Insights

Partner Spotlight: Strengthen Medicare to Provide Better Health Care for Seniors

By: 
CAPG

Last week, the House Ways and Means and Senate Finance Committees each passed bipartisan legislation to repeal and replace Medicare’s flawed sustainable growth rate (SGR) formula.  Although the two legislative proposals contain substantive differences, the basic frameworks are aligned.  Both would provide greater financial incentives for physician organizations to accept payment for defined populations and for physicians to assume financial risk for treating those populations.  Physicians would have new incentives to practice medicine within a defined budget, with requirements for meeting quality performance standards and providing preventive and primary care.  CAPG commends the Committees on their efforts to move fee-for-service medicine in this direction.  Decades of experience tell us that this type of model improves patient care and CAPG and its members are excited to see the fee-for-service system begin a journey in this direction.

While CAPG is pleased with these developments and looks forward to working with Congress to ensure that this model is ultimately adopted in the fee-for-service space, CAPG also encourages Congress to pay greater attention to Medicare Advantage.   As CAPG Board Member, Dr. Robert Margolis, recently testified before Congress, Medicare Advantage is already doing the work Congress seeks to create in Part B. 

In Medicare Advantage, CMS pays the health plan a capitated or global payment for specific Medicare beneficiaries.  In some cases, like for CAPG member physician organizations, the health plan then makes a capitated payment to a physician organization for a narrower group of patients.  In essence, the health plan provides a defined budget for the physician organization to treat a defined population.  Contrast this with fee-for-service, where physicians are paid for every service provided without an eye toward quality, coordination, prevention, or site of care.  In the population-based payment model there are robust incentives to ensure that high quality health care and preventive services are offered to keep the population healthy.  As Dr. Margolis testified, patients experience tremendous benefits flowing from this model – lower rates of preventable readmissions, lower hospitalization rates, more preventive services.

However, the Medicare Advantage program is under substantial pressure.  Cuts from a variety of past legislative and regulatory actions have sliced deeply into the program, placing at jeopardy all of the care coordination systems that have been put in place.  CAPG is deeply concerned that Medicare Advantage will become a target for additional cuts as Congress works to pay-for other policy priority areas such as SGR repeal and deficit reduction.  CAPG urges lawmakers to consider the effects of blunt cuts to the Medicare Advantage program on the broader health care delivery system.

CAPG encourages policymakers to consider and adopt policies that encourage more physician group capitated contracts in Medicare Advantage and two-sided risk models in Medicare Part B.  Our experience has shown that this model provides the greatest benefit to seniors.  CAPG looks forward to continuing to work with Congress to drive the delivery system toward a coordinated care model.

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Date: 
Monday, December 16, 2013