Does Obamacare Make Any Changes to Physician Payments through Medicare/Medicaid? – YES

“H.R. 3590 includes a number of payment improvements for physicians that, combined, will result in immediate and significant Medicare payment increases for many physicians…

All physicians in family medicine, internal medicine, geriatrics and pediatrics whose Medicare charges for office, nursing facility and home visits comprise at least 60 percent of their total Medicare charges will be eligible for a 10 percent bonus payment for these services from 2011–16…

All general surgeons who perform major procedures (with a 10- or 90-day global service period) in a health professional shortage area will be eligible for a 10 percent bonus payment for these services from 2011–16.”

“Primary care physicians serving Medicaid patients would see their Medicaid payments rise under a proposed rule announced today by Health and Human Services (HHS) Secretary Kathleen Sebelius. Through the Affordable Care Act, the increase would bring Medicaid primary care service fees in line with those paid by Medicare. The boost would be in effect for calendar years (CY) 2013 and 2014. States would receive a total of more than $11 billion in new funds to bolster their Medicaid primary care delivery systems.

Secretary Sebelius also announced today that, in 2011, over 150,000 primary care providers nationwide received almost $560 million in higher Medicare payments because of the Affordable Care Act. This is another way the Affordable Care Act rewards doctors, nurse practitioners, physician assistants, and other primary care providers who are central to our health care system…

Today’s proposed rule would implement the Affordable Care Act’s requirement that Medicaid reimburse family medicine, general internal medicine, pediatric medicine, and related subspecialists at Medicare levels in CY 2013 and CY 2014. The increase in payment for primary care is paid entirely by the federal government with no matching payments required of States.”

“Obamacare does not substantially change the general pattern of the government’s systems of physician payment but instead expands their reach and adds new regulatory restrictions. For example, beginning in 2010, the new law, with few exceptions, will prohibit physicians from referring Medicare patients to hospitals in which they have ownership.

In 2011, Medicare primary care physicians and general surgeons practicing in ‘shortage’ areas will receive a 10 percent bonus payment. And primary care physicians participating in Medicaid will get no less than 100 percent of the Medicare payment rates for their services for 2013 and 2014, with the federal taxpayer making up the difference between Medicaid funding and the higher Medicare payment rates. But there is a catch: There is no provision for continued federal taxpayer funding beyond these two years, so states will have to either increase their own Medicaid expenditures substantially or cut back their Medicaid physician payments…

On top of existing payment rules, regulations, and guidelines, the new law creates numerous new federal agencies, boards, and commissions. There are three that have direct relevance to physicians and the practice of medicine:

1. Under section 6301, Obamacare creates a ‘non-profit’ Patient-Centered Outcomes Research Institute. It will be financed through a trust fund, with initial funding starting at $10 million this year and reaching $150 million annually in fiscal year 2013, with additional revenues from insurance fees. In effect, the institute will be examining clinical effectiveness of medical treatments, procedures, drugs, and medical devices. Much will depend upon how the findings and recommendations will be implemented and any financial incentives, penalties, or regulatory requirements.

2. Under section 3403, there will be an Independent Payment Advisory Board in 2012, with 15 members appointed by the President and confirmed by the Senate. The board would aim to reduce the per capita growth rate in Medicare spending in accordance with specified targets (based initially on measures of inflation and eventually GDP growth) and make recommendations for slowing growth in non-federal health programs. The board’s recommendations would go into effect unless Congress enacts an alternative proposal. An unprecedented cap on Medicare spending, the process would doubtless reduce Medicare physician payment.

3. Under section 3002, the law extends the Physician Quality Reporting Initiative. While it provides incentives for the quality of care delivered to Medicare beneficiaries, the program is nonetheless burdened with time-consuming compliance and reporting requirements.”

“The Affordable Care Act (ACA) requires that the Centers for Medicare & Medicaid Services (CMS) implement a value-based payment modifier that would apply to Medicare fee-for-service payments starting with some physicians on January 1, 2015, and applying to all physicians and groups by January 1, 2017. The value-based payment modifier is intended to pay physicians differentially based on the quality of care they provide and the cost of that care. It would incorporate the use of Physician Feedback reports, which are confidential reports that quantify and compare the quality of care furnished and costs among physicians and physician group practices, relative to the performance of other physicians.”

“Another law affecting physicians is the Physician Quality Reporting Initiative, or PQRI. The program is to improve the quality of care delivered to Medicare patients. If doctors report the specified quality data, meaning that they are complying with federal standards in the delivery of care, they get Medicare bonus payments. If they do not reply and do not report the required data, their Medicare payments are cut. By 2015, the law makes participation compulsory for participating physicians in Medicare…

Under the ACA, CMS officials will also be charged with designing 20 new payment systems for physicians. The statute specifically calls for the reduction of Medicare payments away from traditional fee-for-service, which serves about 77% of seniors today, in favor of salaried physician payments.”