WASHINGTON — The government relies
too heavily on advice from the American
Medical Association in deciding how much to pay doctors under Medicare,
and the decisions may be biased because the doctors have potential conflicts of
interest, federal investigators say in a new report.
This reliance on the association,
combined with flaws in data collected by the influential doctors’ group, “could
result in inaccurate Medicare payment rates,” the investigators said.
The report, by the Government
Accountability Office, a nonpartisan arm of Congress, reveals new details of an
obscure process that distributes more than $70 billion a year to doctors
treating Medicare patients.
Medicare uses a fee schedule and
sets rates based on its estimate of the “relative value” of each service. For
example, by the government’s reckoning, a hip replacement operation involves
more than twice as much work as cataract
surgery and about 20 times as much as a routine office visit with an
established patient. In measuring work, the government takes account of a
doctor’s time and the amount of mental and physical effort and technical skill
required to perform a particular service, compared with other services.
Medicare’s decisions ripple
through the health care system and directly affect consumers. Medicare
beneficiaries often pay about 20 percent of the Medicare-approved charge for
doctors’ services. In addition, many private insurers use the Medicare fee
schedule as a guide in deciding how much to pay doctors. If Medicare overvalues
a particular service, it may create an incentive for doctors to provide more of
it, and vice versa.
Critics have complained for
several years about the unusual role of doctors in the setting of Medicare’s
rates. The report tends to validate some of the criticism.
The Government Accountability
Office said Medicare officials usually accepted the recommendations they
received from a committee of 31 doctors formed by the medical association and
medical specialty societies.
Meetings of the panel, known as
the Relative
Value Scale Update Committee, are open to the public. But people who attend
must sign a confidentiality agreement promising not to disclose information
about the discussions.
In developing their
recommendations, the report said, “physicians who serve Medicare beneficiaries
may have conflicts of interest” because they stand to benefit when the
government assigns higher values to the services they perform.
Higher values mean higher
payments. Medicare has assigned a numerical value to each of more than 7,000
services and procedures. Officials multiply this number by a “conversion factor”
— now about $36 — to determine how much doctors will be paid for a service.
While changes in the value of
particular services are not supposed to alter the amount spent by Medicare, they
can determine winners and losers, by increasing payments for some services at
the expense of others.
Dr. Barbara S. Levy, who has been
chairwoman of the medical association’s update committee for the last six years,
defended its work and said she did not see any conflicts of interest.
“We are not talking about dollars
or money,” said Dr. Levy, a gynecologist. “We are talking about the time and
resources that are necessary to perform a procedure, including: How many sutures
does it take? And what sort of equipment? And how many minutes of my nurse’s
time? And do I need a nurse versus a medical assistant for the safety of my
patient?”
“I can’t imagine how anyone other
than a group of physicians could provide that kind of expertise,” she said.
Another committee member, Dr.
Gregory J. Przybylski, a neurosurgeon in New Jersey, said, “It is very difficult
to get information about services being provided unless you ask the people who
are actually providing those services.”
Representative Jim McDermott of
Washington, the senior Democrat on the Ways and Means subcommittee on health,
said: “Medicare certainly needs clinical expertise to appraise the value of
doctors’ services, but we give medical specialty societies an undue influence on
their own payments. Medicare is a cash cow for specialists and not for family
practitioners.”
The American Academy of Family Physicians
has long argued that the American Medical Association panel should include more
primary care doctors, as well as consumer representatives, employers and health
care economists. Press officers for the A.M.A. said the panel had recommended
substantial increases for some primary care services in recent years.
Under federal law, Medicare fees
are supposed to reflect the time required to perform a service and the intensity
of the work, as well as the cost of items like office space, wages, supplies,
equipment and malpractice insurance. Medical societies collect data on doctors’
work by conducting surveys of their members.
But the surveys often have low
response rates, raising questions about their accuracy, and Medicare officials
do not have a way to verify the data, the accountability office said.
Barbara O. Wynn, a researcher at
the RAND Corporation who did a separate study commissioned by the government,
found that the time required for thousands of surgical procedures was less than
Medicare assumed. For example, Medicare assumes that surgeons spend 75 minutes
removing a prostate, Ms. Wynn said, but independent information indicated that
the time was closer to 54 minutes.
These and other weaknesses in the
data “could lead to inflated Medicare payment rates” for some services, the
Government Accountability Office said.
The auditors faulted Medicare
officials as well as the doctors’ committee. The federal Centers for Medicare
and Medicaid Services “does not fully disclose information upon which its
decisions were based” and does not follow “a standardized process” to establish
the relative value of doctors’ services, they said.
Physician groups “donate over $8
million” a year in services to the update committee, and “hundreds of physicians
provide volunteer time,” the report said. By contrast, it said, fewer than 10
people do such work at the federal Medicare agency.
The Obama administration said it
was seeking additional data so it could establish more accurate payment
rates.
The Affordable Care Act, signed
more than five years ago by President Obama, required Medicare officials to
reassess the time and effort needed to provide services. Congress in 2014
supplied $2 million a year so the government could collect its own data.
But the Government Accountability
Office said the Medicare agency “does not have a specific timeline or plan for
using these funds.”