Score one for CMS

Medicare pay for performance came another step closer to reality when AMA officials met late last year with congressional leaders and committed the physician community to creating 140 performance measures by the end of 2006. Meanwhile, CMS is moving forward with its Physician Voluntary Reporting Program, which calls upon doctors to start submitting data to CMS this year on an initial set of quality measures.

Some physician leaders are sanguine about these developments. "We're fairly confident that next year or in 2008, at the latest, reporting will be attached to payment," says FP Bruce Bagley, medical director of quality improvement at the American Academy of Family Physicians. "So we're encouraging doctors to put systems in their offices to begin data collection now."

But leaders of seven specialty societies lashed out at the AMA, saying that its deal with Congress gave away too much without getting a commitment to change a Medicare reimbursement system that they and the AMA regard as unfair. In a letter to AMA Board Chair Duane M. Cady, these associations also complained about what they viewed as a rush to develop and implement performance measures.

What led to the AMA pact with Congress

When CMS announced its data collection program last October, its stated purpose was to help doctors get used to reporting quality data, get feedback on how they were doing, and provide input to CMS about how to improve the reporting process. But public statements by CMS officials left no doubt that this was part of the agency's preparations for implementing a nationwide pay-for-performance program. For example, nephrologist Barry Straube, director of the CMS Office of Clinical Standards and Quality, said that physicians would probably follow the same course that hospitals have: first voluntary reporting, then "pay for reporting," and finally, public reporting of quality data and pay for performance.

The AMA protested the voluntary reporting program, saying in an editorial in American Medical News that it "falls short on credible quality standards and is long on onerous administrative burdens." The association maintained that some of the measures were questionable and that the hospital-based measurements would be difficult to apply to individual doctors. CMS responded by chopping the number of measures from 36 to 16, but it continued preparing to introduce the reporting system in early 2006.

Meanwhile, Congress was considering several bills that would have given CMS authorization to introduce "value-based purchasing" of physician services-a euphemism for pay for performance. The medical establishment didn't want to support any P4P program until Congress agreed to change the method of Medicare reimbursement, which is currently based on meeting "sustainable growth rate" (SGR) targets. As a result of the SGR approach, the 2006 budget bill included a 4.4 percent cut in reimbursement for doctors, which was part of a planned 26 percent reduction over six years. The AMA was determined to head off those cuts. Congressional leaders were equally determined to move toward value-based purchasing.

In the end, Congress left physician fees at the 2005 level but didn't do anything about the payment methodology. As part of the maneuvering that led to that result, the AMA struck a deal with key congressional leaders, including Sen. Chuck Grassley (R-IA), Rep. Bill Thomas (R-CA), and Rep. Nathan Deal (R-GA). The politicians agreed to work with physician groups in 2006 "to implement additional reforms to address payment and quality objectives." In return, the AMA promised that medical groups would develop 140 physician measures covering 34 clinical areas by the end of 2006.