American Academy of Family Physicians
Friday Mar 01, 2013

Lies, damned lies, and statistics

Mark Twain famously said, "There are three kinds of lies: lies, damned lies, and statistics."

I was reminded of the phrase recently when researching how the employers of some family physicians are using data from the Medical Group Management Association's (MGMA's) annual Physician Compensation and Production Survey to create compensation systems that disadvantage family physicians relative to their peers in internal medicine. MGMA's data show that the median compensation per work relative value unit (RVU) for family physicians solely in ambulatory care (i.e., no inpatient care) is less than the corresponding figure for internal medicine.

In reviewing the survey data and speaking with MGMA staff members, I learned that, in MGMA's experience, the compensation per RVU data is the most misused and misinterpreted piece of information in the annual survey. Further, a summary of MGMA's 2012 report based on 2011 data highlights the disconnect between compensation and production (as measured in work RVUs) as the relationship between the two is not constant. The summary report shows that as family physician compensation increases from one quartile of productivity to another, compensation per RVU decreases, reflecting the fact that productivity (as measured by work RVUs) increases at a greater rate than total compensation across the quartiles.

The lower compensation per work RVU for family physicians compared to general internists may simply reflect that family physicians are more productive than their general internist colleagues, relative to their compensation. For example, the median work RVUs for family physicians in ambulatory care in the MGMA data tables were 5,468, while the median for general internists were only 5,233.

Or it could be due to a number of other reasons:

• Unlike Medicare, many private payers use multiple conversion factors that vary by, among other things, types of service. If general internists provide a mix of services with higher conversion factors than those provided by family physicians – more surgical or procedural services versus evaluation and management services, for example – that could result in a higher compensation per work RVU.

• The payer mix may also impact total compensation. For instance, if family physicians treat a higher percentage of Medicaid patients, their compensation may be lower even if they provide exactly the same services (and generate the same work RVUs) as general internists.

• Some medical groups are able to negotiate higher compensation rates from private payers than other groups; if general internists disproportionately belong to such groups, they may benefit from higher compensation, even if producing the same number of work RVUs as their family medicine colleagues with less bargaining clout.

To its credit, MGMA is clear that the information contained in its report "is presented solely for the purpose of informing readers of ranges of medical practice compensation, charges, and revenue reported by MGMA-ACMPE member and nonmember organizations." They are also explicit that the data "may not be used for the purpose of limiting competition, restraining trade, or reducing or stabilizing salary or benefit levels." Finally, MGMA notes that its "publications are distributed with the understanding that MGMA-ACMPE does not render any legal, accounting, or professional advice that may be construed as specifically applicable to individual situations."

In summary, MGMA is simply reporting what its survey respondents told it. The calculated compensation per work RVU is the result of multiple factors, and it is intended to be descriptive, not prescriptive. If an employer of family physicians is using the compensation per work RVU calculations to set compensation levels for family physicians less than other primary care physicians, it would appear to be a misuse and misinterpretation of the data.

Or as Mark Twain once put it, "Get your facts first, then you can distort them as you please."

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Friday Dec 21, 2012

Medicare's impending fiscal cliff for physicians

If the federal government does go over the "fiscal cliff" in a little more than a week, don't expect those overseeing physician reimbursements to pad the fall.

The Centers for Medicare and Medicaid Services (CMS) on Dec. 19 announced in an email and conference call with physicians that Medicare claims filed after the first of the year will be processed as normal, which means likely including a planned 26.5 percent reduction in the Medicare physician services conversion factor.

Physicians are also facing an additional 2 percent cut in the Medicare physician payment rate because of the Budget Control Act's sequestration provision.

Under current law, clean electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt. In similar past situations, CMS has taken advantage of that provision to have its contractors hold claims for up to 10 business days before processing them, in order to give Congress more time to act and to avoid processing claims twice when the conversion factor is in flux.

“The negative update of 27 percent under current law for the 2013 Medicare Physician Fee Schedule is scheduled to take effect on January 1, 2013,” CMS wrote in the email. “Given the current progress with the legislation, CMS must take steps to implement the negative update.”

CMS did say that it would notify physicians on or before Jan. 11, 2013, about the status of Congressional action to avert the negative update and next steps. Claims with dates of service on or before Dec. 31, 2012, will be unaffected in any case.

Ongoing efforts to avoid the cliff and override the planned rate reduction have so far failed and won't resume until after Christmas at the earliest.

In the meantime, you are advised to start taking steps to mitigate the disruption and meet your own financial obligations in January, in case the cuts actually take effect. This includes re-assessing your Medicare participation options and the extent to which you can continue to afford to care for Medicare beneficiaries. If you decide to limit your involvement with the Medicare program, notify your Medicare patients promptly, so that they, too, can explore other options to seek health care and medical treatment. Finally, you are encouraged to contact your Congressional representatives about this matter, and the American Academy of Family Physicians has provided a convenient means to do so.

–Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Tuesday Dec 18, 2012

New rule would let more family physicians treat veterans

While many family physicians want to treat the military veterans in their communities, the Department of Veterans Affairs (VA) hasn't always made that easy. Thankfully, the VA recently began taking steps to loosen its regulations in such a way that family physicians could have greater ability to serve veterans and get paid by the VA for doing so.

Under current law, private physicians can provide certain hospital care and medical services to eligible veterans when VA facilities either are not accessible or aren't able to provide the necessary care. These services are provided under the Non-VA Care program. However, the program allows that non-VA care only if the veteran initially received treatment during a period of hospitalization.

Last month, the VA published a proposed revision to this regulation in the Federal Register. The change would enlarge the list of eligible providers where the veteran initially received care to include nursing homes, domiciliary care, or other medical services. The VA could authorize non-VA treatment under the program for up to 12 months, with the option of additional reauthorizations as needed.

The American Academy of Family Physicians (AAFP) enthusiastically supports this step since it improves health care access for veterans and will allow the VA to better utilize community resources. Separate from this proposed regulation, the AAFP is encouraging the VA to identify and remove additional barriers that inhibit the way community-based family physicians are able treat their patients who also happen to be veterans. Specifically, the AAFP is urging the VA to reexamine a burdensome regulatory requirement that in order for a veteran to obtain a prescription at the VA's discounted price it has to be written by a VA-affiliated provider. Instead, AAFP believes the VA should recognize the validity of a community-based physician's prescription.

The VA’s recent proposal won’t eliminate all of the barriers that community family physicians face in trying to serve veterans. However, it appears to be a step in the right direction for both veterans and their family physicians.

 –Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Thursday Aug 16, 2012

Medicare physician fee schedule redux

In a previous blog, I posted about the proposed rule on the 2013 Medicare physician fee schedule. I subsequently received questions regarding whether or not the American Academy of Family Physicians (AAFP) had any involvement in the creation of the proposed 2013 fee schedule and what impact the fee schedule might have on family physicians. To the best of my knowledge, AAFP was not directly involved in the creation of the proposed 2013 Medicare physician fee schedule. The Centers for Medicare & Medicaid Services (CMS) essentially reserves sole responsibility for its creation.

AAFP  advocates with CMS throughout the year on elements of the physician fee schedule, and the results of that advocacy can be seen in CMS's estimate of the proposed rule's impact on family medicine. Specifically,  CMS estimates that family physicians will experience approximately a 7 percent increase in Medicare allowed charges in 2013, based on what is in the proposed rule (see page 12 of the AAFP's summary of the proposed rule). That percentage is higher than any other specialty listed. So, although AAFP can't take responsibility for creating the proposed rule, it can certainly take some credit for the estimated positive impact on family physicians.

AAFP is preparing a response to the proposed rule in advance of the Sep. 4, 2012, deadline for comments, and I look forward to sharing that with you in a future post. In the meantime, thanks for the questions, and please let me know if you have more.  

Thursday Nov 05, 2009

Sunny with a chance of gloom

There is potential good news on the Medicare horizon as far as family physicians are concerned.  However, the silver lining is attached to a big, black cloud that could rain on everyone's parade unless Congress intervenes by the end of the year.

On Friday, Oct. 30, the Centers for Medicare and Medicaid Services (CMS) put the final rule on the 2010 Medicare physician fee schedule on display for review and comment by all interested stakeholders.  CMS plans to publish the final rule in the Federal Register on Nov. 25, 2009.  CMS will accept comments until Dec. 29, 2009.

In the final rule, CMS finalized many of the proposals that it made in its proposed rule earlier this year.  For those of you keeping score at home, that's good news for family physicians.  In fact, in the final rule, CMS estimates that family physicians will experience a 4 percent increase in their Medicare allowed charges in 2010 as a result of the rule, all other things being equal.  That is second only to ophthalmologists and optometrists, who are projected to reap a 5 percent increase, and much better than physicians in many other specialties, who are expected to see a decrease in their 2010 Medicare allowed charges as a result of the rule.

Of course, with Medicare, there's always a catch, and the final rule on the 2010 physician fee schedule is no exception.  Under current law, the Medicare conversion factor, which translates Medicare's relative value units into payment allowances, is scheduled to decrease 21.2 percent on Jan. 1, 2010, which would more than wipe out the potential gains for family medicine noted above.  That means Congress has until Dec. 31, 2009, to intervene, as it has the last several years, to avoid this cut.  Forecasters inside the Beltway are optimistic, but as they say on Wall Street, past performance is no indication of future returns.

So, as we approach the new year, the outlook is sunny, but you might want to keep your umbrella handy, just in case.

Thursday Oct 22, 2009

You might be a coding and payment geek if . . .

The arrival of the new ICD-9 manual recently reminded me that there are certain things that distinguish coding and payment geeks from otherwise "normal" people.  So, for your consideration, I offer you the top 10 signs that you might be a coding and payment geek:

10.  The first thing you associate with December is the arrival of the new CPT book.

9.  You actually get excited when your new coding books arrive.

8.  You wonder why the toy doctors bag you bought your kid doesn't include a claim form.

7.  You worry your family physician is undercoding your visit.

6.  You consider the Federal Register light reading.

5.  You write to CMS more than to your own mom.

4.  You actually understand Medicare's Sustainable Growth Rate formula.

3.  You collect past issues of CPT Assistant on eBay.

2.  When your family physician tells you that you have conjunctivitis, you wonder what the ICD-9 code for that is.

 And the number one sign that you might be a coding and payment geek:

1.  You actually understood the humor in this blog post!

Wednesday Sep 16, 2009


I am trying to figure out why family physicians choose to contract with health plans. 

My pondering of this question is prompted, in part, by an article, "What Does It Cost Physician Practices to Interact with Health Insurance Plans," which appeared as a web exclusive on May 14, 2009, in Health Affairs. According to the article, primary care practices spent $64,859 annually per physician – nearly one-third of the income plus benefits of the average primary care physician – on interactions with health plans. The article also notes that primary care physicians, especially those in small practices, spend larger amounts of time interacting with health plans than physicians in other specialties.

Why would a family physician voluntarily spend almost $65,000 per year for the opportunity to interact with commercial health plans? What do family physicians think they are getting for their money?

The article suggests that there are benefits to these interactions. For example, the authors point out, prior authorization and formulary requirements may reduce costs and improve the quality of care by reducing the inappropriate provision of services and promoting the use of appropriate procedures and medications. That may be, but somehow, I doubt that's why family physicians buy into the process. After all, $65,000 per year would go a long way toward the purchase of an EHR with decision support tools and electronic prescribing, which might also achieve the same results with less aggravation in the long run. 

Some might suggest that family physicians don't "choose" to contract with health plans, that they have to do so for their practices to be viable. In this view, health plans are like some sort of health insurance Mafia that make family physicians "an offer they can't refuse" to ensure their practices stay open. Given the relative bargaining strength of family physicians and most health plans, this view is understandable. 

The corollary to this answer is that if a family physician chooses not to contract with health plans, he or she won't have any patients, or at least not enough to sustain the practice. The premise here seems to be that patients do not value the services of family physicians beyond the co-payment most of them currently must pay for an office visit. 

However, there are some problems with this answer and its corollary. One problem is that there are examples of family physicians who have successful cash-only practices, and I'm not talking about the kind of practices that only cater to the lifestyles of the rich and famous. Family Practice Management has highlighted some over the years; for example, see "2,500 Cash-Paying Patients and Growing" in the February 2006 issue. 

Another problem is that it's not clear where else all of these patients would go if family physicians opted out of contracting with health plans. According to a one-pager produced by the Robert Graham Center, family physicians and general practitioners provided 24 percent of the average 838 million visits per year provided by all physicians in 2003. If my math is correct, the rest of the system would have to increase its capacity by one-third to cover all of those visits, if patients decided not to see family physicians because they didn't accept insurance. I find it hard to believe that is possible.

I understand that the counterpoint here is that contracting decisions are made at the individual practice level, not the level of the specialty as a whole. In other words, family physicians contract with health plans because they are afraid that if they don't, their patients will go to their colleagues who still do. I understand that counterpoint to mean that family physicians choose to contract with health plans because their colleagues do, from which one might conclude that if their colleagues jumped off a cliff, most family physicians would do the same.   

A third problem with the "I-can't-afford-not-to" argument is that it runs contrary to what family medicine is saying and has evidence to support regarding the value of family physicians. Much of what is being discussed in the context of health care reform shows buy-in for the notion that there is value in primary care, and proposals on Capitol Hill would spend billions on primary care, including family medicine. Yet, interestingly, many family physicians seem convinced that patients won't pay more than $25 for their services. 

The only remaining answer I can discern to the question of why family physicians contract with health plans is that they are making money on the deal. In short, it must be worth more than $65,000 per year to contract with health plans. I would find this answer more convincing if family medicine did not consistently rank near the bottom of earning lists by specialty. I would also find it more convincing if the percentage of U.S. medical student graduates choosing family medicine was higher or trending upward. 

In the end, the more that I ponder the question of why family physicians contract with health plans, the less that I think I know the answer.

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