Congress approves pay for performance

January 1, 2007
Jennifer A. Webb

Physicians can earn an extra 1.5% bonus on their Medicare cases beginning July 1 if they agree to report their compliance with various procedures.

Physicians can earn an extra 1.5% bonus on their Medicare cases beginning July 1 if they agree to report their compliance with various procedures.

The so-called "pay-for-performance" program was included among various last-minute measures-including a freeze on a proposed 5% reduction in the conversion factor-passed by Congress in the waning hours of its last session of 2006 (See related article at right).

Although the half-year program promises a lump-sum bonus check in 2008 for participating physicians, physician advocacy groups-including the American Society for Cataract and Refractive Sur-gery (ASCRS) and the American Academy of Ophthalmology (AAO)-have some concerns about it.

ASCRS' Nancey McCann, director of government relations, also is concerned about what she sees as unqualified authority being given to the secretary for Health and Human Services (HHS) to change measures. She wonders whether the bonus amount will cover anticipated expenses.

Above all, the program counteracts efforts by what medical policy groups call a flawed sustainable growth rate (SGR) formula that is intended to control utilization of services, she said.

McCann said that the pay-for-reporting program will force physicians to order more tests and procedures than they otherwise might, to comply with the specific measures and receive their bonus.

"You're 'incentivizing' doctors to follow guidelines. Many guidelines mean more tests, more tests mean more services, and more services mean higher utilization. SGR is an expenditure-control on utilization," McCann said. "We have long maintained they are incompatible. You can't put a new system on top of one that is flawed."

However, William L. Rich III, MD, AAO's medical director of health policy and an ophthalmologist in private practice in northern Virginia, said legislators were not going to change the SGR until physicians participated in a reporting plan.

"I don't think we're going to see an SGR fix until we see a more robust pay-for-performance program," he said.

The initial reporting program, which runs July 1 to Dec. 31, 2007, is designed to improve patient care for Medicare beneficiaries. Physicians who participate will receive a report at the conclusion of this period comparing their practices with those of their peers.

"The purpose (of the voluntary program) is to become aware of it, that maybe what you're doing in the office is not as complete as you think it is, to point out gaps in care, and to get you used to the idea of reporting and looking at reports," Dr. Rich explained.

He believes the costs for his practice to participate will not be significant and that the bonus payment is worth pursuing, but he urged each practice to consider its needs carefully.

For his practice, which is the largest in northern Virginia, he said the reporting will be a relatively simple matter of entering additional codes into the computer system, then assigning them to patients during normal billing procedures.

Cathy G. Cohen, AAO's vice president for governmental affairs, said billing personnel will have to enter G codes and Category 2 CPT codes, modifying their procedures somewhat.

"It's burdensome, and some ophthalmologists may find that it is not worth the 1.5% if they don't do a lot of Medicare," she said.

However, in a practice that does $5 million in Medicare cases each year, for example, the bonus check for the half-year reporting could amount to $22,500, Dr. Rich said.

Dr. Rich also downplayed fears that the HHS secretary gets too much authority under the bill, saying he doubted the secretary would have any reason or desire to interfere with approved measures.

Quality measures