American Medical Association (AMA) president Nancy Neilsen, MD, said, “This congressional debate underscores the need for lawmakers to permanently replace the flawed Medicare physician payment formula so physicians can focus on the real work at hand: taking care of patients.”
Medicare change only fixes fees until 2010
The cost of this bill has been estimated at about $20 billion, spread over 5 years. This provides only a partial and temporary fix for Medicare physician fees, which had been at 2001 levels and will become an issue again when predicted fee cuts of 20% are scheduled to take effect in 2010.
“Members of Congress have urged physician groups to develop their own proposals, but because any viable plan is certain to result in both winners and losers, organized medicine, too, has been reluctant to act. So for the time being, annual Band-Aids will continue to be the standard of care for Medicare's physician-payment woes,” commented John Iglehart, national correspondent for The New England Journal of Medicine.1
Conflict over reducing reimbursement for Medicare Advantage
The root conflict between the Bush Administration and supports of the Medicare bill was over taking money away from private Medicare Advantage plans that contract to cover Medicare beneficiaries and using those funds to stop the fee cut to physicians. When Medicare was originally authorized to contract with private health plans, the thought was that the plans would save money by introducing innovations into the program, and they were reimbursed at 95% of the rate for fee-for-service care. Most of the early participants were not-for-profit health maintenance organizations.
When that didn't work out as expected, Medicare increased the rates for Medicare Advantage above those paid for traditional fee-for-service Medicare. By 2006, the per-patient cost for Medicare Advantage was 112% of that for traditional fee-for-service, generating about $10 billion/year of additional costs for treating Medicare patients.
The new Medicare law
- blocks the 10.6% 2008 fee reduction
- blocks the 5.4% 2009 fee reduction
- authorizes a 1.1% fee increase for 2009
- grants 0.5% to 2% bonuses to doctors who order electronic prescriptions between 2009 and 2013
- cuts fees by 2% for doctors who do not use electronic prescribing by 2012
- increases incentives to primary care physicians who practice in underserved areas
- reduces the copayment for mental health services from 50% to the same 20% for other physician visits, phased in to 2014
- adds benzodiazepines and barbiturates to the Medicare drug benefit for certain conditions
- extends the period for the “welcome to Medicare” physical to 12 months after a patient signs up for Medicare
- gives Medicare the right to decide whether to add preventive treatments to the program, which previously required an act of Congress
- requires Medicare Advantage fee-for-service plans to bring doctors who accept the plans into a network, similar to preferred provider organizations
- delays a requirement for competitive bidding for durable medical equipment
Translating legislation into practice
The electronic prescribing requirement will affect every physician who treats Medicare patients and every pharmacy, particularly independent pharmacies. Currently only about 6% US doctors use e-prescribing. An estimated 70% of all pharmacies can currently receive e-scripts, but only about 31% of independent pharmacies can do so. This provision is expected to greatly increase business for e-prescribing networks such as SureScripts-RxHub LLC, the newly-merged combination of the two largest networks.
Physicians can get information on how to move to e-prescribing at www.GetRxConnected.com, a program launched by the American Academy of Family Physicians, the American Academy of Nurse Practitioners, the American Academy of Pediatrics, the American Academy of Physician Assistants, the American College of Cardiology, the American College of Obstetricians and Gynecologists, the American Osteopathic Association, and the Medical Group Management Association.
References
1. Iglehart JK. Medicare showdown [published online ahead of print July 16, 2008]. N Engl J Med. 2008; https://content.nejm.org/cgi/content/extract/329/21/1593.
2. 110th Congress 2008. H.R. 6331: Medicare Improvement for Patients and Providers Act of 2008. GovTrack.us Website. http://www.govtrack.us/congress/bill.xpd?tab=speeches&bill=h110-6331.