American College of Physicians calls for new payment models as Medicare reform rhetoric heats up

May 11, 2012

Medicare is on a collision course with insolvency, and the impact to patients and U.S. physicians could be just as catastrophic if reforms aren?t prudent, according to the American College of Physicians (ACP).

New Orleans-Medicare is on a collision course with insolvency, and the effect on patients and U.S. physicians could be just as catastrophic if reforms aren’t prudent, according to the American College of Physicians (ACP).

Virginia L. Hood, MBBS, MPH, MACP, the group's president at the time of the recent annual meeting, says the organization recognizes that the growth of healthcare spending will continue to mushroom over the next 25 years as baby boomers seek benefits from the Medicare program. But ACP is cautioning lawmakers from cutting too deeply.

"We have long supported efforts to ensure that Medicare beneficiaries have access to affordable, high-quality, coordinated care, so [we] want to have evidence that a revised system would meet these criteria."

Too little is known about the effect of Medicare reform proposals such as one that calls for a premium support (defined contribution) program where beneficiaries receive a finite amount of money to purchase health insurance. The association recommends a pilot test to ensure cost shifting does not hinder access to care.

"Until we have data from pilots, ACP cannot support adoption of an untested model, just as physicians would not recommend a brand new treatment for our patients without data from clinical trials, without potential benefits and harms," Hood says.

Other proposals call for the program to advance eligibility for Medicare from age 65 to 67, which also could create gaps in coverage, Hood says.

"As an alternative to proposals to shift costs to beneficiaries, many of whom cannot afford to pay more, Medicare should adopt policies to reform payment and delivery systems that get at the true drivers of rising Medicare costs," Hood says. "ACP is concerned that any Medicare reform efforts must ensure a balance between maintaining access to medically necessary care and reducing wasteful and limited value care."

ACP's position paper made these recommendations:

• Medicare must test and accelerate adoption of new care models that improve population health, enhance the patient experience, and reduce per-beneficiary cost.

• ACP recommends that Medicare accelerate adoption of the Patient-Centered Medical Home model and provide severity adjusted monthly bundled care coordination payments, prospective payments per eligible patient, fee-for-service payments for visits, and performance assessment-based payments tied to quality, patient satisfaction, and efficiency measures.

• ACP does not support conversion of the existing Medicare defined benefits program to a premium support model. However, ACP could support pilot-testing of a defined benefit premium support option, on a demonstration project basis, with strong protections to ensure that costs are not shifted to enrollees to the extent that it hinders their access to care.

• ACP supports policies to ensure that Medicare Advantage plans are funded at the level of the traditional Medicare program.

• The Medicare eligibility age should only be increased to correspond with the Social Security eligibility age if affordable, comprehensive insurance is made available to those made ineligible for Medicare.

• ACP supports continuing to gradually increase Medicare premiums for wealthier beneficiaries as well as modest increases in the payroll tax to fund the Medicare program.

• Congress should consider giving Medicare authority to redesign benefits, coverage, and cost sharing to include consideration of the value of the care being provided.

• ACP supports combining Medicare Parts A and B with a single deductible under specified circumstances.

• Supplemental Medicare coverage–Medigap plans – should only be altered in a manner that encourages use of high-quality, evidence-based care and does not lead Medicare beneficiaries to reduce use of such care because of cost.

• Medicare should provide for palliative and hospice services, including pain relief, patient and family counseling, and other psychosocial services for patients living with terminal illness.

• Costs of the Medicare Part D prescription drug program should be reduced by the federal government acting as a prudent purchaser of prescription drugs.

• Congress should amend the authority for an Independent Payment Advisory Board in specified ways, including giving Congress the right to approve or disapprove the board’s recommendations by a simple majority.