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Congress asks AOA input on fix for broken Medicare physician pay system

June 6, 2013

Draft plans call for rewarding providers for high-quality, efficient care, repeal of SGR

Leaders of the two most powerful committees in the U.S. House of Representatives reached out to the AOA and other prominent organizations in early April to ask for further Medicare payment policy suggestions. They also wanted feedback on an initial plan to provide pay stability for providers by repealing and replacing Medicare’s flawed sustainable growth rate (SGR) payment system.

In the letter, the chairmen thanked the AOA and others for policy suggestions given in 2012 and indicated that the information was instrumental in formulating aspects of the new proposal.

Drafted by Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce Committee; Rep. Dave Camp (R-Mich.), chairman of the Ways and Means Committee; Rep. Joe Pitts (R-Penn.), chairman of the Energy and Commerce Committee’s Subcommittee on Health; and Rep. Kevin Brady (R-Texas), chairman of the Ways and Means Committee’s Subcommittee on Health, the April 3 letter asked for input on a legislative outline influenced by the AOA’s work with the committees in 2012.

The letter included the draft plan, which currently consists of three individual phases that would repeal the SGR and reward providers for high-quality and efficient care in the fee-for-service (FFS) program, while allowing providers to actively participate in payment and delivery reforms.

According to the lawmakers, Phase I would provide stable, predicable Medicare physician payment updates. Phase II would ensure a portion of payments are based on quality through an updated incentive program. And Phase III would reward providers for efficient resource use. Overall, the goals of the plan are to:

  • Repeal the SGR, eliminating the roughly 25 percent across-the-board cut slated for 2014 and any future SGR cuts;
  • Establish a period of stable payments, enabling providers to prepare for payment changes;
  • Engage the provider community in efforts to improve, reform, and update reimbursement systems;
  • Empower providers and other relevant stakeholders to determine the measures of quality and efficiency that are meaningful for Medicare beneficiaries;
  • Establish a more reasonable timeframe for developing measures that promote value;
  • Prompt the Centers for Medicare & Medicaid Services to provide timely feedback, enabling providers to make adjustments to improve patient care and optimize their incentive payments;
  • Provide options that enable providers to select the Medicare payment system – whether performance-based fee-for-service or an alternative model – that best fits their practice situation; and
  • Improve the provider practice environment by reducing practice costs and administrative burden – freeing up time to focus on patient care, not administrative paperwork.

After a follow-up request, the AOA responded by letter thanking the committees for ongoing efforts aimed at fixing the broken Medicare physician payment system while at the same time rewarding doctors of optometry and other health care professionals for providing high-quality and cost-efficient care.

The AOA also cautioned the lawmakers that the plan needed further refinement and reminded them that transforming FFS into a quality-enhancing payment mechanism must focus on increasing access to services that ultimately decrease the need for costly procedures in the future instead of limiting access to certain services based solely on old biases and misplaced motivations.

“While optometrists are primary care providers for essential vision and eye health services – services that often reduce the need for costly interventions – many new payment and delivery models now being developed either fully exclude or fail to value the key role that doctors of optometry play in reducing overall costs through improved access to preventive and primary care services as well as increased provider competition in the health care marketplace,” the AOA letter said.

“In practice, many secondary and tertiary providers rely on primary eye care management provided by optometrists, but top-down policies too often discourage these efficient approaches developed locally.”

The AOA urged the committees to remember that previous efforts to manage care and costs failed because utilization was restricted based on non-medical reasons.

“Optometrists, shown to improve efficiency and quality of health care delivery in other systems, are motivated to participate and improve the efficiency and quality of health care delivery for patients through innovative payment and delivery models,” the AOA letter continued. “We believe that we bring a unique perspective because optometrists are primary care providers for essential primary care vision and eye health services that reduce the need for preventable and costly interventions.”

The AOA anticipates that the U.S. House committees will continue working to develop a plan to repeal and replace the SGR and, at some point, may offer a legislative proposal.

AOA members may use the AOA’s Online Legislative Action Center (http://bit.ly/12M8XRK) to urge elected leaders to continue to work with the AOA to address both immediate and long-term threats to Medicare physician payments.

For more information, including how you can get more involved in federal advocacy through the AOA Federal Keyperson Program and AOA-PAC, contact the AOA Washington office team at 800-365-2219 or ImpactWashingtonDC@aoa.org.

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