Renal physicians Association and the SGR Essays

Renal physicians Association and the SGR Essays Renal physicians Association and the SGR Essay Renal physicians Association and the SGR Essay The present formula for updating the payment for services of physicians is called as the sustainable growth rate. However the very conceptual bias of this particular system is defective. The SGR was created in reaction to the Reform act and the   Balanced budget of 1997.The Congress   came in to establish the fee schedule as one part of Omnibus Budget Reconciliation Act of 1989 (OBRA89). This was made to control the bias of inflation existing as a result of the CPR method, rectify distortions in payment module, as well as allow the lead to a yearly update of the payment rates of the fees schedule. This lead to the legislation of a formula which was based on the attainment of the expenditure target. As per the SGR formula the expenditure target is not influenced by the historical volume growth of the earlier formulas. It is founded on the actual GDP per capita as well as various other factors like alterations in spending due to laws and regulations, increase in physicians practice cost. (Stabenow Debbie, September 13, 2006, HIMSS Reports: Senator Stabenow Introduces SGR Formula Fix) The RPA came into being in 1973. It is a national medical specialty association where the members are licensed nephrologists of US, the healthcare providers who are in the subspecialty area of internal medicine as well as those in teaching, medicine, research of renal diseases and disorders The basic and core values of the RPA is to enhance professionalism, ensure that there is greater equality in compensation, provide efficient and ethical advanced renal care as well as to promote leadership. The annual membership dues vary from $375 to $0 depending on the membership category. The RPA is committed towards providing high quality service to renal patients and follows the ESRD Patient Safety Initiative, Clinical Practice Guidelines, provides Clinical Performance Measures and incorporates quality improvement tools. According to the payment module it may seem that RPA is concerned for the advancement of its members however the RPA has shown consistent concern for providing quality servic e to kidney patients. (RPA, 2006, About RPA: RPA,the Advocate for Excellence in Nephrology Practice) According to the Political action Committee (PAC) of the Renal Physician Association the Sustainable growth rate (SGR) approach is impregnated by three basic problems. Firstly it results in severing the connection between the payment and cost of producing services. By utilizing this particular formula updates are produced which completely dissociated from the various factors that influence the changes including the cost involved in producing the services of physicians. If this is not dealt with urgently the updates provide a semblance of budget regulation but in the process they also produce a fee’s that will in the long term endanger the beneficiary’s access greatly. Thus the people including the physicians suffer ultimately. (Hackbarth M.Glenn, February 28, 2002, MedPAC recommendations on physician payment policy, Medicare Payment Advisory Commission) Secondly there is an inherently defective volume control mechanism brought into operation as a result of the SGR formula.   This is because sustainable growth rate is merely a national target and doesn’t act as an inducement for the physicians to engage in volume control. This type of formula only helps to project political milestones and has little social and economic significance. Reduction in fees does not necessarily lead to simultaneous and constant sluggish growth in volume. More ever it does not correspond to the increase in the volume of services and to the spending level, which continue to grow. (Hackbarth M.Glenn, February 28, 2002, MedPAC recommendations on physician payment policy, Medicare Payment Advisory Commission) This kind of formula propagates inequality because it doesn’t take into cognizance the regional distinctions with regard to individual volume which in turn will influence the behavior of the updates. As a result the SGR formula leads to the production of updates which may excessively low in some cases and excessively high in others. The Congress in the year 2004-2005 intervened in the Medicare Modernization Act (MMA) in a bid to prevent the various updates for negative payment in the same year due to the formula. But each time the Congress intervened to supersede the negative updates the formula mechanically has to decrease the updates in all future application in order to make up for the alteration. Thus it is predicted that yearly updates of 5% will continue o occur or a period of seven successive years. This series of projections can be characterized as unrealistically and impractically low. More ever in context of budget scoring these forecasts makes other substitutes of the SGR seem unrealistically and un-duly expensive. Hence any legislation on the SRG formula is of no consequence. Instead the PAC of the RPA recommends that a distinct course of action should be initiated. (Hackbarth M.Glenn, February 28, 2002, MedPAC recommendations on physician payment policy, Medicare Payment Advisory Commission) This course of action should incorporate the various explicit deliberations of objectives of the Medicare program.   The updates should consequently be annually considered so that the services of the physicians are appropriately paid for while at the same time the will ensure that the best quality of health care service remains accessible to the Medicare beneficiaries. Along with this the increase in the volume of the physician services can be taken care of directly. The growth in volume is distinct for different regions. The volume growth is actually dependent on the individual physician’s decision regarding his/her practice. The major question is that if all the care that is being provided actually required. According to certain studies and Dartmouth researches better quality of health care has no connection with greater volume of services. Volume growth cannot be controlled and regulated without addressing the actual causes. The SGR which endeavors to regulate volume by t he global payment alterations and by considering all physicians and services in the same parameter is not a good policy. (Hackbarth M.Glenn, February 28, 2002, MedPAC recommendations on physician payment policy, Medicare Payment Advisory Commission) The new system should be concerned with updating payment of the services of the physicians based on the evaluation of adequacy of payment. This should incorporate the projected changes occurring in the input prices on the next year.   This will be a small adjustment for growth in productivity with interaction of multiple factors. Further the updates will not be mechanically or automatically projected and will depict the real image. The various changes relating to the accessibility of beneficiary to the health care services, the aptness of increase in cost and other factors like the quality of services will be reflected in the updates. This will also commensurate with the other Medicare payment systems as well as help in the Legislatures in the various budgets making process. When the projections take the productivity into consideration the physicians are better able to provide high quality service. Once the payment rates are updated appropriately and the issue of adequate payment i s addressed the volume control (significant for both the beneficiary as well as taxpayers) can be addressed. From the perspective of the beneficiary an increase in the volume implies that there is greater cost made from the beneficiary pocket as well as greater cost of payment of supplemental coverage. From the perspective of the tax payers as well there is greater expenditure resulting from increase in volume. Increase in volume also affects the federal budget negatively. Certain volume growth like growth resulting from better technology may in fact be good for the patients. However not all growth is good and this is indicated by the variation in growth in various areas. The variation in certain services is very wide like in imaging and testing. It has been found that variation in volume in various regions is high in discretionary services like imaging and diagnostic testing. In areas where there is greater volume quality of service is found to be less. Volume has been found to dif fer from region to region. The best way to counter the volume problem without resorting to a formula is to adopt a multiple strategy policy. This will includes pre-authorization, profiling, beneficiary education, site inspection, coding edits, privileging and safety standards. At the same time Medicare payment can be linked to quality of service provided. This kind of payment will be budget neutral and will take care of both attainment as well as improvement. This will also help to alter the measurement of quality over time. Hence since higher volume is in no way connected with better quality. This type of action cause will not only ensure that beneficiary’s get better quality of service but also provides incentive for regulating the volume of services. (Hackbarth M.Glenn, February 28, 2002, MedPAC recommendations on physician payment policy, Medicare Payment Advisory Commission) The RPA recommends removal of the physician administered drugs from the ambit of SGR calculation and the inclusion of the entire charge of the new benefits as well as coverage decision within the SGR target. Further it recommends the inclusion of the effect of the alterations in law and regulation. For example the SGR does not consider the down stream services.