WASHINGTON – The Medicare Payment Advisory Commission is calling for a one percent pay increase for physicians.
The recommendation, one of several made by MedPAC to Congress in its annual report, comes as Medicare physicians face a 25 percent pay cut on Jan. 1, 2012, if Congress does not pass legislation to change it.
MedPAC Chairman Glenn Hackbarth said the recommendations take into account payment adequacy for physicians in addition to providing high-quality care to beneficiaries.
Hackbarth said the commission recognizes that managing updates and relative payment rates will not solve the fundamental problem with current Medicare fee-for-service payment systems.
"Providers are paid more when they deliver more services without regard to the quality or value of those additional services," he said. The commission continues to support an overhaul of the FFS system that would pay for quality, not quantity, of service, he added, and it supports the use of medical home models, readmissions penalties and pilot testing of bundled payments to do so.
The American Medical Association and 130 other medical organizations have expressed frustration with the Medicare payment system.
"Last year, Congress was required to act five times to pass short-term measures to stop Medicare physician payment cuts scheduled for 2010," the groups said in a March 10 letter. "On three occasions, Congress failed to act before cuts were implemented, causing disruptions in processing Medicare payments. These payment uncertainties and delays created serious problems for many physician practices and jeopardized seniors' access to care."
At a March 15 Congressional hearing on the MedPAC recommendations, Wally Herger (R-Calif.), chairman of the House Ways and Means Subcommittee on Health, said, "I think I speak for all of us up here, Republicans and Democrats alike, that we are still looking for the silver bullet that will permanently reform the physician payment system in a fiscally responsible manner and look forward to working with MedPAC to find such a solution."
In its recommendations MedPAC backed the Medicare Advantage program, saying private plans that participate in the Medicare HMO program have "greater potential to innovate and to use care management techniques."
MedPAC also said Congress should create a quality incentive program for skilled nursing facilities. "These changes in the payment system would make payment more equitable among providers and improve beneficiary access and quality of care," Hackbarth said.
The recommendation that SNFs receive no payment increase drew harsh criticism from the industry.
"Stable Medicare funding is critical to extending this positive trend in improving quality, especially at a time when volatility in state Medicaid budgets has created a dramatic and worrisome squeeze on patient care, staffing and facilities themselves," said Mark Parkinson, president and CEO of the American Health Care Association.