Promoting physician payment reform, universal access

As the U.S. Congress weighs major reforms to our country's health system, we have been making sure that osteopathic physicians' voices are heard. Through letters to and substantive meetings with leading lawmakers, the AOA has been championing our priorities for health system reform with the 111th Congress.

In early June, I sent an eight-page letter detailing the AOA's vision for reforming health care to U.S. Sen Max Baucus, D-Mont, the chairman of the Senate Finance Committee, and U.S. Sen Charles Grassley, R-Iowa, the committee's ranking member. Simply extending the current broken system to more individuals is not meaningful reform, I emphasized in this letter. "The health care system must take a more longitudinal view of care, fostering long-term relationships between patients and physicians," I wrote.

As I stressed to the senators, the AOA supports universal access to affordable health insurance but opposes using a single approach, applied universally, to meet that goal. To increase health care coverage, the AOA favors reforms to the existing private insurance market and measured expansion of existing government programs, as long as the serious flaws in Medicare, Medicaid and the Children's Health Insurance Program are fixed first.

Congress needs to act immediately to implement long-term reform to Medicare's physician payment system, I wrote, explaining why the sustainable growth rate (SGR) formula used to calculate Medicare reimbursement to physicians is irreparably flawed. I pointed out that the SGR formula is tied to the U.S. gross domestic product (GDP), which grows more slowly than the use of physician services. The formula inaccurately reflects physicians' expenditures, and it results in geographic payment disparities that penalize rural physicians.

As I noted in my letter, the AOA favors replacing the SGR formula with a methodology that would provide physicians positive payment updates annually based on increases in the Medicare Economic Index (MEI)—the same methodology by which hospital, nursing home and Medicare Advantage payments are calculated. A measure of the inflation faced by physicians in their practices, the MEI reflects such variables as employee compensation, rent and equipment costs.

America's Affordable Health Choices Act

Upon review and analysis, the AOA determined that the policies included in the America's Affordable Health Choices Act (HR 3200) are consistent with existing AOA policies and legislative priorities. While not a perfect piece of legislation, HR 3200 takes the crucial step of enacting long-term Medicare physician-payment reforms.

In 2010, physicians face a 21% reduction in Medicare payments, with additional cuts totaling more than 40% projected for the next decade. America's Affordable Health Choices Act would avert these impending cuts and, more important, would establish a fairer formula for calculating physician payments each year. The revised formula would take into account the importance of primary care by not penalizing primary care services for growing at a faster rate than other physician services. In addition, the new formula would not reduce physician payment rates to offset increases in spending on drugs or laboratory services.

The AOA is especially pleased that HR 3200 would set Medicaid payments at 100% of Medicare payment rates. This would go a long way toward ensuring that lowest-income Americans have access to primary care and other ambulatory services.

HR 3200 contains several other provisions that would benefit primary care physicians. For example, all evaluation and management services, along with designated preventive care services, would be reimbursed using a methodology that provides adequate compensation to physicians. In addition, primary care physicians would be eligible to receive 5% bonus payments for providing designated services and 10% bonus payments for working in health profession shortage areas.

America's Affordable Health Choices Act establishes a medical home pilot program for Medicare beneficiaries that would assess the feasibility of reimbursement incentives for qualified patient-centered medical homes. Two medical home models would be tested: an independent patient-centered medical home treating high-need Medicare beneficiaries who have multiple chronic diseases and a community-based medical home targeting a broader population of Medicare beneficiaries.

The AOA strongly supports the medical-home approach to health care delivery as long as it is based on a patient's ongoing personal relationship with a physician. Unfortunately, HR 3200 currently would permit nurse practitioners and physician assistants to lead the pilot medical homes without physician supervision, if allowed under state law. The AOA is advocating for this provision to be modified.

Health insurance reforms

In mid-July, I wrote a letter outlining the AOA's position on HR 3200 to U.S. Rep. Charles B. Rangel, D-N.Y., the chairman of the House Ways and Means Committee; U.S. Rep. Henry A. Waxman, D-Calif., the chairman of the House Energy and Commerce Committee; and U.S. Rep. George Miller, D-Calif., the chairman of the House Education and Labor Committee. In this letter, I noted that the AOA supports many provisions in HR 3200 that preserve and expand access to affordable health insurance coverage.

For example, America's Affordable Health Choices Act would protect choice for individuals by allowing them to keep their employer-based health coverage. We also support provisions in the bill that would prohibit commercial insurance companies from excluding coverage for pre-existing conditions.

In addition, the AOA supports provisions that would establish a Health Insurance Exchange, through which individuals could purchase health insurance for themselves and their families. Overseen by a newly established Health Choices Administration, the Health Insurance Exchange would facilitate access to a network of private and public health insurance plans. We are particularly pleased that small businesses—albeit initially just employers with 10 or fewer employees—would be able to participate in the exchange.

America's Affordable Health Choices Act would require the federal government to offer a public plan choice within the Health Insurance Exchange beginning in 2013. At this time, the bill's public plan provisions are insufficiently detailed for us to support or oppose them.

Per HR 3200, the public plan must compete with private plans, offering the same benefits and abiding by the same market reforms. The AOA needs additional assurances that the public plan would not operate under rules and regulations affording an unfair market advantage.

Currently, the bill does not require physicians to participate in the proposed public plan. Physician payments under this public plan would be 5% higher than Medicare payments. And physicians participating in the public plan would still be able to engage in private contracting arrangements with patients. While these provisions are steps in the right direction, the AOA is advocating for provisions that would ensure free-market competition and fair physician payment.

"A potential public plan should not be based on or tied to the flawed Medicare program," I stressed in my letter to the House committee chairmen. Physician participation in a potential public plan should not be based on their Medicare participation and must be truly voluntary, I emphasized.

First step

More than 1,000 pages long, America's Affordable Health Choices Act contains many provisions that we support and some that we want to see revised.

We are urging members of Congress to make changes to the bill so that it reflects AOA policy on all issues.

The final version of HR 3200 will likely be much different from the current draft. By staying actively involved in reviewing draft legislation and meeting with congressional leaders, the AOA has the opportunity to effect substantive changes to the bill as it moves through the lengthy legislative process.

For more information on HR 3200 and on the AOA's priorities for health system reform, visit Osteopathic.org.

Let your lawmakers know where you stand. Together, we can have a huge impact on the future of our nation's health system.