Talking to CMS about Pay Parity

Paying doctors the same amount for the same services regardless of where those services are performed has long been a goal for AID. Payment parity would help level the playing field. If independent doctors received the same reimbursements as hospital-employed doctors for the same services, fewer would be lured into employment, and hospitals might curb their appetites for buying medical groups.

The Centers for Medicare and Medicaid Services share this goal. AID Executive Director Marni Jameson Carey met with an officer form CMS in Washington DC last month to discuss the issue of site-neutrality further.

Among Carey's questions was this one: Since 2012, the Medicare Payment Advisory Commission has recommended site neutrality. In their advisory reports, the commission has found that if Medicare paid hospitals the same rate that it paid independent doctors for 66 categories, Americans would save nearly $1 billion a year.

A study released last week by Physician Advocacy Institute found that the increase in employed physicians was the leading driver in soaring Medicare costs. Between 2012 and 2015 cost for four health-care services rose $3.1 billion due primarily to the 49 percent uptick in hospital-employed doctors, according the study reported in Becker's.

So why doesn't Medicare follow the commission's recommendations? Because MedPAC advises Congress, not CMS, and also because of the way the laws are written. Full parity would require a legislative act. So how do we get Congress to act?

A glimmer of hope

In a recent editorial, CMS Administrator Seema Verma encouraged clinicians, patients and others interested in improving the system to make use of the Center for Medicare and Medicaid Innovation, which she called a powerful tool for reducing costs.

"Congress created the innovation center in 2010 to test new approaches or 'models' to pay for and deliver health care," Verma wrote.
The innovation center is asking for proposals to "test market-driven reforms" that benefit consumers. AID is considering submitting a proposal to take a closer look at site neutrality.

"We are analyzing all innovation center models to determine what is working and should continue, and what isn't and shouldn't," she said, adding that the center wants to hear from those on the front lines.

"The complexity of many of the current models might have encouraged consolidation within the health-care system, leading to fewer choices for patients. Strengthening Medicare and Medicaid will require health-care providers to compete for patients in a free and dynamic market, creating incentives to increase quality and reduce costs."

Please watch for the third part of the series for a recap of two meetings on the hill, which AID participated in remotely.