MedPAC sets sights on specialty reimbursement

By Kate Madden Yee, AuntMinnie.com staff writer

January 25, 2017 -- The Medicare Payment Advisory Commission (MedPAC) is setting its sights on raising payments for primary care providers by reducing Medicare reimbursement for specialty physicians -- including radiologists.

"Primary care services are underpriced in the fee schedule," said presenters Ariel Winter and Kevin Hayes at a meeting on January 13. "Primary care is labor-intensive, which limits potential for efficiency gains and volume growth, [while some] specialties can increase the volume of services more easily."

Winter and Hayes noted discrepancies between primary care and specialty physician reimbursement, emphasizing that there are wide income differences between primary care and radiology/nonsurgical procedural specialties.

Income disparities among medical specialties in 2015
Specialty Average annual compensation
Primary care $264,000
Nonsurgical, nonprocedural (i.e., neurology) $327,000
Surgical $508,000
Nonsurgical, procedural (i.e., dermatology) $545,000
Radiology $560,000

MedPAC proposed three options for mitigating these differences (all of which are based on about 126 Medicare beneficiaries per primary care provider to calculate additional payments):

  • Option 1: Implement a 1.3% reduction in payments for nonprimary care services, including procedures, imaging, tests, and evaluation and management services provided in emergency departments and inpatient hospitals. This cut would result in an additional per-beneficiary payment estimated to total approximately $3,600 per primary care clinician per year -- and radiologists would be among the group of specialty physicians subject to it, the American College of Radiology (ACR) said in an analysis.
  • Option 2: Increase per-beneficiary payments to $1.2 million, taking $700 million from option 1 and $500 million from the U.S. Centers for Medicare and Medicaid Services (CMS) Merit-Based Incentive Payment System (MIPS). This would result in an increase to primary care clinicians of approximately $6,000 per year.
  • Option 3: Allow primary care providers in all two-sided accountable care organizations to receive a portion of payments for primary care visits as upfront payment, as well as a per-beneficiary payment from option 2. This could result in a total per-beneficiary payment increase per clinician of approximately $16,000.

MedPAC commissioners expressed concern that if the current physician payment imbalance isn't addressed, it may lead to a shortage of primary care physicians to treat Medicare patients, the ACR said. Yet most did not support the proposed options, instead favoring an overhaul of the Medicare Physician Fee Schedule, according to the ACR.


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