Pay for Performance Raises Anxiety Level at AMA

The AMA reiterated its opposition to pay-for-performance proposals that do not meet five broad principles and guidelines for quality during last month's Interim Meeting of the AMA House of Delegates.

The five AMA principles for fair and ethical pay-for-performance programs approved at the June annual meeting of the AMA House of Delegates, state that these programs must:

As public and private payers alike move toward the concept of pay for performance (P4P), delegates at the Interim Meeting in Dallas reiterated those principles. The AMA's stance effectively says “no” to an impending P4P pilot project by the Centers for Medicare and Medicaid Services (CMS) that begins in January 2006, as well as to the Medicare Value Based Purchasing Act of 2005 (S 1356), which would establish pay for performance as the basis for reimbursement throughout the Medicare program.

P4P and a related voluntary data-reporting project floated by CMS just days prior to the AMA meeting were the focus of debate last month (see page 1), with delegates expressing cynicism about the government's moves toward “value-based purchasing” of health care services.

Central to the AMA's opposition to P4P in the Medicare program is the organization's longstanding insistence that the government first reform the physician-payment formula, especially the component known as the Sustainable Growth Rate (SGR). The Value Based Purchasing Act, sponsored by Sen. Charles Grassley (R-Iowa), links P4P to a temporary 1 percent update in physician payment, but the AMA insists on a permanent fix to the payment formula.

Debate at the AMA meeting centered on the dilemma of how much latitude to give AMA lobbyists in negotiations around programs and policies that—like P4P—may have taken on a momentum of their own. By“ drawing a line in the sand,” does the AMA forfeit an opportunity to influence programs that may not be perfectly in keeping with its principles?

But so great was the accumulated frustration with the government's Medicare policies that the overriding sentiment of the house was one of “enough is enough.”

“If we don't stand for our principles, we don't stand for anything,” said Chester Danehower, M.D., expressing the sense of the house. “The integrity of this organization is at stake.”

The principles that delegates voted to reiterate were approved at the June House of Delegates meeting:

In addition, delegates at the June meeting also approved much lengthier and detailed “guidelines” to govern the mechanisms of how P4P programs might work. Broad categories covered by the guidelines include quality of care, physician-patient relationship, physician participation, physician data and reporting, and program rewards (Psychiatric News, July 15).

And last month, in addition to reiterating the five principles, delegates resolved to continue advocating for repeal of the SGR component and urged the AMA to “develop public-education materials to teach patients and other stakeholders about the potential risks and liabilities of pay-for-performance programs” that are not consistent with AMA principles.

“Until we establish a practice environment where payment matches costs, it is not conceivable that pay for performance is going to work,” said AMA Trustee John Armstrong, M.D., during a press conference following the house meeting. “There is no point talking about value-based purchasing without fixing the payment formula.” ▪