It all started with Senators Cassidy (R-LA) and Whitehouse (D-RI) unveiling their plan for primary care provider payment reform, complete with a request for information and legislation, the Pay PCPs Act. Just two days later, Senator Wyden (D-OR) and Crapo (R-ID), Chair and Ranking Member of the Senate Finance Committee, respectively, unveiled a whitepaper focused on physician payment reform titled, “Bolstering Chronic Care through Physician Payment: Current Challenges and Policy Options in Medicare Part B.” While the Cassidy/Whitehouse effort focuses on primary care, the Wyden/Crapo paper delves into one of Senator Wyden’s top priorities, treatment for patients suffering from chronic illnesses. As a former lobbyist for a surgical subspecialty, I have to confess that both of these developments tell me that the Senate is ready to reform physician payment to make sure primary care physicians get paid more. Add to that the notion that the TEAM payment proposal is, by definition, aimed at reducing the costs of specific episodes of specialty care and you start to see why I’m happy to have a few from the spectator’s gallery on this one.
My very first blog post talked about the mechanisms designed to keep Medicare physician payment, in the aggregate, from going up. The physician fee schedule is an excellent example of a receding tide stranding all boats. But that doesn’t explain why I’m so amped up over primary care getting so much air time. To understand that, you also have to realize that the physician fee schedule is like pie. If primary care gets a bigger piece, the orthopaedic surgeons and dermatologists, for example, are going to get smaller pieces… and they probably aren’t going to like it.
In trying to keep the [piece] (pun intended), the physician lobby has tried to focus on making the pie bigger rather than leaving its constituent parts fighting over crumbs. However, as one might imagine, it is a delicate political alliance that is frequently tested. This brings us back to our latest tests: the TEAM proposal and the Senate focus on primary care payment reform.
You may be asking, if it’s that obvious, why isn’t anyone talking about this? Shouldn’t we expect to see the Jets (primary care) and the Sharks (specialists) having dancing battles in the streets? Aren’t you, SHP, just creating drama?
Well, not exactly. But hear me out because this time they may be practicing their snaps and jazz moves. Take this week’s update, for example. We have a few main characters:
- Hospitals
- Private Equity
- Physicians
- Payers (including CMS and Medicare Advantage plans)
Hospitals
The hospitals are the ones who are technically on the receiving end of the new, mandatory TEAM proposal. Although the different specialties impacted by the proposal will have comments on how the bundled payments will impact clinical care, the hospitals are the ones who will have to count the beans and deal with the consequences, for two reasons: 1) they are the ones who will get the check from CMS to pay the bill and 2) in most cases, because of consolidation, most of the specialists who are subject to the model are hospital employees whose salaries have already been negotiated.
- On count one (the bean counting): We find that Hospital groups said, this week, the proposed TEAM payment bundling program may prove overly burdensome to an industry already working to implement other Centers for Medicare and Medicaid Services reimbursement experiments.
- On count two: A coalition of 230 national associations, including both major hospital trade associations, submitted a letter to the Federal Trade Commission requesting a stay on the Sept. 4 effective date of the Non-Compete Clause Final Rule to allow for judicial review.
Private Equity
Private equity is probably the fastest growing, dirty little secret in health care. Gone are the days of docs graduating from medical school and hanging a shingle. Nowadays, most new grads are contracting directly with a hospital or integrated health system (see above) or joining an existing practice. Unfortunately, many private practices have been unable to keep their doors open and have either sold to hospitals or to private equity firms. So is it a coincidence that new reporting in the Wall Street Journal is shining a spotlight on “private-equity investors who have poured billions into healthcare but often game the system, hurting both doctors and patients.
Physicians
Clearly the docs are key to the previous two stakeholder descriptions (hospitals and private equity) but they have managed to add a bit of fodder themselves. This week, the Medical Group Management Association (MCMA) published the results of a survey that demonstrated that physician and advanced practice provider compensation continued to rise in 2023 despite increasing overhead costs and reimbursement challenges. MGMA says doctors ‘defied gravity’ by working harder. Interestingly, while some reporting focused on gains for specialists, others noted that primary care physician compensation surpassed $300,000 last year as doctor practices and the healthcare industry grapple with staffing issues in a tight labor market.
So is it really a surprise that Modern Healthcare reported this week that “contract negotiations are growing more contentious between providers and payers as both sides battle rising costs?”
Payer
This one is a bit of a scattershot but I do think we can see a narative begin to take shape. Payers may be able to standby and watch most of the changes above with very little at risk, but they are not immune from all changes. While hospitals and docs are balking at the latest payment model from CMS, health insurers are voting with their feet and opting out of an accountable care organization pilot program intended to reduce costs for fee-for-service Medicare enrollees amid a surprise spike in medical costs and unfavorable regulatory changes. Private insurers who still offer Medicare Advantage plans (a few have pulled out of the program for next year) are going to have to deal with a new federal effort to promote health equity that will redistribute billions of dollars in Medicare Advantage Star Ratings bonus payments among health insurance companies.
But there’s hope, right? Someone has a solition to all of this? To that I say, everyone really should be reading this week’s piece by John Wilkerson at Stat titled, “Value-based payment is getting renewed attention. What it means isn’t getting any clearer.”
But also, stay tuned…
Image source Metro Goldwyn Mayer
