Medicare Physician Fee Schedule: Overview and Concerns

Transcription

1 Medicare Physician Fee Schedule: Overview and Concerns Stephen Zuckerman The Urban Institute National Health Policy Forum Assessing Progress on Improving the Data Behind Medicare s Physician Fee Schedule February 17, 2012 Washington, DC

2 Overview of Presentation Policy Context Mechanics of the RBRVS Fee Schedule Data Issues AMA Relative Value Update Committee (RUC) The Role of Time Data Other Issues and Moving Forward 2

3 Policy Context for Fee Schedule Originally, to correct payment inequities across specialties and geography Also, limit beneficiary liabilities Fees do not vary by specialty Many services are nearly specialty-specific; not all specialties have these $64.5 Bil in 2010; 12% of Medicare spending Primary care supply concerns and payment Misvalued services (ACA Sec. 3134)

4 2.5 What if all physicians were paid under the Medicare fee schedule? Hourly Compensation Relative to Primary Care Actual Simulated 0 Nonsurgical, Nonprocedural Nonsurgical, Procedural Surgical Radiology SOURCE: Berenson, et al. March

5 Components of the Fee Schedule Relative Value Units Work, practice expense, malpractice Geographic Practice Cost Indices Conversion factor Other Policy Adjustments

6 Deriving the actual physician fee Total RVUs from physician fee schedule Conversion factor X Adjusted for: Complexity of service and expenses Geographic factors Work RVU X Work GPCI + PE RVU X PE GPCI + PLI RVU X PLI GPCI Payment modifier Adjusted fee schedule payment rate Policy adjustments (multiplicative) Adjusted fee schedule payment rate Provider type Nonphysician Nonparticipating (decreases) Geographic HPSA bonus (increases) Service type Primary care (increases) Major surgical procedures = Payment SOURCE: MedPAC

7 Resource-Based Relative Value Units Work RVUs Time Technical Skill and Effort Mental Effort and Judgment Stress Practice Expense RVUs Direct Practice Resources Indirect Expenses Malpractice RVUs

8 Data for Practice Expense RVUs Not from the Harvard Study Service-specific direct expenses (RUC) CMS collects input price data Surveys of practice-level expenses Formula to calculate indirect expense portion of PE RVUs based on service-level direct costs plus physician work and specialty-specific estimates of indirect costs per hour

9 Data for Work RVUs Less concrete than practice expenses New codes, revised codes and a broader 5-year review Specialty society input to the RUC survey of at least 30 physicians for work and direct practice expenses 2006: Relativity Assessment Workgroup to identify potentially misvalued codes

10 Role of Time in the RBRVS Time is the one aspect of work that could be tracked with objective data Time explains about 80 percent of the variation in Work RVUs across services Also has a key role in the method used to allocate Indirect Practice Expenses Strong evidence that time is not accurately measured

11 Evidence on Errors in Time RTI: Operating logs indicate intraservice time overstated by 30 minutes, on average RTI: Office visit times also overstated Varies by type of visit (new > est) and specialty (spec > prim care) Diagnostic Colonoscopy (intra-service): RUC time is about 30 minutes; NEJM study indicates less than 15 minutes No real mechanism to reflect technological change other than RUC review

12 Optical Coherence Tomography CPT 92135: was replaced by 92132, 92133, in 2011 Old code: 26 min and 0.35 Work RVUs New codes:13-17 min and Work RVUs My reality, an automated test that is performed by a technician and reviewed by the physician in less than 1 min I ve confirmed with MDs that this is not unusual CPT and RUC moved in the right direction but not far enough

13 Perceptions of the RUC Process Unlikely that RBRVS updating can proceed without clinical input Work is too subjective to measure Obvious questions about potential biases and redistributions Incentives for bad behavior are present MedPAC has called for CMS to seek advice independent of the RUC Search for overvalued services

14 Improving RBRVS Time Data Critical if review of misvalued services is going to be credible MedPAC exploring possible approaches Not easy, but seems feasible service-specific times versus analyses of existing data to assess the plausibility of current RBRVS numbers EHRs may have a role

15 Other Issues to Consider Some patients for whom payment is made under global surgical payments rules are handed off to hospitalists and other providers for post-op care Double payment by Medicare? Is there a better way to adjust RVUs as new technologies mature? Automatically reduce RVUs over time? Increasing current E&M fees is not the sole fix for primary care payment

16 Strategies going forward Look at clinical evidence and spending data, not just work and PE RVUs Consider alternative ways of calculating indirect practice expense Develop new codes or payments for achieving new objectives that may not always fit into FFS payment Medical Home demonstrations and ACA Primary Care Fee Bump are examples.