Some Doctors, Patients Balk At Medicare’s ‘Flat Fee’ Payment Proposal

The Trump administration announced a plan Friday that will affect about 40 percent of the payments physicians receive from Medicare. Not everybody’s pleased.

The Centers for Medicare & Medicaid Services calls its proposed plan a historic effort to lessen paperwork and improve patient care. But some doctors and advocates for patients fear maybe it's a disaster.

The CMS plan, published in Friday’s Federal Register, has become open for public comment until early September. It would combine four levels of paperwork necessary for reimbursement, and 4 levels of payments, into one form and something flat rate for each doctor’s appointment (although there would be separate filing systems for brand new and established patients).

In a letter previewing the program to doctors earlier this month, CMS Administrator Seema Verma asserted physicians waste a lot of time on mindless administrative tasks that take some time away from patients.

“We feel you should be in a position to concentrate on delivering choose to patients,” Verma wrote, “not near a pc screen.”

Initially, that sounded pretty good to Dr. Angus Worthing, a rheumatologist in Washington, D.C. He then tested the claim with his own analysis.

During an average 15- to 45-minute appointment having a patient, Worthing figured, “I would spend one to two minutes less in front of the computer, documenting and typing.”

Dr. Kate Goodrich, CMS’ chief medical officer, noted that “saving one or two minutes per patient accumulates pretty quickly over time.”

But Worthing said the little savings over time is not worth the reduced payment he’d get. The CMS plan would provide a flat fee for each office visit with a patient, whether the doctor is really a primary care physician or perhaps a specialist.

Rheumatologists, in general, could expect a 3 % reduction in Medicare’s reimbursement because they typically see and bill for more complicated patients, said Worthing, who chairs the federal government affairs committee for that American College of Rheumatology.

And he noted that his personal net income from Medicare patients would drop even more – by about 10 %. That’s because 70 percent of his costs – for rent, payroll along with other expenses – are fixed or rising.

Worthing is leading efforts by rheumatologists to influence CMS to regulate its funding formula before the plan goes into effect in January.

“The proposal is well-intentioned however it might cause a disaster,” he explained, whether it results in fewer medical students going into rheumatology along with other specialties that need doctors to handle complex patients. And physicians might stop taking Medicare patients altogether, or avoid individuals with harder problems.

Al Norman, a 71-year-old Medicare patient, said he can observe that disaster coming.

“If you’re frail or if you are extremely healthy, you’re well worth the same to a doctor [under the proposed plan], and clearly that means that those who are more disabled or frail are less desirable patients,” said Norman, who done elder care issues in Massachusetts before retiring last year.

Many doctors predict that the proposed payment changes would set up a financial incentive to see fewer Medicare patients. Goodrich, the Medicare official, disagrees.

“That’s an unintended consequence we wanted to mitigate around the front-end and steer clear of,” Goodrich said. Under the proposed system, doctors who need additional time with patients could file for an “add-on” payment of $67 per appointment. That will require a small amount of additional documentation, she admitted, but would still reduce a doctor’s keyboard time, according to CMS estimates.

This “add-on” payment is “meant to ensure that physicians are being appropriately paid for seeing the most complex patients,” Goodrich said.

Still, critics of the plan say there are more unintended consequences CMS may not have anticipated.

Dr. Paul Birnbaum, who has been practicing dermatology in the Boston position for 32 years, said he’s worried that paying doctors a reduced fee per appointment would mean plenty of short visits.

“You'd just see more people,” Birnbaum said. “You’d move people through faster. Which means you have somebody return for repeat office visits. And that, over time, would be inflationary.”

More frequent trips to the doctor means more copays for patients and better costs for Medicare, he explained.

The Trump administration isn't suggesting the payment changes would save Medicare money. In her own letter to doctors, Verma said some physicians would see their Medicare payments increase.

And it’s not just doctors who treat elderly patients who are likely to be affected. When the Medicare payment changes work, private insurers might follow suit, partly because it’s easier for all insurers to use common billing procedures.

Theoretically, obstetrician-gynecologists would be one of the biggest winners; they treat fewer complex Medicare patients. Still, many OB-GYNs are worried concerning the coming changes, too.

“You will see winners and losers, and my real fear is it’s not the physicians [who will forfeit the most]. My real fear is the fact that it’s the Medicare beneficiaries,” said Dr. Barbara Levy, v . p . for health policy in the American College of Obstetricians and Gynecologists.

Some Medicare advocates are urging CMS to postpone these changes and consider a trial run.

“If we’re likely to discuss this sort of wholesale, large-scale reconfiguration of how reimbursement is given to doctors,” said Joe Baker, president from the Medicare Rights Center, “it’s probably best to do that inside a demonstration project where we can closely study the ramifications.”

CMS hopes to enact any changes to Medicare fee schedules on Jan. 1, 2021.

The main challenge remains convincing patients and physicians that the changes count doing in the first place.