How Will Health Care Reform Impact Primary Care?

The health care reform law includes some improvements in payment for primary care services; will it be enough to secure the future of the profession?

During their presentation Thursday at the 2010 AAFP Scientific Assembly, “Primary Care and Health Care Reform,” Andrew Bazemore, MD, assistant director of the AAFP Robert Graham Center for Policy Studies in Family Practice and Primary Care, and Kevin Burke, director of AAFP governmental affairs, discussed several specific provisions of the health care reform laws, eschewing political rhetoric to focus on the content of the health care reform law and its impact on primary care.

Bazemore noted that the US primary care system rates poorly by many measures, especially on cost effectiveness, and that “weak financing of primary care is the Achilles heal of the US system.” This applies not just for patients but also for physicians; Bazemore shared the results of several studies that showed that the lifetime ROI of primary care is much lower compared to other specialties, and that inflation-adjusted income for family medicine physicians has declined by about 8% since 1998. Recognition of these financial shortcomings that have contributed to the shortage of primary care physicians led to several of the changes to the reimbursement model that were included in the final version of health care reform.

Burke outlined several of these payment issues and incentive programs for primary care, one of the most important of which is the new 10% Medicare bonus payment for primary care services provided by a primary care physician/provider. To be eligible, a physician must be enrolled in Medicare with a primary care designation of family practice, internal medicine, pediatrics, or geriatrics. The primary care services (codes for office visits, nursing home visits, and home visits) provided in 2008 by an eligible physician had to account for 60% or more of allowed charges under Part B. If qualified, primary care physicians will receive a 10% bonus payment for all primary care services provided from January 1 through March 31. These quarterly payments will be disbursed as separate checks, generated automatically. However, Burke noted that this program is temporary; it will end in December 2015 (this was done so for budgetary reasons and to reduce the total cost of the overall health care reform package).

One of the concerns surrounding this program is that specialists will change their Medicare designation to “internal medicine” to take advantage of bonus payments. Burke also noted that some rural primary care physicians have complained that this program penalizes rural physicians who provide a broad array of primary care services that don’t fall under the office visit designation. Burke also said that the original House bill permanently applied this payment bonus to ALL Medicare billing, with a 50% threshold that included preventive health services.

Another key feature of primary care payment reform is that in 2013 and 2014, Medicaid must pay primary care physicians at least as much as Medicare pays for primary care services. Burke said that this provision only applies to primary care physicians and for primary care services, but does include preventive services.

The health care reform laws also call for the creation of Accountable Care Organizations (ACO). By January 1, 2012, HHS must establish a new Medicare shared savings program that allows groups of providers to work together within a legal entity to manage and coordinate care for Medicare patients. Burke said that the question now is how to define this entity and create parameters that establish payment and accountability mechanisms. Hospital groups have proposed that hospitals manage payment disbursements to affected primary care providers, which would potentially have negative affects for primary care physicians. Burke said that primary care physicians and their leadership must “get out in front of this” and ensure they retain control over care and payment. He said that CMS may have preliminary rules for public comment by December 2010.

Other parts of health care reform call for greater authority for patient-centered medical home (PCMH) demonstration projects, which must be paid a per-patient, per-month care coordination fee, in addition to regular fee-for-service payments. Burke said that at some point PCMHs will probably require some kind of third-party recognition/designation. The Physician Quality Reporting Initiative (PQRI) will continue through 2014. The program calls for a 1% payment bonus for 2011, with a 0.5% bonus through 2014. A penalty of1.5% for failure to report quality data satisfactorily begins in 2015, and increases to 2% in 2016 and beyond. By 2013, HHS is required to have a plan in place to integrate PQRI into EMR reporting requirements.

Other changes to primary care reimbursement include: Medicare will pay for annual wellness visits beginning in 2011, state Medicaid services must pay for tobacco cessation services for pregnant women starting 2011, and Medicare will waive cost sharing for preventive health services starting in 2011.

What about everyone’s favorite topic, reforming the sustainable growth rate (SGR) formula for Medicare payment? The speakers said that Congress has extended the current formulation until November 30, and that the AAFP is asking Congress to extend payment for another year to allow the next Congress to create a better plan that provides more equitable pay for primary care physicians over a 3-5-year period. The thinking is that this will allow the AAFP and other stakeholders the chance to gather data needed to craft a viable long-term payment plan.

During the question-and-answer session that followed the conclusion of the presentation, an audience member had the quote of the day: he said that “Everyone is in favor of building the medical home, but nobody wants to pay the rent” and asked why the PCMH “is such a hard sell.” The panelists said that the simple fact is that the system favors non-primary care elements of care; we currently pay 40% more per capita for our health care than other developed countries, and no stakeholders want to give up their share of that 40%.