Will PCPs Get Higher Medicare Payment ― at Specialists' Expense?

Kerry Dooley Young

June 09, 2020

An advocate for boosting pay for primary care is waiting to see how much ground he and his allies will hold in a political battle for Medicare money ― and the accompanying professional respect.

Internist John Goodson, MD, of Harvard Medical School, says he counts Medicare's planned revamping of payments for office visits as a major victory. The Centers for Medicare & Medicaid Services (CMS) last year advanced a plan to increase reimbursement for office visits, which are billed as evaluation and management services (E/M).

Slated to take effect in 2021, this plan is meant to address what Goodson and other critics, including the Medicare Payment Advisory Commission (MedPAC), have described as a long-standing skew in Medicare payment that favors specialties centered on tests and procedures.

With Medicare long the dominant purchaser of healthcare in the United States, a skew in its payment policies is seen as contributing to a noticeable lag in compensation for primary care physicians. In the Medscape Physician Compensation Report 2020, physicians working in primary care reported average annual compensation of $243,000, while for specialists, the average annual compensation was $346,000. The lower compensation can affect career choices for young physicians, leading more of them to pursue specialties, MedPAC has repeatedly told Congress over many years.

Medicare's proposed overhaul of E/M codes is intended to compensate physicians for the coordination of care. The proposal is a response to years of physician criticism of CMS' approach to paying physicians. Congress' top advisers on healthcare ― MedPAC and the Government Accountability Office ― have warned lawmakers repeatedly over the years about a skew in favor of specialties that perform procedures.

Dividing the Healthcare Dollar

CMS last year described the 2021 E/M overhaul as a plan to compensate physicians who will repeatedly see patients, often to help them manage challenging conditions such as diabetes. In some cases, physicians manage patients who have several conditions. Under CMS' plan, specialties that do not generally bill office/outpatient E/M visits would face cuts.

But there would be a 12% payment boost for family practice as well as gains for other fields of medicine that focus on longer office visits with patients. There would be a 16% increase for endocrinology and a 15% increase for rheumatology.

However, the proposal also calls for cuts for many other specialties, including reductions of 10% for ophthalmology, 8% for physical therapy, and 7% for emergency medicine. (These figures are estimates and may not fully reflect the impact of other payment policies, CMS said in the 2020 physician fee schedule.) CMS has said federal fiscal rules force it to make cuts in other areas of Medicare spending to balance the planned increases in the E/M overhaul.

Not surprisingly, these slated cuts have triggered an organized backlash against the rule. Few would argue with a need to boost primary care payment, but the targeted specialties are trying to fend off the cuts. The American College of Physicians (ACP) is among more than 130 organizations that joined the American Medical Association in asking Congress to waive the so-called budget neutrality demand in connection with the E/M fix. This would allow the increases for primary care and related specialties without demanding cuts for other clinicians.

Many federal lawmakers have shown an interest in this issue. More than 90 members of the House sent CMS a letter on February 5 seeking details on how the agency made its decisions about which specialties to dock in order to pay for increases for other groups through the E/M codes. The House members responsible for the letter were led by Reps. Earl L. "Buddy" Carter, a Georgia Republican, and Lisa Blunt Rochester, a Democrat from Delaware.

It is likely that an accommodation will be made for the specialties slated for cuts, said Brian Fortune, a veteran healthcare policy consultant and president of the Farragut Square Group. It would be difficult to ask these groups to accept cuts starting in January, when many medical practices will still be coping with financial losses caused by missed patient visits and treatments as a result of the COVID-19 pandemic, he said.

Even amid the pandemic, CMS intends to meet its legal deadlines for producing the 2021 Medicare physician fee schedule, an agency spokeswoman told Medscape Medical News. The statutory deadline for the rule is November 1, and CMS intends to release its draft proposals in July. When it does, Goodson and others with a stake in the E/M debate will learn whether CMS will stick with its current plan or modify it.

In the view of many specialists, CMS' E/M proposal has spurred needless infighting among clinicians. Physicians should resist this bid by CMS to splinter the medical community, Neal Honickman, MD, an ophthalmologist from Florida, said.

"In essence, what they say is, 'There is a dollar, and it is going to be divided up among everybody, and you all can fight over that dollar,' " Honickman said. "We're allowing them to make us fight among ourselves and basically beat up on each other, saying, 'What I do is more important than what you do' and 'My time is more valuable than your time.' That's just not the way it should be."

Conflicting Interests Between Primary Care and Specialists

In 2011, physicians from Fincher's practice, including Paul Fischer, MD, filed a federal lawsuit seeking to prod CMS into addressing what they described as an overreliance on the RUC (RVS [Relative Value Scale] Update Committee) to the detriment of physicians working in primary care.

US federal judges ultimately ruled against Fischer and his colleagues. But their lawsuit helped draw attention to CMS' reliance on an AMA panel dominated by specialists in setting Medicare payments. In 2012, the Senate Finance Committee, which oversees Medicare, had a former top federal health official explain how this situation with the RUC had arisen. Congress in the early 1990s brought a new payment system to Medicare that was intended to peg reimbursement to time spent with patients and on tasks, said Thomas Scully, who led CMS from 2001 to 2004. (The agency's name was changed from the Health Care Finance Administration to CMS under his tenure.)

But CMS lacked the staffing to conduct the kind of analyses that the AMA panel did, allowing the RUC to gain great influence in payment decisions, Scully said. Then the specialties, which were well represented on the RUC, grew powerful. Bids to boost their Medicare reimbursement would have "to come from the hide of another procedure or specialty," Scully said. In these fights, primary care lost out to more powerful specialties.

"This outcome is not shocking, in fact it is understandable," Scully told the Senate Finance Committee at the 2012 hearing. "Doctors were stuck in a finite, budget neutral 'shark tank.' "

Since at least 2006, MedPAC has advised Congress and CMS to reconsider the influence of the RUC. Some of the criticism levied against the RUC centers on outdated depictions of how much time specialists need for procedures. With practice, specialists may become more adept at a procedure, yet the RUC would not always fully factor this productivity gain into pay calculations. Thus, there was a skew involving "mispriced" payments that are tilted toward excess compensation for procedures, MedPAC told Congress. This could tilt the future physician workforce toward the winners in the RUC's calculations and lead to shortages in those not as well favored, MedPAC has said repeatedly in the intervening years.

In response to this kind of criticism, AMA has posted online a summary of work the organization has done through the RUC to aid primary care. In its view, 2007 Medicare payment changes led to more than $4 billion in redistribution from surgery and other services to E/M, which is more the bailiwick of primary care. Medicare payment for a mid-level office visit increased from $31 in 1992 to $75 in 2019, while reimbursement for cataract surgery, for example, fell from $941 to $654, AMA said.

"The intense RUC review did lead to a divisive debate within medicine that, while difficult, was ultimately productive to primary care," the AMA said.

Adequately Compensating Coordination of Care

In primary care and fields such as rheumatology and endocrinology, clinicians often need to repeatedly spend time with patients to help them manage health crises and chronic conditions. Their expertise does not reduce time needed for care, said Harvard's Goodson.

Goodson has been a licensed physician in Massachusetts since 1978 and has been a leader in the field of primary care for decades. But he still needed to carefully listen, for example, to each of the more than 20 patients whose calls he fielded during a recent weekend regarding their concerns about possibly having COVID-19.

"These calls are very time consuming because there are always worries and fears and people talking in the background," Goodson told Medscape Medical News. "There's tons of misinformation. You are really trying to dampen the anxieties that are out there."

The COVID-19 pandemic has made clear the weaknesses in US medicine that result from stinting on pay for cognitive care, Goodson said. Many specialists dedicated to performing a narrow set of procedures have been largely sidelined during the crisis.

"We are understaffed to deal with this crisis," Goodson said. "We are now seeing the consequences of a dysfunctional system of physician payment."

People enrolled in Medicare have more difficulty finding new primary care physicians than they do specialists, MedPAC said in a March 2020 report on its telephone survey. MedPAC said 85% of this group reported having had no problem finding a specialist, whereas only 72% said the same about finding a new primary care doctor. MedPAC staff noted that this difference is reflected in past MedPAC surveys about access to care.

"We've evolved toward a workforce that is focused on procedures and interventions," Goodson said. "I would argue we need more balance overall."

Another vocal advocate for raising primary care pay, Jacqueline Fincher, MD, of Thomson, Georgia, offered a recent example to illustrate how a skew favoring procedures can shortchange patients. Fincher, who also is president of ACP, has been in practice in rural Georgia for more than 30 years.

"My patients and I have grown old together, so I know them," Fincher said. But she was not consulted when one of her long-time patients was transferred from a local hospital to a larger one in a neighboring city. The woman, who is in her 90s, had been in hospice care for 3 months because of congestive heart failure. She needed to be placed in a nursing home or an assisted living facility after her daughter could no longer properly care for her, Fincher said.

"Instead, she got tens of thousands of dollars of cardiac workup, with the final diagnoses of congestive heart failure and failure to thrive," Fincher said.

With Medicare as a driver, the healthcare system is geared toward paying for episodes of care and funneling patients to specialists, she said. It's not surprising that a cardiologist seeing an elderly patient will consider what heart tests or procedures may be needed, Fincher said.

"As my husband likes to say, 'You go to the Waffle House, you get waffles,' " Fincher said.

"More and more people are having trouble finding a primary care physician who can act as the quarterback of the team and coordinate specialists instead of passing the patient from specialist to specialist," Fincher said. "Nobody is looking at the whole patient."

Kerry Dooley Young is a freelance author based in Washington, DC.

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