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AMA president touts new payment model to Congress

Photo by Grant HuangYou would get a five-year vacation from the massive Medicare pay cuts called for by the sustainable growth rate (SGR) formula -- if AMA President Cecil B. Wilson had his way. In his testimony before Congress, Wilson calls for a "three-pronged approach" to reforming Medicare's physician payment system.

It starts with a permanent repeal of SGR, a five-year period of "stable payment updates that keep pace with the growth in medical practice costs" and a transition to new payment models.

The details were sketchy; Wilson didn't mention just how big updates would be in order to "keep pace" with the growth in practice costs. He did offer more specifics on what types of payment models the AMA supports in place of SGR: a more generous accountable care organization (ACO) structure and capitated payment system.

Here's a few of the suggested models from the AMA's fact sheet on Wilson's testimony:

  • Partial capitation. "An ACO would agree to accept a pre-defined monthly per-patient payment during a multi-year period that would be used to cover all of the costs of care for a defined group of patients. The payment would be risk-adjusted and would be lower than what CMS would project paying for those patients under the regular Part A and B payment schedules. This model would enable physician practices with experience in successfully managing capitation contracts under Medicare Advantage and commercial insurance ... to deliver better care to Medicare fee-forservice beneficiaries as well as guarantee savings to the Medicare program. Additionally, it would provide a means for practices to recoup their upfront investments, reward physicians for achieving savings through a particular treatment delivery, and permit them to gain experience managing risk."
  • Virtual partial capitation. "A variant of the model above would define a per-patient budget for a defined group of patients instead of making an upfront payment.  Individual physicians who volunteer to participate would bill for individual services as they will do in Medicare Shared Savings Program.  The total billings would then be compared to the budget, and the payments to the physicians and other providers in the ACO would be adjusted up or down to keep total payments within the budget.  This approach gives physicians the flexibility to use alternative treatment approaches, as in capitation, without requiring them to have the capability to pay claims to other providers."
  • Condition-specific capitation. This model would involve making a prospective payment covering all of the services related to a particular condition or combination of conditions for a population of patients, rather than the full range of conditions as in the partial capitation model described earlier.  Under condition-specific capitation, a specialty physician practice, multi-specialty group, or IPA would be paid a pre-defined amount to cover the costs of all of the care needed to address a particular condition, whether that care is provided by physicians in the organization receiving the payment or other physicians.  For example, a multispecialty group or IPA could be paid a fixed amount to cover the costs of all services associated with care related to its patients’ congestive heart failure, including all physician services, hospital care, rehabilitation, etc.
  • Accountable medical home. "In contrast with the shared savings approach to medical homes, the accountable medical home model would give a primary care practice, multi-specialty group, or IPA the upfront resources needed to restructure the way primary care is delivered to its patients in return for a commitment to reduce the rate at which those patients use emergency rooms for non-urgent visits, are admitted and readmitted to the hospital for ambulatory care sensitive conditions, and order diagnostic tests or other ancillary services that may be inappropriate.  Accountable medical homes could improve patient care and achieve savings for the Medicare program in several key areas without being penalized for the costs of specialized services they are not in a position to control."
Blog Tags: accountable care, AMA, SGR
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