AMERICAN MEDICAL ASSOCIATION HOUSE OF DELEGATES
Resolution: 220
(A-05)
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Introduced by:
American Association of Neurological Surgeons
American Academy of Orthopaedic Surgeons
American Society of Cataract and Refractive Surgery
American Urological Association
Congress of Neurological Surgeons
Subject:
Medicare’s Sustainable Growth Rate Formula and Pay-for-Performance
Referred to:
Reference Committee B
(Richard M. Peer, MD, Chair)
Whereas, Beginning in 2006 through 2013 Medicare payments to physicians are expected to
decrease by approximately 30 percent due to the currently flawed Sustainable Growth Rate (SGR)
system; and
Whereas, The Medicare Payment Advisory Commission (MedPAC) has previously recommended
that Congress repeal the current SGR formula and replace it with a system that uses the Medicare
Economic Index (MEI), which better reflects the true costs of providing physician services to
Medicare beneficiaries; and
Whereas, The US Congress and the Centers for Medicare and Medicaid Services (CMS) are
considering mandating that physicians be paid under a so-called Pay-for-Performance, or P4P,
system that aims to pay physicians based on whether or not they meet certain “quality” performance
measures; and
Whereas, MedPAC has recommended that the P4P system be implemented in a budget neutral
manner by initially withholding 1-2 percent of Medicare payments from all physicians and
redistributing these funds to only those physicians that meet certain performance measures, which
have not yet been established nor truly evaluated as to whether they actually lead to quality
improvement; and
Whereas, To date, there are few established quality measures that apply to all physicians, and of the
measures that do currently exist, they generally relate only to those physicians providing primary
care and chronic disease management; and
Whereas, Not all specialties are able to identify a single procedure or illness that all physicians or
surgeons perform or treat such that all physicians could be equally eligible for P4P “bonus”
payments; and
Whereas, There are significant costs associated with implementing P4P programs, requiring
physicians to expend additional monies to cover these new practice expenses, and not all
physicians, particularly the vast majority in solo, small and/or rural practices will be able to afford
these added costs; and
Whereas, CMS just launched several demonstration projects to further evaluate the application of
P4P to physicians, but these pilot projects are not expected to be completed for several years so the
“jury is still out” on whether or not certain P4P programs will be workable; and
Whereas, Many medical specialty societies have just begun the process of determining how best to
establish quality measurements that are applicable to their own specialty and therefore will not be
ready to fully participate in a Medicare P4P program for at least several years; and
Resolution: 220 (A-05)
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Whereas, There are many unanswered questions about how P4P data will be collected, such as:
Will physicians need to obtain patient approval prior to submitting data to satisfy Health Insurance
Portability and Accountability Act regulations? Will the data remain confidential and not subject
physicians to additional legal exposure? How will the data be audited and verified? Will such an
audit process expose physicians to increased risk of fraud and abuse investigations? Will the data
be appropriately risk adjusted?; and
Whereas, Current P4P projects have in fact demonstrated that these programs actually increase
utilization (and therefore Medicare outlays), thereby under the current SGR formula physicians may
be punished for exceeding expenditure targets, further exacerbating the current projected future
cuts; and
Whereas, All physicians continually strive to offer the highest quality care to all Medicare
beneficiaries, but with physicians facing 30 percent reductions in reimbursement, compounded by
exorbitant medical liability premium increases, many physicians are stretched to the limit and are
reconsidering their Medicare participation status, which will cause access to care problems for
Medicare beneficiaries; therefore be it
RESOLVED, That our American Medical Association continue to actively lobby Congress and the
Administration to (a) eliminate Medicare-covered outpatient drugs and other incident-to services
from the physician expenditure target both retroactively and in the future; and (b) repeal the current
Sustainable Growth Rate (SGR) formula, replacing it with a system (such as the MEI) that is more
predictable and recognizes the true costs of providing services to Medicare beneficiaries (Directive
to Take Action); and be it further
RESOLVED, That our AMA oppose any congressional or Centers for Medicare and Medicaid
Services Pay-for-Performance initiative unless it meets, at a minimum, all of the following
requirements: (a) the program is designed to truly improve quality of care; (b) performance
measurements must be established by practicing physicians and/or their specialty societies with
expertise in the area of care in question and be based on scientifically derived criteria; (c) prior to
implementation, the program must be fully and successfully pilot tested in a variety of practice
settings and across all medical specialties; (d) if successfully pilot tested, the program must be
phased-in over an appropriate period of time to enable participation by all physicians in all
specialties; (e) the program should be applicable to all physicians who wish to participate and not
favor one specialty over another; (f) collecting and reporting data must be reliable and easy for
physicians and should not create significant financial and other burdens on physicians and/or their
practices; (g) performance measures must be kept current and reflect changes in clinical practice;
(h) a non-punitive audit system should be implemented to ensure the accuracy of data; (i)
performance measures must be risk adjusted for patient demographics, severity of illness, and
comorbidities; and (j) individual physician quality performance information and data must remain
confidential and not be subject to discovery in legal or other proceedings (e.g., credentialing,
licensure, and certification) evaluating whether or not a physician has met standards of care (New
HOD Policy); and be it further
RESOLVED, That our AMA oppose any legislation that implements a Medicare Pay-for-Performance
(P4P) program that applies to all physicians unless such legislation also includes a permanent “fix”
to the SGR system or such P4P legislation implements a voluntary program that includes new
money into the physician payment pool and does not merely redistribute money that already exists
in the Medicare Physician Payment system. (New HOD Policy)
Fiscal Note: Lobby accordingly at estimated staff cost of $9,294.
Received: 5/11/05