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    American Urological Association offers concrete solutions to sustainable growth rate problem

    Suggestions include value-based purchasing, liability reform


    Bob Gatty
    Washington—Despite the nation's budget crisis, the fact that Medicare reform is being discussed and a near-30% cut in Medicare physician fees looms in January appears to be providing some incentive for lawmakers to get serious about reforming the system used to pay doctors who treat patients under the program.

    "Let's all accept the premise that SGR has to go," Rep. Michael Burgess, MD (R-TX), declared during a hearing on the Medicare sustainable growth rate payment formula held in May by the House Energy and Commerce Subcommittee on Health.

    Last December, President Obama signed a short-term fix that delays scheduled cuts through 2011. However, when that measure expires Jan. 1, 2012, physicians will face a 29.5% cut unless the system is changed before then or another temporary reprieve is enacted. The president's 2012 budget would freeze payments at 2011 levels for the next 10 years at an estimated cost of $298 billion.

    "As Congress considers how to address the SGR problem this time around, I urge the subcommittee to look beyond approaches that remain tied to the existing formula simply by delaying it again, or by resetting baselines to higher spending levels," former Centers for Medicare & Medicaid Services Administrator Mark McClellan, MD, PhD, told the subcommittee.

    In response to a subcommittee request, the AUA submitted recommendations on what to do about the SGR and how to fund the cost of reform. The AUA pointed out that physician practice costs have dramatically escalated while revenue continues to decline. Medicare Part B expenditures on physician services are now 18%, down from 22%, the AUA said.

    "No one has any incentive to rein in costs," wrote Datta G. Wagle, MD, who was AUA president when the AUA submitted its recommendations. "Each constituent is trying to maximize their own benefit by trying to survive without looking at the entire cost. As such, the system is currently getting the exact outcome it was designed to obtain as multiple factors lead to increased costs."

    Those factors, he said, are defined patient benefits, explosion of new treatments and technologies, extension of lifespan, unrealistic patient expectations, liability-driven test ordering, and lack of shared responsibility by all sectors of the system.

    Hospital reimbursement 'major factor'

    Hospital reimbursement is a major factor, Dr. Wagle said, and with current payment policies causing more physicians to become employed in hospital-based facilities, it costs Medicare more because hospital-based payments are higher than payments for the same services in a private practice office.

    "Any proposal to replace the SGR must be coupled with addressing Medicare expenditures across the entire spectrum of health care and should include hospitals, drugs, medical equipment, medical devices, supplies, and home care," he told the subcommittee in the AUA's letter.

    The AUA's proposed solutions to replace the SGR included:

    • Make the 2011 Medicare fee schedule the "baseline" for the future, coupled with the Medical Economic Index for the next 5 years, then re-examine in 2017.
    • Reduce health care expenditures through value-based purchasing, but bear in mind that accountable care organizations (ACOs) are not a "panacea" for smaller communities or practices, and are complex. Simpler solutions, such as accelerating implementation of bundling payments around specific episodes, should be considered.
    • Implement medical liability reform with a safe harbor for physicians who can document conformance to the specialty's evidence-based clinical quality guidelines.
    • Develop a public service campaign based on the concept: "Health care for the elderly is a right; its survival depends upon treating it as a privilege. We all have a stake in its survival."
    • Help Congress understand the administrative burden and associated costs in providing health care services. Simplification and cost savings could be achieved by better coordination of overlapping legislative programs, providing adequate resources to the Department of Health and Human Services, and performing more oversight of the regulatory process to be sure the original legislative intent is achieved.
    • Make it clear to patients that the federal budget is not limitless. "Whether it is a voucher system, a mandatory health savings account process, or simply a means-tested out-of-pocket expense formula, beneficiaries must share in the increasing costs," Dr. Wagle declared.
    • Physicians should have the option to balance bill for services. CMS could create a tiered system for balance billing where the most deserving conditions would have the highest proportion of funds devoted to supporting patient costs (ie, preventive care or evidence-based treatment). Those ranking near the bottom of the list would bear the burden of the highest co-pays, or unlimited balance billing.
    • Legislate use of generic drugs in Medicare Part D.
    • Re-examine the way hospitals are reimbursed by Medicare for drugs, devices, and supplies and understand the cost of physician employment by hospitals.

    "We respectfully ask that the Committee continue to include all physicians, and particularly specialty physicians, in this critical dialogue," Dr. Wagle wrote. "Urology is committed to helping our lawmakers to find an equitable and workable solution."

    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.

    Bob Gatty
    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.

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