DCMedical News: Wednesday, June 22, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
Wednesday, June 22, 2022
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
Reprise of the Sustainable Growth Rate (SGR) Controversy
The SGR, a creature of the 1997 Balanced Budget Act, was promoted as a Medicare physician fee schedule methodology which would help make the Medicare program financially “sustainable.” Every year that SGR limits on physician fees were to be implemented—when Medicare patient service volume increased, fees were supposed to be limited or reduced—the limits were aborted at the last minute (save only in 2002).
The SGR was replaced by the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015, in a rushed and last minute Sunday Rose Garden signing ceremony, one day before the Monday on which Medicare rates, now reflecting the cumulative mathematical burden of reductions that “should” have taken place 1997-2015, were set to plunge more than 30%. Such a decline was broadly predicted at the time to bring about the wholesale exit of physicians from the Medicare program, at least those whose specialties (no for many cardiologists, probably yes for most orthopedic surgeons) would allow them to survive financially without Medicare patients.
Now the Medicare trustees in their annual report (here) find that, once again, physician fee schedules have become untenable. Becker’s reports that “The report said the Medicare Access and CHIP Reauthorization Act, a payment system for Medicare physician fees that replaced the sustainable growth rate formula in 2016, raises important long-range concerns that will almost certainly need to be addressed by future legislation.”
Says Becker’s, “Most physicians will face Medicare pay cuts starting in 2025 due to the expiration of the $500 million exceptional performance bonus in the Merit-based Incentive Payment System [MIPS] and 5 percent incentive payment for qualifying Alternative Payment Model participants . . . By 2048, the trustees estimate, physician payment rates under MACRA will be lower than they would have been under the sustainable growth formula — about 30 percent lower by end of the period projected . . . [and] the trustees expect compensation to Medicare-participating physicians to become a significant issue in the long-term."
Texas Provides an Early Window on Surprise Bill Arbitration: Median In-Network Prices Prevail
Texas has had a “surprise bill” prohibition for 30 months, similar to the federal statute which became effective January 2022. A research letter in JAMA (here) reports on the Texas experience.
“Texas prohibited surprise bills for out-of network emergency services and nonemergency ancillary services at in-network facilities among fully insured health plan enrollees, effective January 1, 2020. Under this law, patients pay in-network cost sharing and health plans and out-of-network clinicians or emergency facilities resolve payment disagreements through an independent dispute resolution (IDR) process.”
“The Texas IDR process begins with a teleconference to attempt settlement. If unsuccessful, the case escalates to arbitration. Each party offers a final payment amount. The arbiter must select one of these offers after considering 10 factors, including the 80th percentile of charges and the median of insurers’ in network payments for the same service(s) in the geographic area.”
The 47,280 observations from 32,294 unique IDR cases involving clinicians were predominantly emergency medicine (80%) and anesthesia (12%). “The mean IDR allowed amount outcome aligned closely with the FAIR Health median in-network allowed amount benchmark. Overall, 74% of disputed services were settled through teleconference; mean charges, initial allowed amounts, arbitration benchmarks, and IDR outcomes were relatively similar across settled and arbitrated cases.”
“The median final allowed amounts from Texas’ IDR process were modestly higher than the FAIR Health median in-network allowed amount benchmark but were well below the benchmark of the 80th percentile of charges. Final allowed amounts resulting from IDR in Texas were lower than in New York and New Jersey, where arbiters are not shown median in-network prices, and previous research found that mean awards reflected the 80th percentile of charges benchmark.”
In the federal No Surprises Act “Initial regulatory guidance instructs arbiters to anchor decisions to median in-network prices, although ongoing lawsuits filed by hospital and physician groups seek to block its implementation. Texas IDR outcomes suggest that arbiters may anchor to a median in-network price benchmark, even if they are not instructed on how to weigh various factors.” (Italics added.)
Urologist Practices Acquired by Private Equity Firms: the Chosen and the Wealthier
Researchers publishing in Urology (here) examined the characteristics of urology practices acquired by private equity firms, and those that were not. In sum, higher paid and busier urologists were acquired, and they became even higher paid and even busier after acquisition.
“We identified private equity acquisitions of ten independent urology practices across six states during the study period. In the pre-acquisition period, urologists later joining private-equity groups received greater mean inflation-adjusted Medicare payments ($246,977 vs. $160,038) and had greater patient volume (839.7 vs. 674.2 patients) than urologists who did not. In the post-acquisition period, private equity affiliated urologists had an 11.0% increase in inflation-adjusted Medicare payments and a 12.5% increase in patient volume. Non-private equity affiliated urologists exhibited a 6.0% decline in Medicare payments and a 2.7% increase in patient volume.”
This is How it Starts, With a “Reimbursement Framework” Set in Advance of Technology Evaluation
The story of premature adoption and commercialization of information technology in health services may be repeated in the promotion of “artificial” intelligence. A report in Health IT Analytics (here) describes “a potential ‘reimbursement framework’ for the adoption of healthcare artificial intelligence (AI), which researchers argue will ensure that healthcare organizations are incentivized financially at a sustainable level to support quality of care, healthcare equity, and mitigation of potential biases.”
“AI designed and deployed to promote safety and efficacy in healthcare is poised to address increases in costs, lack of access to care, and advance health equity,” but, regrettably, “When choosing whether to adopt and deploy an AI tool, healthcare providers are greatly influenced by financial incentives for services that the AI would assist with . . . In particular, reimbursement and insurance coverage are critical determinants of AI adoption.”
HOSPITALS, NURSING HOMES AND OTHER HEALTH CARE FACILITIES
COVID Pandemic Health System Financial Incentives
A study in Health Policy (here) examines financial support for health systems in 20 countries during the peak of the COVID-19 pandemic. “Provider payment mechanisms were adjusted in many countries in response to the COVID-19 pandemic in 2020 . . . [including] payment adjustments compensating income loss and those covering extra costs related to COVID-19 . . . We found that income loss was not a problem in countries where professionals were paid by salary or capitation and hospitals received global budgets. In countries where payment was based on activity, income loss was compensated through budgets and higher fees. New FFS payments were introduced to incentivize remote services.” The authors noted the existence of “economic incentives created by these adjustments such as cost-containment or increasing the number of patients or services, that can result in unintended consequences such as risk selection or overprovision of care.”
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here.
Monkeypox resources, CDC (here), JAMA Patient Page (here).
2022 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
June 23, 24
July 12, 13, 14, 15, 18, 19, 20, 21, 26, 27, 28, 29
August, Congress adjourned, no editions of DCMN
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org