ACP: Governmental Affairs and Public Policy - Issues Relating to Implementation of Value-Based Purchasing

Advocacy

Issues Relating to Implementation of Value-Based Purchasing

July 27, 2005

The American College of Physicians supports Chairman Johnson's Value Based Purchasing Act of 2005. As the legislation makes its way through the legislative process, there are several issues relating to implementation of the program to be established by the legislation that merit further direction and clarification from Congress rather than relying on Secretarial discretion:

Implementation of Measures

We are pleased that the bill stipulates that quality and efficiency measures should not create incentives for patient selection or deselection, should take into account differences in individual health status, and use appropriate statistical techniques to ensure valued results. By requiring the Secretary to consider such issues only "to the extent feasible and practicable", however, there is a risk that the Secretary will not include sufficient safeguards. We also believe that all measures, including efficiency measures, must be evidence-based. The Secretary should be required to issue, in the form of a notice of proposed rule-making, the specific steps taken to assure that the measures themselves take into account differences in health status, compliance with orders, not directly or indirectly encourage patient selection or deselection, and appropriate statistical techniques to ensure valid results, with an explanation of any adjustments that are not made on the basis of practicability or feasibility.

Safeguards for Public Reporting

Studies show that public reporting can result in physicians avoiding higher risk or non-compliant patients that will result in their public reports being less favorable. It is a particular challenge to determine the impact of certain ethnic, racial, socioeconomic or cultural factors that studies have shown make patients less compliant with recommended treatments, less likely to see a physician for preventive care, and less likely to take prescribed medications.

To reduce the risk that public reporting will create such unintended consequences, ACP would like to work with Congress on adding safeguards to the public reporting requirements as the bill makes its way through the legislative process to provide additional safeguards for patients. In addition, safeguards should apply not only to the measures themselves, but to the methodologies used for reporting quality data based on the measures to the public. We recommend that Congress provide additional direction to the Secretary on developing additional patient safeguards before public reporting is implemented. The Secretary should specifically be directed to report to Congress on methodologies for public reporting that address issues relating to functional health illiteracy, cultural sensitivity, impact on health disparities and patients who are likely to be less compliant due to socioeconomic, racial, ethnic or cultural factors. The Secretary should be directed to consult with the Medicare Payment Advisory Commission (MedPAC), the Practicing Physician Advisory Council (PPAC), national membership organizations representing practicing physicians and other appropriate experts on such methodologies, The recommended methodologies should be reported to Congress by December 30, 2007--at least one year prior to the effective date of public reporting.

Timing of Additional Payments for Performance Reporting and Improvement

The College would like a clarification on the correlation between the time period during which physicians meet the reporting and performance requirements and the period during which they would actually realize higher payments for doing so. If these are one in the same as appears to be the intent of the bill language, how will Medicare know, in early 2007 for example, that a particular group of physicians will comply with the reporting requirements throughout the year and should be paid at the higher rate for that year? We would be concerned if there is a substantial time lag between when physicians make the investment of resources in reporting and performance and when they will receive the additional reimbursement. We recommend that such issues be clarified in the legislative process rather than being left to the Secretary's discretion.

Providing Additional Payment Commensurate with Effort

We also recommend that Congress give HHS the authority and direction to weigh the performance-based payments so that those physicians who engage in reporting data using multiple measures can qualify for higher payments than those who report on only a few structural measures. For instance, an internist who participates in a program that uses the AQA starter set will be obligated to report performance for as many as 24 separate measures (the two measures relating to pediatric care are not applicable to most internists), requiring a substantial investment of time and practice resources. Unless performance-based payments are made commensurate with effort, physicians will be discouraged from doing anything more than the most elementary and basic measurement and reporting required to qualify for the full update. We hope to work with Congress on adding such direction as the bill makes its way through the legislative process.

Gainsharing Provisions

ACP also supports the bill's language that allows for gainsharing arrangements that will allow physicians to share in system-wide savings that result from their participation in quality improvement activities, such as reduced Part A expenses that may result from reductions in hospital admissions by preventing avoidable complications. In addition to the gain sharing arrangements, we also believe that the Secretary should be directed to develop a methodology, in consultation with the Medicare Payment Advisory Commission (MedPAC), the Practicing Physician Advisory Council (PPAC), national membership organizations representing practicing physicians and other appropriate experts to increase the total pay-for-quality bonus pool available to physicians based on evidence that the value-based purchasing program for physicians has resulted in system-wide Medicare savings. Such savings should include savings in Medicare Part A, such as from preventing unnecessary hospitalizations caused by complications. The methodology and recommendations should be reported to Congress no later than December 30, 2006.