Payment Reform Meeting

At the Building Consumer and Physician Consensus Around Physician Payment Reform Meeting on March 13, 2009, the Institute of Medicine, the ABIM Foundation and AARP convened 40 leaders from physician and consumer organizations, congressional staff, health services researchers and policy makers to explore areas of agreement and divergence on the topic of physician payment reform. The participants aimed to define short- and long-term objectives for physician payment reform, with a focus on the implications for health care reform legislation. The ideas discussed at the meeting helped inform dialougue at the 2009 ABIM Foundation Forum, which focused on developing principles to guide physician payment reform. A white paper, Physician Payment: Current System and Opportunities to Reform, co-sponsered by the Institute of Medicine, ABIM Foundation and AARP was developed.

Policy makers need to focus on reforming physician payment to help achieve the goals of high-quality health care.
Payment reform can encourage a greater focus on primary care, disease prevention and effective management of chronic conditions.
This payment system would support care coordination and integration, smoother transitions and team-based care, and more explicitly foster patient- and family-centered care.
It also would support universal access to effective, affordable health care that would be equitably provided so as to reduce disparities in care.
Finally, payment reform would support and strengthen patient-physician communication and promote fulfillment of the clinician’s professional responsibilities, including accountability for cost and quality.
Because of the variety of physician types, diversity of practice forms and dearth of evidence on the effects of various payment options, there is no evident “one size fits all” solution to physician payment reform. By adopting a variety of reform measures, policy makers should consistently reinforce the aim of improving the quality of care.
Legislation should enable alternatives to fee-for-service (FFS) payment, including bundled and episode-based payment, hybrid models and shared savings models. These will require ongoing evaluation and technical adjustments, including determining the appropriateness of services, how to define episodes, and how to pay for multiple episodes, among other issues.
Some participants thought policy makers should build on the current Medicare pay for reporting model, the Physician Quality Reporting Initiative, and incorporate Maintenance of Certification as one pathway toward improving physician performance.
While policy makers are testing and implementing new payment models, they should take steps to improve FFS payment, e.g., deal with price distortions, reduce over-inflated volumes for particular services and enhance the Resource Based Relative Value Scale Use Committee (RUC) process (which is charged with making recommendations to Medicare about how to value services).
Reform of the RUC is more likely to happen if there is external pressure from an outside advisory group or if the governance of the RUC changes. Reform ideas suggested include that the RUC have access to actual data, not estimates by specialty societies; that the RUC consider evaluating primary care services on a rolling basis; that the RUC consider “non-granular” services in addition to individual procedures; and that there be incentives at the individual physician level to moderate the pace of rising costs, among other ideas.
Although the group shied away from promoting any particular organizational model, they did underscore that payment reform needs to be focused on driving integrated and coordinated care.
Participants noted that there is a need to figure out how to better link hospitals and physician organizations in spite of current incentives to do otherwise.
Some noted that incentives were needed to move physicians into larger and more integrated practices, with global budgets or capitation with protected risk corridors (and reinsurance) to undergird them.
Others suggested that payment reform should accommodate innovations in the delivery of care, such as medical homes and accountable care organizations.
Finally, participants noted that both medical students and practicing physicians will need training to adapt to new payment systems, to learn how to work together in teams with other types of clinicians, and to work within larger delivery systems.
A successful payment reform program would increase payments to primary care physicians (PCPs), and the group advised a stepwise approach to doing so. Initially, additional resources to PCPs should be tied to care delivery enhancements and eventually linked to a patient-centered medical home (PCMH) or some other, similarly integrative care delivery model.
Most of the meeting participants thought that providing PCPs with higher fees or other forms of financial support, such as loan forgiveness or expansion of the National Health Service Corps, should be linked to some kind of expectation and/or requirement for service.
Ideas about new PCP requirements as a prerequisite for additional resources included 24/7 coverage, garnering patient feedback via experience surveys and launching (or expanding) patient education programs.
A number of those at the meeting expressed the opinion that the PCMH needs to be more thoroughly evaluated—e.g., to test whether initial hospitalizations and readmissions could be reduced and communication and patient satisfaction increased—before it could be viewed as a model that should be promoted on a national scale.
The notion that there should be comprehensive payment (e.g., across care episodes and settings) for comprehensive primary care (e.g., management of a heart failure patient) was touched on many times.
As health reform is an urgent legislative priority, there is a need to quickly introduce ideas for payment reform. At the same time, in light of the variety of practice types and settings and state of knowledge, a number of participants advised building in an agreed-upon process for continuous policy development and evolution in the physician payment arena.
There is a pressing need to get ideas to congressional staff immediately, given Congress’ desire to have a marked up bill by this summer.
Participants are cautioned by the recognition of how other innovative payment models have run amok.
Ideally, the reform process will be a collaborative effort in which responsibility for progress is shared by thought leaders, medical organizations and the government.
Ideas that participants had about how to build in an ongoing process for continuous policy development in the physician payment arena included a Health Board or a formal group set up to develop payment policy over time in liaison with the HHS secretary.