payment reductions that would start in January 2006. For example, Nancy Johnson (R-Conn.), who heads the House Ways and Means Subcommittee on Health, has introduced legislation that is supported by the American Medical Association (AMA) and recommends that payment updates be based on increases in the practice expenses of physicians, as measured by the Medicare Economic Index. Such an approach, the CMS has estimated, would yield increases in payments to physicians of 2 to 3 percent per year for each of the next 10 years, at a total cost of $183 billion more than if the scheduled payment reductions had occurred.
Ways and Means Chairman Thomas, Representative Johnson, and the AMA all favor the removal of prescription drugs from the services included in the SGR, a change that Medicare actuaries estimate would cost at least $36 billion over 10 years. In a letter dated July 25, 2005, 89 senators asked Joshua Bolten, director of the president's Office of Management and Budget, to use his administrative authority to remove prescription drugs from the SGR formula. The letter said, in part, "One of the most serious flaws is the inclusion of Part B drugs in the sustainable growth rate formula, because the rate of growth in the cost of Part B drugs is beyond the control of physicians." The administration is unlikely to introduce its own proposal for fixing the SGR formula, but the CMS is working with the committees of jurisdiction to identify a remedy, recognizing that Congress will not accept the annual Medicare reductions in payments to physicians that loom from 2006 to 2012.
Although no solution has yet been found, a bipartisan consensus is gathering that any change in the SGR formula must be combined with new requirements designed to enhance the quality of care provided by physicians. Adding to this momentum, McClellan emphasized in a briefing on July 25, is a strong commitment by many medical organizations to collaborate with this effort, including "a full-blown" proposal put forward by the American College of Physicians.4 In testimony, McClellan said: "Medicare's current physician payment system pays all physicians equally for a service regardless of its quality, its impact on patients' health, or the efficiency with which services are furnished. Consequently, the current system does not provide more resources to physicians when they improve the quality of care or for preventing acute health problems. . . . Linking a portion of Medicare payments to valid measures of quality and effective use of resources would give physicians more direct incentives to implement the innovative ideas and approaches that actually result in improvements in the value of care that people with Medicare receive."
At the hearing, McClellan outlined a series of activities in which the CMS is engaged to identify quality indicators that could be linked to Medicare's payments to physicians. Among them is the development of measures of the quality of ambulatory care through collaboration with the AMA and demonstration projects of the National Committee for Quality Assurance and CMS that are designed to test pay-for-performance approaches both in large, multispecialty physician groups and in smaller practices. McClellan also said that the CMS planned to begin using Medicare claims data to measure the resources used by physicians, as recommended by the Medicare Payment Advisory Commission, and "to share these results with physicians confidentially to educate them about how they compare" with their peers. On July 25, the CMS released its "quality improvement roadmap," which it characterized as "a major, agency-wide effort to . . . achieve major improvements in the quality of health care."5
Representative Johnson, who chaired the hearing July 21, emphasized that simply linking Medicare's method of payment with measures designed to improve quality would not protect physicians against impending reductions in the annual payment update, unless the SGR formula is changed. The administration recognizes this problem, but it is determined to avoid jeopardizing the implementation of Medicare's controversial new prescription-drug benefit, which takes effect on January 1, 2006, when Congress opens up the program to amendment in order to fix the SGR formula. The Senate Finance Committee, which holds jurisdiction over Medicare in that chamber, also is adamant that the SGR formula be changed this year. The outcome of this struggle over paying physicians is unlikely to emerge before late 2005, when the really hard bargaining will take place among Congress, the administration, and an array of private interests over competing claims on limited federal resources. Given the large federal budget deficit, winning this struggle for physicians will be even more challenging this year, but the search for compromise is under way.(John K. Iglehart)
Thomas is among three Republicans who chair committees with jurisdiction over Medicare; the others are Representative Joe Barton (of Texas) of the House Energy and Commerce Committee and Senator Charles Grassley (of Iowa) of the Senate Finance Committee. All three favor linking a portion of Medicare's payments to physicians (1.5 to 3.0 percent) to clinically valid measures of quality of care — for example, assessments of the treatment of chronic diseases such as asthma and congestive heart failure or the appropriate provision of preventive care. The challenge will be gaining agreement within the medical profession on the specific quality measures to be used and eliminating the scheduled reduction in payments to physicians without adding unduly to the program's rapid growth in spending.
Already, Medicare pays hospitals at a rate that is 0.4 percent higher than the standard rate if they report data on 10 measures of quality, such as whether they provide aspirin and beta-blockers on admission and at discharge to patients who have a heart attack or heart failure. Many of the largest private health insurers also have begun to link a portion of their payments to physicians to quality indicators.1 The most aggressive programs are incorporating measures that will lead to redesigned systems, such as the use of disease registries and investments in information technology.1 In general, these activities are described as "pay for performance" initiatives.
For 25 years, Medicare paid for physicians' services according to each doctor's actual or customary fee for a service or the prevailing fee in his or her geographic area.2 During this period, Medicare payments to physicians grew at an average annual rate of more than 14 percent. In a sharp break with this payment approach, the Omnibus Budget Reconciliation Act of 1989 called for the creation of a fee schedule that based payments for physicians' services on the resources required to provide them. As a part of this law, Congress enacted spending targets designed to control the overall growth of expenditures. In its current form, as modified by the Balanced Budget Act of 1997, the formula that dictates a reduction in payments to physicians in 2006 (and each year through 2012) is known as the sustainable growth rate (SGR). This formula sets a target for growth in Medicare expenditures for physicians' services largely on the basis of the growth of the national economy.
From 1999 — the first year the SGR system was used to update Medicare's physician fees — through 2001, annual fee increases ranged from 2.3 percent to 5.5 percent (see graph).3 But when the economy slowed in 2002 as the volume of services provided by physicians increased, the combination led to a payment reduction of 4.8 percent. Since then, Congress has come to the rescue of physicians each year by authorizing temporary fixes that reversed scheduled payment reductions and increased payments by 1.7 percent in 2003 and 1.5 percent each in 2004 and 2005 but left the SGR formula largely unchanged. As a consequence, a payment reduction of 4.3 percent is scheduled to take effect on January 1, 2006, unless Congress acts once again to eliminate it.
Changes in Medicare Payments to Physicians.
The changes reflect the growth in the Medicare Economic Index, the performance adjustment, and legislation that affects the physician fee-schedule update. For 2004 and 2005, the Medicare Modernization Act established a minimum increase of 1.5 percent. Data for 2006 through 2012 are projections based on the current sustainable-growth-rate formula.
Proposals for repeal of the method by which Medicare updates the payments of physicians have come from legislators, the Medicare Payment Advisory Commission, and organized medicine. In testimony presented before the House Ways and Means Subcommittee on Health on July 21, 2005, Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), conceded that Medicare's "current system of paying physicians is simply not sustainable," but he added that "neither is simply adding larger updates to the current payment system. The current system has resulted in large increases in volume and intensity of services."
In 2004, Medicare expenditures for physicians' services rose 13 percent. But most proposals to change the SGR formula would cost Medicare billions more than current budget projections, which include the payment reductions that would start in January 2006. For example, Nancy Johnson (R-Conn.), who heads the House Ways and Means Subcommittee on Health, has introduced legislation that is supported by the American Medical Association (AMA) and recommends that payment updates be based on increases in the practice expenses of physicians, as measured by the Medicare Economic Index. Such an approach, the CMS has estimated, would yield increases in payments to physicians of 2 to 3 percent per year for each of the next 10 years, at a total cost of $183 billion more than if the scheduled payment reductions had occurred.
Ways and Means Chairman Thomas, Representative Johnson, and the AMA all favor the removal of prescription drugs from the services included in the SGR, a change that Medicare actuaries estimate would cost at least $36 billion over 10 years. In a letter dated July 25, 2005, 89 senators asked Joshua Bolten, director of the president's Office of Management and Budget, to use his administrative authority to remove prescription drugs from the SGR formula. The letter said, in part, "One of the most serious flaws is the inclusion of Part B drugs in the sustainable growth rate formula, because the rate of growth in the cost of Part B drugs is beyond the control of physicians." The administration is unlikely to introduce its own proposal for fixing the SGR formula, but the CMS is working with the committees of jurisdiction to identify a remedy, recognizing that Congress will not accept the annual Medicare reductions in payments to physicians that loom from 2006 to 2012.
Although no solution has yet been found, a bipartisan consensus is gathering that any change in the SGR formula must be combined with new requirements designed to enhance the quality of care provided by physicians. Adding to this momentum, McClellan emphasized in a briefing on July 25, is a strong commitment by many medical organizations to collaborate with this effort, including "a full-blown" proposal put forward by the American College of Physicians.4 In testimony, McClellan said: "Medicare's current physician payment system pays all physicians equally for a service regardless of its quality, its impact on patients' health, or the efficiency with which services are furnished. Consequently, the current system does not provide more resources to physicians when they improve the quality of care or for preventing acute health problems. . . . Linking a portion of Medicare payments to valid measures of quality and effective use of resources would give physicians more direct incentives to implement the innovative ideas and approaches that actually result in improvements in the value of care that people with Medicare receive."
At the hearing, McClellan outlined a series of activities in which the CMS is engaged to identify quality indicators that could be linked to Medicare's payments to physicians. Among them is the development of measures of the quality of ambulatory care through collaboration with the AMA and demonstration projects of the National Committee for Quality Assurance and CMS that are designed to test pay-for-performance approaches both in large, multispecialty physician groups and in smaller practices. McClellan also said that the CMS planned to begin using Medicare claims data to measure the resources used by physicians, as recommended by the Medicare Payment Advisory Commission, and "to share these results with physicians confidentially to educate them about how they compare" with their peers. On July 25, the CMS released its "quality improvement roadmap," which it characterized as "a major, agency-wide effort to . . . achieve major improvements in the quality of health care."5
Representative Johnson, who chaired the hearing July 21, emphasized that simply linking Medicare's method of payment with measures designed to improve quality would not protect physicians against impending reductions in the annual payment update, unless the SGR formula is changed. The administration recognizes this problem, but it is determined to avoid jeopardizing the implementation of Medicare's controversial new prescription-drug benefit, which takes effect on January 1, 2006, when Congress opens up the program to amendment in order to fix the SGR formula. The Senate Finance Committee, which holds jurisdiction over Medicare in that chamber, also is adamant that the SGR formula be changed this year. The outcome of this struggle over paying physicians is unlikely to emerge before late 2005, when the really hard bargaining will take place among Congress, the administration, and an array of private interests over competing claims on limited federal resources. Given the large federal budget deficit, winning this struggle for physicians will be even more challenging this year, but the search for compromise is under way.(John K. Iglehart)