Thank you sponsors:
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Subcommittee
on Health House Ways and Means Committee Witnesses: Members Present: Democrats:
Republicans: Statements by Chair and Ranking Member Mr. Stark stated that he has no specific plan in mind for physician payment reform. He noted that people offer many different options for dealing with payment problems, but no one comes to him with a single plan or solution. He added that it is disingenuous for physicians to cry poverty because of SGR problems, observing that there is a difference between the price for a given procedure and gross income from a given volume of services during a period of time. He also stated that he does not believe that physicians will stop seeing Medicare patients. At the same time, he acknowledged that problems exist and major change is necessary, but Congress also has to think about taxpayers and the need to preserve Medicare.
Mr. Camp stated that the doctor-patient relationship is very important
in health care and Testimony Bruce Vladeck, former administrator of the Health Care Financing Administration (HCFA), now CMS, began his testimony by observing that Medicare’s physician payment system today fails to meet some of the most important goals behind its creation: i.e., shifting payments from specialists and interventional procedures to primary care services; providing greater control of program costs without impairing beneficiary access; and providing a more rational, scientificallybased method for establishing the relative prices of different services provided by physicians. He emphasized that since the 1990s primary care services have become undervalued as a result of the process by which the RBRVS is revised and updated, the operations of the SGR formula which rewards fast-growing services while discouraging those that grow more slowly, and changes in the physician market place. He added that the increasing migration of diagnostic and treatment technologies, including imaging, laboratory, and infusion services, to specialty physician offices makes available to them the technical component payment as a vehicle for increasing practice revenues as well as financing infrastructure investment, such as HIT. He also noted that low updates in the conversion factor because of the SGR formula, suppress payments for slower-growing services, such as Evaluation and Management, while maintaining incentives in increase the volume of services that are increasing more quickly, such as diagnostic radiology. Mr.
Vladeck made the following recommendations for short-term steps
to address some of these problems: In her testimony, Gail Wilensky, also a former HCFA administrator, stated that Congress needs to decide whether it wishes to continue with the disaggregated fee schedule payment system it uses for physician services or move in the direction of bundled payments for these services. She noted that Medicare uses bundled payments for many of the other services it covers, including inpatient care, skilled nursing facility care, home health care, hospital outpatient services, and dialysis services. She observed that potential volume increases in services that are paid as part of a bundle are less likely and less problematic than those associated with unbundled services. With regard to the disaggregated and discrete fee schedule Medicare uses for paying physicians, she noted that, paying for individual services, together with the SGR, provide individual physicians with incentives to increase the volume and intensity of services they provide because physicians know that nothing they do as individuals can affect overall physician spending. Ms.
Wilensky recommended the following shortterm patches:
Longer
term steps Congress could take include the following:
Nancy Nielsen, speaking on behalf of the
AMA, urged the following actions: Donald Crane of the California Association of Physician Groups (CAPG) testified that his organization straddles both capitation and fee-for-service (FFS) payment systems. He stated that CAPG finds that the capitated payment model, as compared to fee-for-service incents frugality, prevention, coordination, the development of systems of care, and capital for infrastructure (HIT). In contrast, FFS, incents episodic, acute care, and emphasizes volume over efficiency and overuse over prevention. Questions for Witnesses Major areas of questioning by Committee Members included the following: What should be done about the huge regional variation in the volume of services provided to beneficiaries (Stark)? Dr. Nielsen responded that data show that the variation is not about patient mix. She noted that the physician community is actively involved in the development of quality reporting measures that will help with this problem. She added that comparative effectiveness research is needed. Where has the original RBRVS gone wrong in rewarding primary care (Stark). Ms. Wilensky stated that the fee schedule fails to recognize the complexity of evaluation and management services. She added that the medical home needs to be recognized in the payment system as a way to coordinate care in FFS. Mr. Vladeck stated that E and M has become undervalued for a variety of reasons, as he explained in his testimony, and the weights for the codes for these services need to be increased. Will bundled payments extend the solvency of the Medicare program and will they save the program money (Camp). Ms. Wilensky stated that if the experience with DRGs and other bundled reimbursement methodologies is any indication, using this approach will reduce the rate of growth in physician services. Mr. Crane observed that the ultimate in bundled payments is the capitated payment system of Medicare Advantage and that program should be expanded. What lessons can be learned from foreign countries’ experience with physician payments (Doggett). Mr. Vladeck noted that most other countries have a better balance between primary and preventive care, on the one hand, and specialty care, on the other. He added that when you have explicit practice guidelines, primary care practitioners provide more prevention services than other physicians. He also argued that FFS physicians can have a bigger impact on prevention services’ health outcomes than plans because persons often change plans before the benefits of prevention will be seen. Should quality be the primary determinant of reimbursement (Ramstad)? Mr. Vladeck responded that it is important that the payment system reward quality, adding, however, that it is possible to achieve major improvements in quality through other means, such as increasing information available to physicians and patients, increasing transparency of information, etc. How soon can we get to a quality performance-based reimbursement system (Kind). Mr. Vladeck responded that we need to know a lot more about what defines quality care. He added that we also need to deal with risk adjustment at the individual and community level, since many persons are now underserved. Ms. Wilensky stated that we need a more accountable system that comes from multispecialty groups. Dr. Nielsen observed that you can save a lot of money by withholding services, but you need to focus on steps that will increase quality. One such step would be to increase the use of HIT, which will allow small practices especially to do care coordination better. How does Congress encourage primary care providers to practice in areas, especially urban areas, where services are inadequate (Becerra). Mr. Vladeck suggested that Medicare enhance polices to provide extra payments to providers practicing in areas with discrete boundaries. Ms. Wilensky suggested selected loan forgiveness. She also recommended that federally qualified community health centers be allowed to become Medicare Advantage plans.
Improving Health Care Quality:
An Integral Step Toward Health Reform
Witnesses:
Members Present: Statements by Chair and Ranking Member: Sen. Baucus observed that the nation’s health care system does a poor job in encouraging and rewarding the provision of quality health care services. He stated that it needs to encourage better outcomes, and in so doing, should help rein in growth in health care spending. Sen. Grassley stated that not all providers are at the high level of providing quality care and noted wide geographic variations in quality. He observed that performance measurement is a fundamental building block to improving care and that we need a system for relating payment to performance. He referred to the incentives Medicare has begun to offer for quality care and said that private insurers need to change their incentives too. He added that currently the nation’s health care system encourages the provision of higher volume of services rather than quality care and that value-based purchasing should be adopted broadly in order to encourage quality. Testimony Peter
Lee of the Pacific Group made a number of recommendations
for creating a transparent health care system that will foster accountability,
incentives for improvement, and tools for consumers and providers:
Samuel
Nussbaum of WellPoint described his plan’s five-part
strategy to advance and improve quality. This strategy focuses on:
He
recommended that Congress embrace the following strategies: Greg Schoen of the Fairview Northland Medical Center, a rural 54-bed regional hospital and clinic in Minnesota, described his hospital’s journey to becoming a topperforming hospital as the result of its participation in a CMS demonstration to encourage improvements in hospital quality. He observed that aligning financial incentives is the right approach to pushing quality to a higher level, and by creating a positive incentive to improve quality, pay-for-performance is an engine for improvement and can be a framework for fundamental transformation. He cautioned, however, that separate pay-for-performance initiatives in the private payer market add considerable costs for hospitals and recommended that measures should be standardized so that CMS and other payers have the same ones. In addition, measure development organizations should assure alignment between physician and hospital measures, and that all new measures be tested and publicly reported before being used in a pay-for-performance program. Finally, he observed that collaboration and the sharing of ways to implement best medical practices, rather than penalties, should be the key to quality success. Kevin
Weiss of the American Board of Medical Specialties
(ABMS) stated that:
William Roper, speaking on behalf of the
National Quality Forum (NQF), which he chairs, stated that drivers
of quality improvement include: Questions for Witnesses Questions centered on a few themes: What more should Congress be doing to get more alignment in quality initiatives in the public and private sectors (Baucus, Bunning)? Dr. Roper responded that national priorities and goals are needed and that payments from all payers must be at risk to motivate practitioners to respond and act on priorities. He also stated that HHS must push for the development of an electronic health care system, and recommended that if providers can not adopt, then they should not be allowed to participate in Medicare. He also recommended that Congress must provide adequate funding for AHQR. Peter Lee stated that Congress should relate reimbursement from public programs to quality performance measurement. He added that Congress should rebalance the payment system to reward primary care services through the medical home and care coordination. Rather than penalties, Dr. Nussbaum argued that the Congress should fund start-up costs for helping providers through substandard performance. Dr. Weiss stated that JCAHO, NCQA, and the Boards must align their standards for care. He added that a single set of quality measures must be acceptable across CMS, private plans, and the Boards. Does CMS have to take the lead in changing incentives to provide quality care or can this be left to private sector (Grassley, Bunning)? Dr. Weiss stated that a partnership is necessary but that Medicare must take the lead in working with the private sector to establish a single set of quality measures. Dr. Roper added that he also believes that a single national strategy is necessary for improving quality. Are economic incentives necessary to improve quality (Grassley, Bunning)? Dr. Roper insisted that financial incentives are necessary, together with real time information about performance. He added that bundled payments for integrated care will transform the way care is delivered. How do we take into account patient noncompliance with best practices as well as the impact of multiple chronic conditions on the provision of care that is understood to represent quality best practice (Lincoln)? Dr. Roper suggested that measures must be appropriately adjusted for co-morbidities and severity of illness. He added that care must also be coordinated for such patients. Dr. Nussbaum stated that surgical outcomes data is a good place to begin to examine the validity of quality measures. What needs to be done to get information to patients to drive the quality agenda on abuse in discretionary surgery (Wyden)? Dr. Roper stated that educational tools are needed to help patients to think about their options for care. Dr. Weiss added that public reporting of information about providers is needed. How should standardized best practices be translated into actual practice of medicine and can we set standards for best practices on a uniform basis (Snowe)? Dr. Roper responded that a single set of quality standards are necessary. He reiterated that financial incentives are needed and that practitioners must be at financial risk for providing quality of care. Dr. Weiss agreed that economic incentives are necessary but added that professional skills must be proved too. How should the health care system standardize the provision of preventive services as well as quality end-of-life care (Salazar)? Dr. Nussbaum stated that plans must first provide coverage of preventive services and noted that NQF will be issuing a report on prevention and end-of-life care. He noted that physicians do not own prevention and that patients need to be involved as well. What are other countries doing in the area of quality (Lincoln)? The panel pointed to experience of England and European countries, which use outcomes measures for care, have comparative effectiveness agencies, and have stronger primary care systems, including payment incentives for the medical home. Are small hospitals at a disadvantage in improving quality of care (Baucus, Grassley, Lincoln)? Dr. Schoen responded that resolve and commitment were necessary in his hospital to move forward with quality improvements. However, reimbursement incentives through the CMS demo reinforced the decision to improve quality. He added that a key feature of the demonstration was sharing of information about best practices from those hospitals that performed well with other hospitals that were not at a minimum threshold of performance, rather than use of penalties to improve their quality. |
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