Congress and health policy experts seeking to curb sky rocketing health care costs are advocating for physician payment reform that rewards quality not quantity of care. Congress is currently considering legislation to move away from the Medicare sustainable growth rate (SGR) formula and allow physicians to use Value Based Purchasing, an Alternative Payment Option, and Chronic Care Management payments.

This panel, composed of experts representing various stakeholders and viewpoints on physician payment reform, offered strategies to reform the current fee-for-service payment system to advance the quality of care while decreasing costs. The speakers included Stacy Sanders from the Medicare Rights Center, Neil Kirschner from the American College of Physicians, Miriam Laugesen from Columbia University, and Sarah Thomas from the National Committee for Quality Assurance. The session was moderated by Paul Cotton from the National Committee for Quality Assurance.

Miriam Laugesen focused on four lessons about the politics behind the sustainable growth rate. She went through the history of the politics behind Medicare payments, discussed the perceived threats that seniors face from any potential Medicare reforms, discussed the proposed payment cuts, and the threat of ‘policy drift.’ Policy drift is when small guidelines and changes cause legislation to drift away from its intended purpose.

Sarah Thomas focused on how Medicare physician payments could be reformed to promote value. She started her presentation by discussing the current proposed legislation. She commented on sustainable growth, whether we should get rid of the SGR, and the importance of getting away from a fee-for-service payment system. She then introduced the three potential payment reforms that are on the table: Value Based Purchasing, an Alternative Payment Option, and Chronic Care Management payments. Ms. Thomas then went into the details of each type of proposed payment reform.

Neil Kirschner weighed in on the proposed legislation from the physician perspective. The American College of Physicians has been at the forefront of moving from a fee-for-service to a patient centered value-based system. He highlighted the amount of administrative stress that physician practices will experience under these changes. He emphasized that in order to help physicians move to a pay-for-performance model we need to provide a transitional pathway and the resources for practices to develop these skills. He commented that reports of the demise of the fee-for-service model of physician payment are greatly exaggerated. Many physicians benefit from this payment model and will be hesitant to switch over. He also commented that many physicians are worried about how well quality ratings really represent their practices. They feel that they are often faced with a choice between being a good provider or getting a good quality report card rating.

Stacy Sanders spoke about the areas of concern that Medicare beneficiaries are experiencing. She examined key aspects of SGR replacement policy, critical Medicare extenders policies, and the financial offsets of health care payment reform. She highlighted the importance of involving the beneficiary community and allowing them to weigh in on payment reform. Medicare beneficiaries are concerned about quality measures development and making sure we are building on pre-existing models of healthcare (such as Patient Centered Medical Homes). She emphasized that Medicare beneficiaries, many of whom are already struggling financially, are anxious about costs from payment reform being shifted onto them.

Overall, the session highlighted the need for change in how physician payments are made but also the myriad of factors that will go into the successful passing and implementation of this legislation. It will be interesting to see if the physicians, beneficiaries, specialists, quality experts, and other stakeholders will be able to come to an agreement over the proposed payment reforms and how to implement them. It will also be interesting to see if Congress will be willing to push forward with these reforms during an election year.

By: Emily Blecker, Research Assistant, AcademyHealth