Since the early 1990’s Medicare has paid doctors based on a resource based relative value schedule (“RBRVS”) developed at Harvard. Congress sets the dollar value that is multiplied times the scheduled value — the product essentially is the Medicare payment. In the late 1990s Congress adopted the flawed sustainable rate of growth (“SGR”) formula, The SGR for the past decade has produced doctor pay cuts that Congress has overridden.
California Healthline reports that last week a bipartisan doctor fix was introduced in Congress. “Under the new bipartisan draft proposal [in lieu of the SGR], Medicare physician reimbursements would grow by 0.5% annually over five years. Starting in 2019, Medicare would switch to an enhanced fee-for-service system that would provide physicians with updates and payment incentives based on their performance on certain quality measures.” Now Congress has to figure out how to pay for the fix — $139 billion over 10 years. Congress has until the end of this year to pass a permanent or temporary fix.
The FEHBlog was flabberghasted today by a lengthy Washington Post article that everyone should read. It turns out that after Congress adopted the RBRVS the AMA offered to update the RBRVS annually at no cost to the Government. This is the same AMA that sued the dickens out of United Healthcare and its then Ingenix subsidiary for maintaining a usual, customary, and reasonable charges database used to pay out-of-network providers. The Washington Post reports that
Unknown to most, a single committee of the AMA, the chief lobbying group for physicians, meets confidentially every year to come up with values for most of the services a doctor performs
Those values are required under federal law to be based on the time and intensity of the procedures. The values, in turn, determine what Medicare and most private insurers pay doctors.
But the AMA’s estimates of the time involved in many procedures are exaggerated, sometimes by as much as 100 percent, according to an analysis of doctors’ time, as well as interviews and reviews of medical journals.
Between 2003 and 2013, the AMA and Medicare have increased the work values for 68 percent of the 5,700 codes analyzed by The Post, while decreasing them for only 10 percent.
While advances in technology and skill should have reduced the amount of work required, the average work value for a code rose 7 percent over that decade, largely because officials raised the value of doctors’ visits. The rise came in addition to allowances for inflation and other economic factors.
When discussing the rise in the nation’s bills for physicians, AMA officials note that they only assign points to procedures — so the Medicare bill depends upon how much the federal government decides to spend for each point.