Healthcare policy experts from the Urban Institute and CareFirst BlueCross BlueShield debate its advantages and disadvantages.
This article first appeared September 27, 2017 on Medpage Today.
By Shannon Firth
WASHINGTON -- Does the Medicare Physician Fee Schedule have a role in the move towards value-based payment, and if so, how much time and resources should be devoted to fixing it? Policy scholars tackled this question at a USC-Brookings Schaeffer Initiative for Health Policy briefing on Tuesday.
"I think we need to be paying a lot of attention to the fee schedule, while we are also trying to support alternative payment models," said Robert Berenson, MD, an Institute fellow at the Urban Institute, which co-hosted the briefing. Berenson oversaw Medicare payment policy and private health plan contracting for the Centers for Medicare and Medicaid Services (CMS) from 1998 to 2000.
He now serves as a member of the Physician-focused Payment Technical Advisory Committee (P-TAC), which is tasked with evaluating proposals for new alternative payment models (APMs) and making recommendations to the secretary of the U.S. Department of Health and Humans Services (HHS). Berenson cautioned that he spoke for himself and not for PTAC at the briefing.
Borrowing a phrase from the play "The Doctor's Dilemma," by George Bernard Shaw, Berenson asked why "we should give a surgeon money for taking off your leg, and nothing for keeping it on?"
"Your rewarded for doing stuff, some of which is unnecessary, and not rewarded for not doing stuff," he said of the fee schedule.
While coding may have drawbacks, "not everything needs to be solved with a payment model," Berenson added. In his view, hybrid payment models that balance "the incentives for stinting with the incentives for overproducing" are the ideal goal.
As an example, Berenson cited the second track of the Comprehensive Primary Care (CPC) Plus model, which relies on the fee schedule, but also includes a per-member, per month care management fee.
Potential Fixes
One way the fee schedule could be modified is to reduce disparities in payments across specialties, Berenson noted. Rather than requiring Congress to legislate changes to the fee schedule, as is the current situation, the HHS Secretary should be given the authority to move money around.
For example, the Resource-based relative value scale (RBRVS) -- the system used to calculate payment rates for physicians -- could govern 95% of spending. But the remaining 5% could be within the the discretion of the secretary to achieve certain policy objectives, he told MedPage Today.
"We have no geriatricians for an aging population. Virtually none who are actually practicing ... And I think a fee schedule could be constructed to reward more generously the services that certain specialties perform," he said.
He underscored other implications of fixing the fee schedule for the APMs.
When some specialties earn two or three times what primary care doctors make in a fee-for-service system, there's less incentive for the specialists to join multispecialty practice groups, he said.
But it's these types of groups that are well-positioned to develop episode based-payment bundles, capitated payment, or other value-based models, he noted. As a result, fixing the fee schedule is critical to advancing APMs, Berenson suggested.
APM Challenges
Jonathan Blum, executive vice president of medical affairs at CareFirst BlueCross BlueShield (BCBS) and a former principal deputy administrator for CMS, agreed that improving the fee schedule is vital.
With the data he has access to in his current role, Blum said he's more skeptical than before about the future of APMs.
Data shows that Care First BCBS members travel to different hospital systems for different health needs, he explained. Neither the private payer world or the Medicare program are "comfortable" dictating where people receive care, Blum noted.
Yet, when the policy community talks about clinical bundles and capitated payments that lock people into a given delivery system, they ignore this fact, he stated
He also pointed out that the policy community may see a wide spectrum of costs and outcomes in a geographical area and think that they can be shifted. For example, the reasons why a patient may choose a skilled nursing facility over home healthcare care might have more to do with practical matters -- there's no one available to let the home heatlhcare worker in and out of the house -- than clinical ones. Patients don't always follow "rational care patterns," he said.
While capitated APMs are a "worthy goal," Blum said, "we have to find the resources, the staff, the money, the contract dollars to make sure that we're paying accurately, because I will predict ... the fee-for-service system, will still be in place 20 years from now, 30 years from now, unless we start being comfortable locking people into one system of care."
Focus on Outcomes
Gail Wilensky, PhD, an economist and senior fellow at Project Hope, said while she agrees that having a more accurate fee schedule is beneficial, she worries about "the bandwidth" and political capital at CMS, the Medicare Payment Advisory Commission (MedPAC), and P-TAC.
"For me, even an improved fee schedule [that] maintains its very micro-level focus is not going to help us move forward in terms of trying to improve quality and outcomes," she said.
Rather than improving the fee schedule, Wilensky said the focus of payment reform should be to streamline the number of outcomes measures to those that actually matter, so that they can be expanded to more payers.
The fee schedule was specifically designed so that payment would be the same regardless of who performs the services, she pointed out. Now that people are unhappy with the resulting income distributions, some want to see it changed.
But when quality and outcomes aren't important, and input costs are, "it's hard to imagine a more challenging way to go change income distributions then to have a micro-unit focused fee schedule," she said.