Legislative: Reform on the horizon: Shifting support toward primary care physicians could hurt specialists

Key Points

As we reported last month, Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, has developed a white paper that will likely be used as a roadmap for whatever reform bill emerges from Congress, and his stated predilection for increasing support to primary care was clearly stated in that document.

"Primary care is the keystone of a high-performing healthcare system," Sen. Baucus wrote. "Access to primary care that successfully manages and coordinates patient care, particularly for the chronically ill, is a proven determinant of high-quality, cost-effective care. Yet, America's current system undervalues primary care relative to specialty care," leading to fewer medical students choosing primary care careers.

The document states, the "overvaluation of procedures in the Medicare physician fee schedule has created financial incentives to provide unnecessary services and served as a disincentive for physicians to become primary care physicians.

"To avoid cost inflation, this proposal should be made budget-neutral," Sen.Baucus contends, saying that any increase to primary care providers "requires a corresponding cut to specialty services."

Sen. Baucus' document preceded a recommendation in December by the Medicare Payment Advisory Commission (MedPAC) staff that the commission should urge Congress to implement a 1.1 percent increase in physician payment rates in 2010, rather than the 21 percent decrease that would be required under the current sustainable growth rate (SGR) formula.

Sounds like good news, but MedPAC also indicated it will recommend that primary care physicians receive a larger increase, which could come at the expense of specialists.

The danger here for specialists, such as dermatologists, is that MedPAC proposes to pay for the recommendations by establishing a "budget-neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary care-focused practitioners."

To maintain budget neutrality, the proposal would take money from specialty services.