In the rush forward into alternative payment models, including accountable care organization (ACO)-based models, could primary care physicians be in the process of being progressively disadvantaged? A new analysis by a medical researcher suggests that such might be the case, at least when it comes to payment for evaluation and management (E&M) services.
Writing in the February 7 issue of The New England Journal of Medicine, Bruce E. Landon, M.D., has done an analysis of a complex, somewhat technical set of issues, around E&M service payments, in an article entitled “A Step toward Protecting Payments for Primary Care.” Dr. Landon, a professor of health care policy at Harvard Medical School and a professor of medicine at the Beth Israel Deaconess Medical Center, who practices internal medicine at BIDMC, writes that “Even as the U.S. health care system increasingly adopts alternative payment models such as accountable care organizations, the traditional fee-for-service system continues to be the most commonly used method of physician payment. Moreover, although alternative payment models often involve budgets that require organizations to accept risk for spending, fee for service is still the principal payment method under these models and is used to track spending against the budgets. Thus, challenges posed by fee-for-service payment will not be solved simply by more rapid adoption of new payment models.”
Indeed, Dr. Landon notes, “A major criticism of the fee-for-service system is that it penalizes primary care physicians and others who principally provide evaluation and management (E&M) services. Even after Medicare implemented the resource-based relative value scale payment system, which was in part designed to address this problem, the Medicare fee schedule continued to be criticized for short changing E&M services. Recently, the Centers for Medicare and Medicaid Services (CMS) proposed a substantial revision to E&M payments. Under this proposal, CMS would replace the graded payments for the increasingly complex level 2 through level 5 visits with a single flat payment rate.1 This proposed rule would ease documentation requirements for physicians providing E&M services, but total payment levels for these services would be relatively unchanged. Although the proposal would make a substantial revision to E&M payments, it would maintain features of the current system for updating the value of relative value units (RVUs) for existing services and assigning RVUs for new services that have exacerbated distortions in payment over time. I believe that any change to make E&M payments more reflective of the work involved in delivering such services should address these features of the system as well.”
Dr. Landon goes on to analyze a number of technical, detailed elements in this situation. After going through a number of the more technical elements involved, he writes, “Clearly, this analysis suggests that fixing payment levels for primary care physicians and others providing E&M services will require strategies both for adjusting current levels of payments and for mitigating the deleterious consequences of the updating process. CMS has taken several concrete steps related to the first strategy, such as expanding the number and types of billable services for primary care — introducing payments for annual wellness visits, transitional care management, and chronic care management services, for instance. But the uptake of these auxiliary codes has been low, probably because complex requirements must be met in order to bill for these codes, and whether their use improves care remains unclear.5 Moreover, billing for services using these codes adds complexity to documentation and service delivery, an effect contrary to the spirit of the proposed payment rule.”
And he notes that, “Although the resource-based relative value scale was designed to improve the fairness of the reimbursement system, the combination of the updating process and budget-neutrality requirements has resulted in substantially lower payments for E&M services over time. As adjustments to payments for primary care are debated, we should consider addressing these other features of the system. Creating a separate conversion factor for some set of E&M services,” he concludes, “would help prevent further erosion of E&M payment rates and create downward pressure on procedure payments to reflect increases in efficiency over time.”
