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Primary Care Bonus Payments Start Small But Should Grow, ACP Says

Committee and staff members looking into change in Medicare's calculation method

Medicare's first batch of primary care bonus payments prompted surprise among many recipients, who'd expected checks for larger amounts.

That's partly because the first checks don't reflect Medicare claims for a full quarter, explained Bob Doherty, senior vice president of governmental affairs and public policy for the American College of Physicians. And it's partly because of the way in which the bonuses are being calculated.

Established as part of the Affordable Care Act, the bonuses allow primary care physicians to receive a 10 percent bump in pay for certain primary care services from 2011 to 2015.

Payments are calculated quarterly. But because there's a lag time in processing Medicare claims, the first checks probably reflect claims from January, February and perhaps a portion of March but not the entire month, Doherty said.

Physicians will get credit for claims not processed in time, he said, and second-quarter payments should be larger because they will include a full three months of claims.

"The first quarter is not representative of what they're going to get in subsequent quarters," Doherty said. "During the next three quarters, they should see substantially bigger checks."

Another reason payments may be smaller than anticipated is that the Centers for Medicare and Medicaid Services is basing the bonuses on the amount that Medicare actually reimbursed physicians for services, not on the total allowable charges set by the Medicare fee schedule.

That means Medicare Part B beneficiaries' $162 deductible and 20 percent co-payment don't count toward the bonus. Because many seniors will meet their deductible during the first quarter, that issue should diminish somewhat in subsequent quarters, Doherty said.

Still, the calculation method came as a surprise to some physicians, and ACP is mulling whether to take action on it, he said.

The College's Medical Practice and Quality Committee, which deals with Medicare payment issues, plans to discuss the bonus payments at its May 22 meeting.

"They will review what the proposed rule said and what the final rule said to see if there are any grounds to challenge CMS's interpretation of the rule and the calculation of the bonuses," Doherty said.

ACP staff members also plan to confer with other primary care organizations, including the American Academy of Family Physicians and the American Osteopathic Association.

Regardless of the outcome, Doherty said, it's worth remembering that the primary care bonus is still an important step toward more properly valuing primary care services.

"We understand that internists have dealt with the fact their specialty has been undervalued for so many years compared to other specialties, so there is an understandable degree of frustration and disappointment," he said. "But on the other hand, in a tight budget environment where Congress is looking at cutting programs left and right, the fact that we were able to get into the law a fairly substantial bonus is still a very positive step."

To qualify for the bonus, a physician must be self-designated in a primary care specialty, including general internal medicine, family practice, pediatrics or geriatrics. Also, 60 percent of the physician's Medicare billings must be for the designated primary care services.

During development of the federal rule on the bonuses, ACP succeeded in making sure that more internists would qualify for bonuses by excluding certain services from the 60 percent calculation, including observation care services, inpatient hospital care services, hospital discharge services, same-date observation or hospital admission and discharge services and emergency department services.

In doing so, that boosted the number of general internists who would qualify for the 10 percent bonus to about 60 percent, according to CMS estimates. The percent of office-based internists who qualify for bonuses is probably even higher, according to ACP.

Doherty added that ACP's efforts to improve payments to the nation's internists isn't limited to the bonus.

The College also advocated for another provision in the health-reform law that will raise Medicaid payments for primary care to no less than the level of Medicare payments starting in 2013.

Also, new models of primary care -- including the patient-centered medical home and accountable care organizations -- may fundamentally alter how primary care doctors are paid.

"They have the greatest potential to result in a greater recognition of the value of the service our members provide," Doherty said.

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