Not Done Yet: 5 Healthcare Reforms Still to Come

Kenneth J. Terry, MA


March 22, 2012

In This Article

Reforms Will Affect Payment

Medicaid Rates

Under the ACA, primary care physicians are already receiving a Medicare bonus of 10% that will continue through 2015. In addition, their Medicaid payments will be raised to 100% of the Medicare fee schedule in 2013 and 2014. The affected specialties include family medicine, general internal medicine, and pediatrics.

Tuttle points out that primary care physicians who take Medicaid will see a sharp increase in reimbursement. In Michigan, he said, Medicaid rates will jump about 50% for primary care.

MGMA supports the Medicaid provision because it helps primary care doctors and doesn't lower reimbursement for other specialists. But MGMA government affairs representative Miranda Franco says that relatively few of her association's members accept Medicaid patients today.

That doesn't surprise La Penna, given the low Medicaid payment rates in most states. But he doesn't believe that the temporary bump in Medicaid payments to primary care physicians will induce many of them to open their doors to Medicaid patients. "Most of them would still prefer to focus on privately insured patients," he notes. And with 32 million newly insured patients seeking access to care in 2014, primary care practices need not accept any patients they don't want.

Independent Payment Advisory Board

The IPAB is charged with making recommendations for Medicare cuts when cost growth exceeds a target rate. Unless Congress devises and passes an alternative plan to cut costs by the same amount, or votes to waive the prohibition against amendments that don't lower costs as much, the Department of Health and Human Services must carry out the IPAB recommendations.

The first year in which the board could recommend provider payment cuts is 2014, but the Congressional Budget Office predicts that cost growth will not exceed the legislated target until 2018.

The IPAB, whose 15 members are to be appointed by the President, cannot submit proposals that would ration care, increase revenues, or change Medicare benefits or cost sharing with beneficiaries. Consequently, the IPAB has nowhere else to look to reduce costs but at provider payments. Because hospitals have been exempted from the board's purview until 2019, the initial burden of any IPAB-mandated cuts would fall mainly on physicians.

The AMA strongly supports the House bill to repeal the IPAB provision of the health reform law. In a recent letter to a House committee considering the measure, AMA Executive Vice President and CEO James Madara said that Medicare reimbursement decisions should be made by elected officials, not by an appointed board that has "far too little accountability."

Will It Create More Problems?

In the AMA's view, the IPAB would increase the problems that Medicare providers already face because of the Sustainable Growth Rate (SGR) formula, which threatened to cut Medicare payments by 27% this year until Congress overrode it.

MGMA also favors repealing the IPAB provision. Even though Congress could theoretically override IPAB recommendations, Franco notes, it would be very difficult for Congress to do so. She also doubts that the board would wait until 2018 to recommend fee cuts. Congressional Budget Office's budget projections, she points out, are a "constantly moving target" and one that assumes that the SGR cuts will be implemented.

Nevertheless, La Penna is skeptical that Congress -- which has consistently prevented the SGR reductions from taking place over the past decade -- will allow draconian IPAB recommendations to be carried out. "Congress will fix it just like they fix the Medicare adjustments every year," he says.


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