American College of Physicians: Internal Medicine — Doctors for Adults ®


Fixing flawed payment system tops Governors' agenda

From the June ACP Observer, copyright 2005 by the American College of Physicians.

By Janet Colwell

SAN FRANCISCO—At its April meeting, the ACP Board of Governors tackled the issue of the dysfunctional payment system, hearing from expert speakers and proposing different solutions to the growing problem.

The Governors also approved a wide range of resolutions, including several related to physician compensation. One of those recommendations focused on funding for pay-for-performance programs.

Three perspectives

Three speakers addressed a combined meeting of the Governors and Regents, giving different perspectives on the problem of dysfunctional physician payments.

College leaders, including Regent Joseph W. Stubbs, FACP, shown here, discuss ways to fix the nation's dysfunctional payment system.

Speaking for physicians, former Regent Cecil B. Wilson, MACP, called the payment system "oppressive, Byzantine and discriminatory." Dr. Wilson, a solo practitioner in Winter Park, Fla., pointed out that payment delays of up to four months are common whenever a patient switches health plans—and that his computer contains more than 1,300 insurer's addresses.

Insurers expect physicians to be 100% accurate in their filings or face delayed payments. Fear of denied or delayed payments, he added, encourages physicians to adopt tactics such as downcoding.

Speaking from the patients' perspective, Glenn M. Hackbarth, JD, current chair of the Medicare Payment Advisory Committee, pointed out that patients are concerned with coverage availability, affordability and administrative complexity. Patients are also increasingly concerned, he said, about gaps in the quality of care caused by a fragmented health care system.

He also pointed out that Americans' pervasive belief that science and technology can triumph over any medical problem drives health care spending, often to the detriment of education and other key areas. Several Governors said that those beliefs also adversely affect the way physicians are paid.

Speaking on behalf of payers, Reed V. Tuckson, MD, senior vice president of consumer health and medical care advancement at UnitedHealth Group, said payers want to work with physicians. But they face relentless pressure from employers who are "terrified" about how rising health care costs are affecting their bottom line. At the same time, he said, consumer and quality groups point to credible studies on medical errors and the gap between cost and quality.

Possible solutions

The Governors discussed the concept of the primary care physician's office as a patient's "medical home," with internists acting as care coordinators and being reimbursed accordingly. Dr. Tuckson said health plans are interested in that idea, but must first see proof that such a system could reduce costs.

Several Governors suggested that the insurance industry could realize substantial savings by standardizing benefits across plans and mandating individual coverage. With simpler communication among all parties, the Governors said, additional funds should be available for providing care.

The Board approved several resolutions related to physician compensation. They recommended, for instance, that the Regents support funding mechanisms for pay-for-performance programs which would include "new" dollars created by cost savings, separate from physician fee schedule updates. The Governors also recommended that the Regents actively work to increase physician compensation for cognitive services.

The Board also recommended that the College work with the AMA to advocate for increased fees for treating Medicare patients in skilled nursing facilities and nursing homes. And the Governors approved a resolution asking the Regents to call on the Centers for Medicare and Medicaid Services (CMS) to reimburse physicians for time spent counseling patient caregivers.

The Governors also approved recommendations on the following:

  • "Welcome to Medicare" exam. The Board approved a recommendation asking the ACP Practice Management Center to expand its online information about the "Welcome to Medicare" initial preventive physical exam and include downloadable forms that physicians could use for the exam's different components.

  • Medical malpractice "health courts." The Governors recommended supporting legislative and private initiatives to study the feasibility of establishing state and federal "health courts." Such courts would adjudicate medical malpractice claims.

  • Electronic health records. The Governors recommended that the Regents work to minimize the cost of electronic health records (EHRs) and seek data on different implementation costs of EHRs in different practice settings. The recommendation also calls for the CMS to fund research projects to develop EHR standards.

  • Medical education. The Governors approved a recommendation calling for ACP to support a paradigm shift in medical education to encourage general internists' optional training in procedures.


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