ACP: Governmental Affairs and Public Policy - ACP Supports the "Medicare Value-Based Purchasing for Physician Services Act of 2005," H.R. 3617

Advocacy

ACP Supports the "Medicare Value-Based Purchasing for Physician Services Act of 2005," H.R. 3617

July 27, 2005

Honorable Nancy L. Johnson
United States House of Representatives
Washington, DC 20515

Dear Chairman Johnson:

On behalf of the American College of Physicians (ACP) representing over 119,000 doctors of internal medicine and medical students, I congratulate you on the "Medicare Value-Based Purchasing for Physicians' Services Act of 2005." Based on a review of the draft bill, the legislation is consistent with the College's recommendations on key elements that should be included in any legislative framework for value-based purchasing, as previously shared with you in our July 21 testimony to the Ways and Means Committee's Subcommittee on Health and in a proposed legislative framework for pay-for-reporting that we shared with your staff in May. We are pleased to offer our support as we continue to work with you on refining and clarifying several issues relating to implementation of value-based purchasing as described in the attachment to this letter.

This bill would put in place a framework needed to support and strengthen the ability of physicians to engage in activities to improve the quality of the care they provide. At the same time, it would assure adequate funding for quality improvement activities by sunsetting the failed Sustainable Growth Rate (SGR) formula and linking future fee schedule updates to the Medicare Economic Index (MEI). By doing so, it recognizes that the SGR formula is fundamentally incompatible with continuous quality improvement. Successful implementation of Medicare quality improvement cannot take place in an environment where physician fees are being cut. We are pleased that the bill will establish the updates in 2007 and subsequent years at the level of the Medicare economic index; those who participate in the performance measurement and reporting program will receive the full update while those who are unable to do so will receive the MEI minus one percent. Based on projections of likely MEI updates in future years, the updates in your bill are consistent with ACP's recommendation that all physicians receive positive updates while allowing those who participate in the performance reporting and improvement program to receive additional reimbursement up to the level of the MEI. We are also pleased that all physicians would receive a positive update in 2006, although we continue to believe that it would be preferable to establish the 2006 update at the level of the MEI as recommended by the Medicare Payment Advisory Commission.

The bill also calls for a gradual phase-in of the measures, starting with pay-for-reporting of structural and quality measures before Medicare begins paying physicians on the measures themselves, similar to the step-wise approach recommended by ACP.

We are also pleased that the proposal recognizes the critical role played by medical specialty societies in developing measures that are then validated through a consensus building organization involving multiple stakeholders. The College's experience with the National Quality Forum and the Ambulatory Care Quality Alliance (AQA) demonstrates that a consensus process, with physician leadership, can result in getting "buy-in" from physicians, purchasers, payers, and consumers on a practical set of measures.

The bill would require public reporting based on measures of performance beginning in 2009. ACP appreciates the potential benefit that public reporting can have for patients by providing them with a more informed choice about physicians. We hope to work with you on assuring that any public reporting program is designed to reduce the risk of potential unintended consequences. The attachment provides recommendations on additional direction that should be given to the Secretary on developing methodologies for public reporting.

In summary, Chairman Johnson, we support the legislation. ACP commends you for your leadership on this issue and your consideration of the views offered by the College and other medical organizations on how it should be structured. We are confident that as the bill makes its way through the legislative process, we will have an opportunity to work with you on clarifying issues relating to safeguards for public reporting, discretion given to the Secretary on the implementation of measures, the timing of the additional payments to physicians who participate in the performance reporting and improvement programs, and providing additional payments commensurate with effort as described in the attachment. ACP looks forward to working with you to assure that the bill receives the prompt and favorable consideration it deserves.

Sincerely,

C. Anderson Hedberg, MD
President