Many of the 6,500 Current Procedural Terminology (CPT) codes need to be dropped, physician payment advocates say.


Sept. 27—As Medicare looks for ways to simplify physician pay requirements, industry leaders see opportunities and obstacles.

A proposed rule issued in July by the Centers for Medicare & Medicaid Services (CMS) sought to “start a national conversation about improving the healthcare delivery system,” including ways to eliminate or streamline reporting, monitoring, and documentation requirements and to simplify rules and policies for clinicians.

Potentially up for change are both the Medicare Physician Fee Schedule, which measures productivity, and the resource-based relative value scale (RBRVS), a scheme used to determine physician payment differences.

Physician organizations have provided a range of comments on the kinds of mostly incremental changes they think CMS should consider in overhauling its physician payment systems. But industry leaders warn that changes will be slow and difficult—even if consolidation trends indicate a need for fast improvements.

The implementation of alternative payment models (APMs) has provided a possible way to eventually move physicians into population-based payment, advocates at a Washington, D.C. health policy event said, but continued use of fee for service and RBRVS has heaped large and growing data-collection and reporting burdens on physicians.

“Primary care is really in trouble, and we need some relief right away,” said Alan Lazaroff, MD, a medical director for Physician Health Partners. “If it takes another 10 years to get to alternative payment models, there won’t be any primary care doctors left unless something is done in the interim.”

He urged replacement of the FFS system but acknowledged that the framework of a new system is not yet clear.

Mai Pham, MD, chief innovation officer for the Center for Medicare & Medicaid Innovation at CMS under President Obama, urged a balance between shifting completely to new APMs and overhauling the physician fee schedule.

FFS continues to be the best way to pay physicians in some circumstances—like cataract surgery—and Pham is wary of a wider effort to address FFS pricing distortions. Instead, she urged targeting “the highest-impact codes and then see where we are.”

“It gives us a little more breathing room to start adding those layers of [APMs] as a complement to—not necessarily as a replacement for—fee for service,” Pham said. Pham also suggested rebalancing the fee schedule as part of the effort to advance new APMs.  

Instead of overhauling the RBRVS, Simeon Schwartz, MD, CEO of Westmed Practice Partners, urged creation of voluntary alternative capitated models “as quickly as possible that allows [physicians] to have a different payment system.”

“I would figure out what the market price for a primary care physician is, understand what an appropriate panel size for those people is, understand the bucket of services they need to provide to those patients—with a lot of emphasis on coordination of care that was of course risk-adjusted,” Schwartz said.

Frank Opelka, MD, a medical director for the American College of Surgeons, noted that the limitations of the current payment system are a reason why more than 70 percent of surgeons are employees, according to a soon-be-released survey by his organization.

“They said that the complexity of practice is such that they are not getting to operate,” Opelka said. “They are managing rules, regulations, [electronic health records], the [Office of the National Coordinator for Health Information Technology], and all this other stuff, and they want to get back to patients.”

Opelka urged fixing the valuation flaws in RBRVS in a way that addresses patient needs instead of basing it on the amount of physician effort in a procedure.

While Lazaroff does not see himself as a FFS advocate, he questioned how possible it is to phase out an entire payment system in the short term.

“We’ve got to have something to replace FFS that we’re confident will work, and I don’t believe we’re there yet,” Lazaroff said.

Code Simplification

CMS uses 6,500 separate CPT codes but only 16 to capture the cognitive portion of a physician’s job, noted Robert Berenson, MD, a fellow at the Urban Institute.

Berenson noted that some have urged expanding evaluation and management (E/M) coding to provide the same degree of “nuance” found in procedural codes. But others prefer that such effort be poured into developing better APMs.

Lazaroff urged fewer overall codes and more E/M codes to better compensate for that that type of care.

Pham, meanwhile, urged against generating new codes.

“I would rather a find a way to grossly bring that number—6,500 procedure codes—down to something like 100 procedural families,” Pham said.

Alternatively, CMS could drop all documentation requirements if physicians take on downside financial risk for their patients.

“What do I care?  It’s your dollars if you’re taking that accountability,” Pham said. “If complexity is what is driving the independent practices into the arms of larger institutions, let’s remove some of that complexity.”

The accelerating pace of healthcare technological innovation, she said, makes it impossible for coding changes to keep up at such a slow rate.

Alternatively, CMS could use a single primary care code and employ retrospective analytics to determine acuity and intensity of visits, then adjust payments at the end of the year, Schwartz said.

“If APMs—which are my preferred model—fail, we may need some alternative mechanism for primary care,” Schwartz said.

More worth the effort, Opelka said, would be a system of 1,200 code groups compressed into specialty-based “clinical affinity groups.” These would include sub-episodes and could be rolled into a population health-based payment system.

“I would rather be linking this closer and closer to the clinical environment in which we live,” Opelka said.

APM Shift

Some industry analysts have warned that even a wholesale shift to APMs will not mark the end of FFS because those models rely on FFS to determine base physician compensation.

Grace Terrell, MD, a member of the Physician-Focused Payment Model Technical Advisory Committee, which is reviewing new APMs for CMS, said APMs could function without a FFS system.

“If you have community-based payments, for which there are various types of components out there, you may well be able to fit all [payment specifics] in,” Terrell said.

For example, a health system operating in an APM could contract with an oncology medical home to provide certain services without FFS, she said.

“A bundled payment in and of itself would just be a component of the larger healthcare needs of the population,” Terrell said.

Pham said the payment system needs to “knit together deliberately.”

“If you sprinkle oncology medical homes in a market and a few [accountable care organizations] layered around there, it’s not like your work is done,” Pham said. “You actually have to knit those things together so that everyone is playing to the same total-cost-of-care goal.”


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Wednesday, September 27, 2017