But some of those values are based on exaggerated assumptions for how long a procedure takes and helps unnecessarily raise the doctors’ fees for those services, a Washington Post investigation found. The Post reported its findings this past weekend.
The values are based “on a one-sided negotiation — doctors negotiating with themselves,” said Rep. Jim McDermott (D-Wash.), a critic of the process who has introduced a separate bill on the issue. “There’s a lot of you scratch my back, I’ll scratch yours.”
The legislation, partly based on proposals from Congress’s Medicare watchdog, would require Medicare officials to collect data such as how much time doctors spend doing procedures. It would reduce the doctor payment for overvalued services. A House subcommittee approved a draft of the bill Tuesday.
The bipartisan group’s focus on mispriced services is part of a much larger bill that also seeks to rescind the complex annual adjustments made to Medicare payments for physicians. Instead, the lawmakers proposed adding regular annual increases to doctor payments and add further incentives based on performance.
A complex set of formulas based on inflation, economic growth and other factors determines the physician payment rate. But each year since 2003, Congress has overridden those formulas, which this year called for a 25 percent cut.
“The old method was a cost-control mechanism that didn’t work," said Miriam Laugesen, a professor at Columbia University’s school of public health who has studied the intricacies of physician pay. “Congress kept choosing to step in. This is a significant break from the past.”
The draft bill would replace the formulas with annual increases of 0.5 percent for the next 10 years and provides further financial incentives for doctors to adhere to best practices. It is, in other words, a version of pay for performance.
The AMA has long sought to undo the current method because the annual changes instituted by Congress are unpredictable and create uncertainty for doctors.
The old method of calculating the payment rate “threatened Medicare annually, sometimes monthly, with large pay cuts that have hobbled physicians’ ability to run their practices and, more importantly, distracted them from their top priority of caring for patients,” said Rep. Fred Upton (R-Mich.), one of the bill’s sponsors. The others were: Rep. Joe Pitts (R-Pa.), Michael C. Burgess (R-Tex.), Frank Pallone Jr. (D-N.J.), Henry A. Waxman (D-Calif.) and John D. Dingell (D-Mich.).
AMA President Ardis D. Hoven issued a statement saying the legislation “represents continued progress, though work remains to be done.”