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A joint letter to Capitol Hill on Medicare payment updates and quality improvment

Today, the American Academy of Family Physicians, American Academy of Pediatrics, American College of Obstetricians and Gynecologists, and the American College of Physicians sent a letter to Senate Majority Leader Bill Frist and other Senate and House leaders and members of the Finance, HELP, Ways and Means, and Energy and Commerce Committees to offer support and assistance in developing legislation to improve the quality of health care under Medicare, Medicaid and other federal health programs.

The full letter and key features of legislation that are supported follows. If you would like further details, please contact:

Robert B. Doherty
Senior Vice President
Governmental Affairs and Public Policy
American College of Physicians
202-997-0334
rdoherty@acponline.org

Lindsay Shannon
Public Relations Specialist
American Academy of Family Physicians
913-906-6000 ext. 5222
lshannon@aafp.org

June 21, 2005

The Honorable Bill Frist
Senate Majority Leader
United States Senate
Washington, DC 20515

Dear Senator Frist:

The American Academy of Family Physicians, American Academy of Pediatrics, American College of Obstetricians and Gynecologists, and the American College of Physicians are writing to offer our support and assistance in developing legislation to improve the quality of health care under Medicare, Medicaid and other federal health programs. Collectively, we represent over 300,000 physicians and medical students.

We believe that the medical profession has a professional and ethical responsibility to engage in activities to continuously improve the quality of care provided to patients. The Institute of Medicine's landmark report, Crossing the Quality Chasm, documented significant gaps in health care quality and issued a challenge to the profession to work collaboratively to improve quality, safety and access. Our organizations accept this challenge and believe that Congress can play a critical role by enacting legislation to provide incentives to support quality improvements.

Specifically, we would support legislation that includes the following key features:

  • All physicians would receive positive Medicare payment updates, reversing cuts that would otherwise occur under the sustainable growth rate (SGR) formula. Such positive updates would be the floor for Medicare payment updates, with additional dollars being made available above the floor to support quality improvement.

  • Physicians would receive additional payments for participating in performance measurement and reporting programs. Such programs would be phased in over several years, starting with physicians reporting that they have acquired health information technology and other structural capabilities to support quality improvement. Later, physicians would receive additional payments for participating in programs that use evidence-based clinical performance measures.

  • Because participation in performance measurement involves substantial costs (for health information technology, data collection and reporting) and time commitment from physicians' and their staffs, pay should increase proportionately based on the number of dimensions of care being measured, by the time and costs associated with documenting performance, and the level of health information technology acquired by the practice to support quality improvement. A graduated payment structure would create stronger incentives for physicians to participate in performance improvement programs (and for specialties to develop evidence-based measures) than paying all physicians the same amount regardless of their level of commitment to quality improvement.

  • Clinical performance measures must be validated through a multi-stakeholder process that considers the scientific evidence behind the measure, administrative feasibility of data collection, and other elements. All measures must be fully transparent. The National Quality Forum and the Ambulatory Care Quality Alliance should be referenced as acceptable processes for selecting measures.

  • Physicians must not be penalized under the SGR for volume increases that may occur due to compliance with performance measures.

  • HHS should be directed to develop a methodology, in consultation with the Medicare Payment Advisory Commission (MedPAC), the Practicing Physician Advisory Council, and national membership organizations representing practicing physicians (e.g. the American Academy of Family Physicians, American Academy of Pediatrics, American College of Obstetricians and Gynecologists, and the American College of Physicians), to allow for physicians to receive additional payments for achieving system-wide Medicare savings (including savings in Medicare Part A, such as from preventing unnecessary hospitalizations caused by complications) that can be attributable to individual physicians or physician group practices participating in performance measurement and improvement programs and physician-guided chronic care coordination.

  • Although we would prefer that Congress provide additional (new) money to fund the pay-for-quality program, we can support, as a starting point, the recommendation from MedPAC that an initial pay-for-quality program be funded by setting aside a portion of the recommended inflation updates for 2006 and 2007.

We recognize the challenges in creating a quality improvement program for Medicare and other health programs and the concerns that many physicians have about potential unintended adverse consequences from pay-for-performance. However, we believe that these concerns and challenges can be overcome if the medical profession engages constructively with the federal government by providing our expertise and perspectives. We offer you our commitment to achieving this goal.

Sincerely,

American Academy of Family Physicians
American Academy of Pediatrics
American College of Obstetricians and Gynecologists
American College of Physicians

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