MedPAC: PFS Proposed rule ill-suited for primary care

Under the first physician fee schedule (PFS) Proposed rule since the repeal of the sustainable growth rate (SGR) formula, the PFS provides inadequate support for primary care, argued the Medicare Payment Advisory Committee (MedPAC) in a letter to CMS Acting Administrator Andrew Slavitt. The MedPAC argued that the PFS is ill-suited for primary care and recommended beneficiary-centered payment approaches, rather than paying for each distinct care coordination activity. The Proposed rule (80 FR 41686) was published on July 15, 2015 (see First post-SGR formula repeal physician fee schedule introduced by CMS, Health Law Daily, July 15, 2015).

Physician fee schedule

In response to a request for comments on whether the PFS should have codes that could be used in addition to, and not instead of, the current evaluation and management (E&M) codes to account for different resources specific to primary care, particularly in cognitive work, the MedPAC responded with concerns that the PFS provides inadequate support for primary care. Though payments have increased over the last decade, compensation for primary care practitioners is substantially less than that of other specialties. Such disparities in compensation could deter medical students from choosing primary care and drive away current practitioners, leaving the risk that primary care services will be underprovided.

Recognizing the imbalance of the fee schedule and the need for coordination of care, the MedPAC recommended extending the primary care add-on payment using a per-beneficiary mechanism, which could help move Medicare payment for primary care toward a beneficiary-centered payment approach encouraging care coordination, rather than a service-oriented fee-for-service approach. Thus, the MedPAC does not support the creation of additional E&M codes for each distinct care coordination activity.

Other issues

The letter from the MedPAC to CMS also addressed other issues, including:

  • Valuation of specific codes: the MedPAC recommended that CMS adopt a normative standard under which providers are assumed to use certain equipment at close to full capacity, based on the expectation that efficient providers would not purchase expensive equipment unless they could use it at a rate higher than 70 percent;
  • Advance care planning services: the MedPAC supports a separate payment for advance care planning services to ensure that people nearing the end of life are able to make their own care decisions;
  • Chronic care management (CCM) for federally qualified health centers (FQHCs) and rural health clinics (RHCs): the MedPAC is concerned that the policy to permit FQHCs and RHCs to bill CCM services could result in higher spending for services already included in existing federal funding streams;
  • Payment for biosimilars under Part B: A payment approach under which the reference biologic and the biosimilar products would be paid under the same billing code merits consideration, the MedPAC stated, citing the belief that Medicare should pay similar rates for similar care; and
  • Quality improvement: the MedPAC identified all the different quality improvement programs relating to physicians and recommended that adopting a streamlined approach to quality measurement for clinicians will allow a more rational use or resources without degradation in quality.