MEDPAC recommends cuts to specialists to fund primary care incentive program

January 27, 2015

In order to continue funding the expiring bonus payment for primary care physicians, the commission will suggest a 1.4% payment cut in 75% of non-primary care services

The Medicare Payment Advisory Commission (MedPAC) is looking for short-term solutions to keep primary care physician payment intact amidst possible cuts.

In order to continue funding a 10% bonus payment for primary care physicians that expires at the end of 2015, the commission will suggest a 1.4% payment cut to 75% of other services in Medicare’s Physician Fee Schedule (PFS). The final recommendations will be included in a report to be sent to Congress concerning the Medicare PFS in March.

The American Academy of Family Physicians reported that MedPAC Chair Glenn Hackbarth, JD, doesn’t want the recommendations to Congress to remove the urgency of a long-term fix to primary care’s payment problems.

"What we're saying is let's not go backward and let's take a step away from fee-for-service,” Hackbarth said. "This is a stopgap. It's small and it's not going to attract huge numbers of people to primary care.”

The per-beneficiary bonus payment goes to physicians who practice internal medicine, family medicine, and general geriatrics and pediatrics as a way to enhance reimbursements and encourage new physicians to study in those fields. Per-beneficiary payments are for evaluation and management services provided during office visits, patient visits in a long-term care facility and home visits, but not hospital visits.

In a presentation to MedPAC members on January 15, the commission said discontinuing the bonus would send a wrong message about the value of primary care in the healthcare system.

Other MedPAC recommendations to be made in the March report include repealing the sustainable growth rate formula, rebalancing Medicare payment formulas towards primary care and more options for integrating alternative payment formulas into healthcare.

The AAFP reported that the commission is divided on how to create long-term, fair payment for primary care in the future. "I've been involved with the fee schedule from the start, and there's never been a year when primary care was funded in a way that was appropriate," said MedPAC Commissioner Kathy Buto, MPA, who suggested valuing primary care separately from specialty care in the Medicare physician fee schedule.

Commissioner William Hall, MD, questioned whether the bonus payment is enough of an incentive to fix the problems with primary care. "If we double the salaries of primary care physicians, we would get more people in primary care, but we would have little or no impact on the system of care that people on Medicare need," Hall said.