A proposal to sharply reduce physician pay to eliminate one of the country's big financial problems is drawing harsh criticism from leaders of the medical community.
“It's surprisingly unsophisticated for MedPAC to come up with a proposal such as this,” said Academy President Bruce Sigsbee, MD, referring to the recommendation made by the Medicare Payment Advisory Commission, which advises Congress on health care payment issues.
On Oct. 6, the Commission voted 15-2 in favor of a proposal to reduce Medicare fees for neurologists and other specialists by 5.9 percent for each of three years, followed by a seven-year freeze. Primary care physicians would see a pay freeze for the entire 10-year period but no outright cuts.
The proposal would save about $200 billion over 10 years, which would offset the cost of eliminating the much-maligned sustainable growth rate (SGR) formula that theoretically determines physician fees.
According to the SGR, physicians should have had many fee cuts over the last several years. Yielding to pressure from physicians, Congress has waived all such reductions for the last decade.
The result is a cumulative financial problem that can be fixed in two ways: Cutting physician fees by 29.5 percent on Jan. 1, as per the SGR formula, or eliminating the SGR and finding a way to pay for it.
Because there have been so many last-minute reprieves from the supposedly automatic fee cuts related to the SGR, most observers think the slated 29.5 percent fee cut is unthinkable. And MedPAC's proposed alternative — three consecutive pay cuts for specialists followed by a long pay freeze — is no more fathomable.
“I'm concerned that at the end of this year, Congress will not be able to fix the SGR formula, and that the (29.5 percent) cut could go through,” Dr. Sigsbee said. “Or, in desperation to find some way to save money, they may pick up on this proposal from MedPAC as a way to do that, recognizing that it isn't a great idea, but it's some idea.”
SPECIALISTS VS. PROCEDURALISTS
The word “desperation” harkens back to last summer's contentious debate over the nation's deficit, which nearly resulted in a default on U.S. debt obligations. The deal that avoided default created a joint committee charged with finding ways to reduce the deficit by $1.2 trillion by Nov. 23.
Recognizing the power of the Joint Select Committee on Deficit Reduction, the Academy sent a letter to its co-chairs asking them to replace the SGR — but not in the way MedPAC recommends.
The letter makes the case that all specialists should not be lumped together in physician payment policy decisions. While the gap in median income between primary care physicians and specialists gets a lot of attention, analysis of Medicare data shows that the disparity is between physicians who do procedures and those who do not.
Nonprocedural specialties like neurology primarily use evaluation and management codes and experience the same economic disadvantages compared to proceduralists that primary care physicians do, the letter said.
“The cut suggested (by MedPAC) would fall on cognitive care providers simply because of their specialty designation rather than the services they provide and would result in serious ramifications to patients who are often the highest cost, highest need Medicare beneficiaries,” the letter said.
It goes on to point out that MedPAC itself earlier this year recognized the need to change the way cognitive specialists are paid. In its June 2011 report to Congress, “Medicare and the Health Care Delivery System,” MedPAC identified the need to “realign payments for physicians …to help ensure an adequate supply of practitioners in cognitive (nonprocedural) specialties who focus on managing patients with chronic conditions.”
WHAT IT MEANS TO NEUROLOGISTS
Because of that wording, Elaine C. Jones, MD, chair of the Academy's Government Relations Committee, was shocked that MedPAC wants to cut the fees for neurologists and other cognitive specialists at the same rate as for orthopedic surgeons and radiologists.
“The recommendation that they are making is devastating for neurology,” said Dr. Jones, who has a practice in Bristol, RI. “It would be horrible for our field.”
For one thing, the relatively lower pay that neurologists receive makes the specialty less attractive for medical students who graduate with heavy college debt. For another, it makes neurologists less able to survive a big pay cut.
“We already struggle with lower reimbursement rates than a lot of other groups, and we would be dropping approximately 18 percent over three years? I know personally as a neurologist in solo private practice, I can't take an 18 percent cut – period,” she said.
Dr. Sigsbee hopes that members of Congress will recognize that their constituents may be unable to receive the care they need if pay cuts diminish the supply of neurologists.
Well-managed neurology practices typically use half their annual revenue to cover overhead costs. Thus, if a neurologist primarily serves Medicare patients, an 18 percent revenue cut from Medicare over three years would translate into a 36 percent reduction in take-home pay — with overhead costs that would remain unchanged or even increase.
“That's going to be very difficult for people to handle,” he said. “Particularly in rural areas, there are a number of neurologic practices that are really pretty marginal financially, and they could pull up stakes and stop practice.”
PHYSICIANS VS. PHYSICIANS
As a member of the Cognitive Specialty Coalition, the Academy is aligned with the American College of Rheumatology, the Infectious Disease Association of America, and others to oppose MedPAC's proposal, Dr. Jones said.
Meanwhile, the Alliance of Specialty Medicine, which includes the American Association of Neurological Surgeons, the American Gastroenterology Association, and several other medical societies, is also fighting the recommendation. Alliance spokesperson Alex Valadka, MD, a neurosurgeon who practices in Austin, TX, said MedPAC's proposal has a “divide and conquer” element.
“If you're going to try to bully a group into doing what you want them to do, then dividing them is one of the best ways to do that,” he said. “You start dividing the specialists from the primary care docs.”
Dr. Valadka points out that the SGR was not created by physicians so it is unreasonable to expect physicians to pay for fixing it. On this point, Glen Stream, MD, president of the American Academy of Family Physicians (AAFP), agrees.
“The idea that the flawed formula can be entirely corrected on the backs of physician payment doesn't make sense, nor does it seem fair,” Dr. Stream said.
Their agreement seems to end there.
While the AAFP salutes MedPAC's recommendation to protect primary care from the cuts proposed for specialty care, it says the plan will not go very far to close the pay gap between primary and specialty care. Currently, median primary care income is about 54 percent of median subspecialty income, and the MedPAC proposal would narrow that gap to about 57 percent.
The AAFP wants MedPAC to retract its freeze idea and recommend annual increases in primary care pay, plus a differential that alleviates the primary vs. specialty gap. Dr. Valadka, in turn, points out that the Affordable Care Act provided bonus pay for primary care but not specialty care.
“Primary care docs are great, but at some point, someone is going to have to take out a ruptured lumbar disc or brain tumor,” he said.
That said, as the AAN points out in its letter to Congress, the demand for cognitive specialists such as neurologists will be greater with increased prevalence of neurologic and age-related disorders. “We must find other ways to ‘fix’ this system that include recognition of specialties that coordinate and manage care for patients with c-hronic conditions that add a layer of complexity that primary care physicians currently desire when they refer to colleagues with additional training and expertise,” the letter states. “Failure to recognize this, coupled with full implementation of the recommendation, would result in less appropriate care for some of the highest need, highest cost Medicare beneficiaries.”