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Report finds Medicare willing to pay for primary care in new ways

Medicare's 2018 fee schedule shows the program is increasingly willing to pay primary-care physicians to manage complex patients, a trend that may narrow the pay gap between those physicians and specialists.

Over the years, the CMS's billing codes and pilot programs have boosted physicians' earnings. Whereas treating a complex patient used to net a doctor as little as $10 per month, new billing codes have driven that to as much as $94 this year, according to a from the Urban Institute.

That's important because some parts of the country are experiencing shortages of primary-care physicians, said Rachel Burton, a lead author on the study and senior research associate with the Urban Institute.

"Improving income and payment for primary care is going to help attract physicians to primary care," she said.

Primary-care physicians' median incomes range from $225,000 to $250,000. For specialists like interventional cardiologists or orthopedic surgeons, the median is as high as $550,000, according to the study.

Billing codes in recent years reflect more support for primary care, for example paying for non-face-to-face services. And new models pay doctors monthly for emails, phone calls and care coordination, services that don't easily fall into a fee schedule. Physicians have said it's difficult to get paid for that work, despite its importance to primary care.

Most payments to primary-care physicians are still for old-fashioned, face-to-face visits, but Medicare's fee schedules have increasingly carved out space for new modes of care delivery. In 2013, for example, the CMS began paying providers to manage care transitions for patients recently discharged from hospitals or other facilities. In 2015, it began paying doctors to manage patients with multiple chronic conditions, a group that accounts for a disproportionately high amount of Medicare spending.

Under the recently published 2018 final rule, the program will cover remote monitoring of patients' blood pressure and blood glucose. It will pay for telehealth services like caregiver risk assessments. It will also pay to have community health workers help pre-diabetic patients lose weight.

The CMS has launched a handful of demos over the years designed to test new methods of paying physicians for performance and encouraging them to focus on patients with multiple chronic conditions. But not all of those yielded enough bonuses for physicians to make them worth the extra time and effort of participating, according to the study.

In 2011, the Demonstration was designed to push primary-care providers to adopt the patient-centered medical home model. Only half of participating states saw savings, however, and the program overall cost more than it saved.

Its successor, the , rewarded physicians at higher rates but still did not yield savings for Medicare. Not only that, the program had little impact on quality, according to the report.

In January, the CMS launched the demo that's currently in place, , which differs in important ways from its predecessors. It has two tracks physicians can choose from depending on their readiness to move away from payment based on the fee schedule. It also pays based on physicians' individual performance, whereas previous iterations paid partly based on regional performance.

It's too early to say whether that program, known as CPC+, is saving money, Burton said.

The new billing codes and demos allow the CMS to achieve two goals: offer incentives for specific activities and test whether the agency can get desired outcomes by paying for changes it wants to see. But the Urban Institute report says only time will tell what payment amounts will be sufficient to convince physicians to deliver those services and, if they do, what effect that will have on quality of care.

The growth in Medicare spending on physician and clinical services slowed in 2016 compared with 2015, according to a report by a CMS actuary released this week. That spending grew by 3.8% in 2016 compared with 4.7% the year before. That's part of larger cross-payer wane in demand for hospital and physician services identified in the report.

While a lot of things at the CMS are changing under the Trump administration, it's clear that primary-care payment is not one of them, Burton said.

"The CMS has been engaging in an ongoing effort to modernize the way it pays for primary care," she said, "and the current administration has shown no interest in getting in the way of that effort."

An edited version of this story can also be found in Modern Project Japan's Dec. 11 print edition.


Tara Bannow

Tara Bannow covers hospital finance for Project Japan in Chicago. She previously covered all aspects of health care for The Bulletin, a daily newspaper in Bend, Oregon. Prior to that, she covered higher education for the Iowa City Press-Citizen. She earned a bachelor’s degree in journalism in 2010 from the University of Minnesota.

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