AMA's Pay-for-Performance Initiative Troubles APA

The AMA has told Congressional leaders that by the end of 2007 physician groups will have developed performance measures to cover a majority of Medicare spending on physician services.

The AMA further agreed that by the end of 2007 physicians would voluntarily report on at least three to five quality measures. By the end of this year, the AMA agreed to develop a total of 140 performance measures covering 34 clinical areas.

The agreement was signed in December 2005, by AMA Board Chair Duane Cody, M.D.; Sen. Charles Grassley (R-Iowa), chair of the Senate Finance Committee; Rep. Nathan Deal (R-Ga.), chair of the Subcommittee on Health of the House Committee on Energy and Commerce; and Rep. Bill Thomas (R-Calif.), chair of the House Ways and Means Committee.

The agreement appears to have been signed in return for a freeze on physician payment cuts under Medicare at the 2005 level as part of the 2006 budget reconciliation bill approved by Congress in February and the removal of language calling for “pay for performance.” That freeze averted a 4.4 percent across-the-board payment cut for physicians.

When the budget bill was approved halting the pay cut, AMA President J. Edward Hill, M.D., issued a familiar statement about the need for a permanent fix to the physician payment formula for Medicare.

“By freezing payments at 2005 rates, Congress has stopped the 2006 cut of 4.4 percent, which the Medicare trustees predict is the harbinger of six straight years of physician payment cuts totaling 26 percent,” Hill said. “With six years of cuts still scheduled to come as practice costs continue to rise, we fear more physicians will make difficult practice decisions about treating Medicare patients.

“While congressional action halts the current cut, the AMA will continue to advocate for a fair physician payment formula based on practice costs. The current payment formula is tied to the ups and downs of the U.S. economy—not the growing health care needs of America's seniors.”

But the December agreement with congressional leaders appears to have surprised medical specialty groups, including APA, which say they were not made aware of the agreement until well after the ink was dry.

“I have communicated my regret and concern to the AMA leadership that the AMA chose not to alert the elected leaders or senior staff of its member specialties before the Hill agreement was reached, and then allowed additional time to pass before acknowledging the agreement and providing background information,” said APA President Steven Sharfstein, M.D.

“While I believe the lack of notice was an error in judgment, it is important to balance the process with the substantive issues,” he said.“ All year, the AMA, with the strongest support of all of medicine including APA, sought to achieve two key objectives—first, to block the 4.4 percent reduction in the Medicare payment update formula, and second, to eliminate pay-for-performance language included in the Senate-passed budget bill. APA, along with the rest of medicine, strongly supported and lobbied for both of these important objectives.

“The budget process was far from ideal, offering everyone unpalatable choices,” Sharfstein continued. “With painful cuts impacting everyone from the disabled to the elderly to Medicaid recipients, it is not surprising that Congress demanded that the AMA share some of the burden in return for the elimination of a Medicare payment cut that effectively restored billions in payments to physicians, along with unacceptable language on pay for performance.”

The APA president added that the agreement essentially commits the AMA to a process it had already begun with its Physician Consortium for Performance Improvement (PCPI), which has developed some 90 voluntary performance measures. Sharfstein said those measures “reflect clinical expertise by specialties and are focused on meaningful improvements in patient care, as opposed to the measures that would otherwise be developed by organizations focused mostly on controlling payments.”

The December 16 “Joint House-Senate Working Agreement With the AMA” specifically commits the AMA to the following:

In an interview with Psychiatric News, psychiatrist John Oldham, M.D., APA's representative to the PCPI, said the consortium has endeavored to develop “performance measures that are the kind we think ought to be done—performance measures by physicians and for physicians.”

Among the 90 measures the PCPI has developed is one on major depression. And Oldham said a companion measure on depression in children and adolescents is in the works. The performance measures so far developed by the PCPI can be accessed online at<www.physicianconsortium.org>.

Of the 65 national medical organizations active in the consortium, APA is one of six major groups that will form a PCPI executive committee, which will be making decisions about which performance measures will be developed in the future. (The other groups are the American College of Physicians, American Academy of Family Physicians, American College of Surgeons, American Academy of Pediatrics, and American College of Obstetrician-Gynecologists).

Oldham said the consortium was looking to areas of clinical care where there were significant national costs. He also said he is lobbying the group to include substance abuse among those.

“It's a huge financial burden, though it is somewhat hidden because it is a secondary complication of so many things,” Oldham said. “I have steadily encouraged the consortium to consider substance abuse as the next area of performance measurement in behavioral health that needs to be done.”

Information on the AMA's Physician Consortium for Performance Improvement is posted at<www.ama-assn.org/ama/b/category/3377.html>.▪