1. JENNIFER L. GWILYM, DO HEALTH POLICY FELLOWSHIP SEPTEMBER 20, 2013 Impact of Medicares New Value-Based Payment Modifier

2. Value-Based Payment Modifier Replace Fee for Service Medicare (2015) Complex calculation based on cost profiles and quality data of physicians http://www.acepnews.com/news/news-from-the-college/single-article/physician-value-based-payment-modifier- starts-in-2015/

3. Value-Based Payment Modifier http://www.the-hospitalist.org/details/article/3782371/John_Nelson_Peformance_Key_to_Federal_Value- Based_Payment_Modifier_Plan.html December 2012

4. Medicares Financial Challenges Covers Reasonable and necessary services Problems: More beneficiaries qualify, healthcare is more costly, fewer workers CBO: Medicare Part A will be bankrupt in 2020 25% 65 and over living FPL in 1965 – now half of beneficiaries live in poverty Average lifespan 1965 was 70 y/o, now 78.5 years

5. Decreases in Tax Revenue Impact Medicare Originally, payroll tax 2.9% of all wage earners, split by employee and employer 2013 ACA mandates persons making over $250,000 will pay 3.8% 1965: 4.6 taxpayers per retiree 2013: 3.7 taxpayers per retiree 2030: 2.4 taxpayers per retiree

6. New Physicians Cost profiles Physicians with less than 10 years experience have a 13.2% higher cost profiles than physicians who have been practicing for over 40 years Possible reasons: Newer and more expensive treatment modalities More aggressive care due to lack of experience Shorter relationships with their patients Less-experienced may treat sicker patients or more non- compliant patients Health Affairs, 2012

7. Experienced Physicians Practice Patterns Physicians in practice longer May provide lower-quality care Posses less factual knowledge Less likely to adhere to appropriate standards of care May have poorer patient outcomes Less likely to adopt new proven therapies Exempt from recertification requirements Systematic Review, 2005

8. Unintended Consequences of VBPM Decrease access to new physicians to provide access to quality care for patients Force new physicians to modify their practice patterns New physicians in training programs would be concerned with their cost profiles instead of learning to practice medicine, resulting in less familiarity with certain procedures

9. Decreased Medicare Reimbursement Physicians will have to see more patients on a daily basis, therefore, spend less time with each Medicare reimburses 81% of private insurance Sustainable Growth Rate (SGR) Increased bureaucracy, additional paperwork, more oversight, less autonomy = job dissatisfaction Increase physician shortage-retire or switch careers Deter people from pursing medicine as a career

10. Recommendations Delay implementation of VBPM until guidelines are written and simplified Post on Health Compare Website Encourage parsimonious care – accept some responsibility for the cost of care Calculate cost profiles incurred during practice, not during residency

11. Questions? jennifer_gwilym@yahoo.com

12. References Background Medicare Value-Based Payment Modifier. (2012, 12 31). Retrieved from CMS.gov: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Background.html Executive Summary-AOA. (2012, 9 4). 2013 Medicare physician Fee Schedule Proposed Rule Summary of AOA Recommendations. American Osteopathic Association (AOA). Value-Based Payment Modifier. (2012, 31 12). Retrieved from CMS.gov: http://www.cms.gov/Medicare/Medicare-Fee-for- Service-Payment/PhysicianFeedbackProgram/ValueBasedPaymentModifier.html al., N. K. (2005). Systematic Review: The Relationship between Clinical Experience and Quality of Health Care. Annals of Internal Medicine, 260-273. Anita Arora, M. e. (2012). hat Kind of Physician Will You Be? Variation in Health Care and its Importance for Residency Training. The Dartmouth Institute. Bell, M. (2013, 3 4). Why Your Children Won't Have Medicare. Retrieved from Forbes.com: http://www.forbes.com/sites/michaelbell/2013/03/04/why-your-children-wont-have-medicare/ CMS. (2012, 12 31). Medicare FFS Physician Feedback Program/Value-Based Payment Modifier. Retrieved from Centers for Medicare & Medicaid Services: http://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/PhysicianFeedbackProgram/Background.html Cooper, R. a. (2009). States with More health Care Spending Have Better-Quality Health Care: Lessons About Medicare. Health Affairs, 103-115. Dunn, L. (2011, 8 31). AHA: Value-Based Purchasing Programs Fail to Meet Requirements Set Forth by ACA. Retrieved from Becker's Hospital Review: http://www.beckershospitalreview.com/hospital-management-administration/aha-value-based- purchasing-programs-fail-to-meet-requirements-set-forth-by-aca.html Elliott Fisher, M. M. (2009, 2 27). Health Care Spending, Quality, and Outcomes More Isn't Always Better. A Dartmouth Atlas Project Topic Brief. The Dartmouth Institute. Fiegl, C. (2012, 9 17). Medicare Modifier Could Hit Unsuspecting Doctors with Pay Cuts. Retrieved from amednews.com: http://www.ama-assn.org/amednews/2012/09/17/gvl10917.htm Fisher ES, W. H. (1999). Avoiding the unintended consequences of growth in medical care: How might more be worse? JAMA, 446-453. Jason Fodeman, M. (2011, 4). The New Health Law: Bad for Doctors, Awful for Patients. Retrieved from The Institute for Healthcare Consumerism: http://www.theihcc.com/en/communities/policy_legislation/the-new-health-law-bad-for-doctors- awful-for-pat_gn17y01k.html Joseph P. Newhouse, P. a. (2013). Geographic Variation in Medicare Services. The New England Journal of Medicine.

13. References Medicare Q & A. (n.d.). Retrieved from Budget.House.gov: http://budget.house.gov.settingtherecordstraight/medicare.htm Mehrotra, A. e. (2012). Physicians With The Least Experience Have Higher Cost Profiles Than Do Physicians With The Most Experience. Health Affairs, 2453-2463. Neumann, P. J. (2012). Medicare's Enduring Struggle to Define "Reasonable and Necessary" Care. The New England Journal of Medicine, 1775-1777. News Staff AAFP. (2012, 8 8). Get the 4-1-1 on CMS' Proposed Value-Based Modifier payment. Retrieved from aafp.org: http://www.aafp.org/online/en/home/publications/news/news-now/practice-professional- issues/20120808valuebasedprop.html O'Reilly, K. (2012, 1 18). www.amednews.com. Retrieved from American Medical News: www.amednews.com/apps/pbcs.dll.personalia/id=koreilly Pollack, R. (2011, 11 1). STATEMENT ON INPATIENT VALUE-BASED PURCHASING PROVISIONS IN FINAL OUTPATIENT PROSPECTIVE PAYMENT RULE. Retrieved from American Hospital Association: http://www.aha.org/presscenter/pressrel/2011/110111-pr-opps.pdf Richard A. Cooper, M. (2010). Health Care Reform From Myth to Practice. Annals of Surgery, 577-581. Shaun Frost, M. S. (2012, 9 4). Society of Hospital Medicine. Re:CMS-1524-P, Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the Requirement for Termination of Non- Random Prepayment Complex Medical Review and Other Revisions to Part B for C. Philadelphia, PA, USA. Staff, N. (2011, 8 31). AAFP to CMS: 2012 Physician Fee Schedule Needs Work. Retrieved from AAFP: http://www.aafp.org/online/en/home/publications/news/news-now/government-medicine/20110831feescheduleltr.html Stein, R. (2012, 1 3). Should Doctors Be 'Parsimonious' About Health Care? Retrieved from www.npr.org: http://www.npr.org/blogs/health/2011/12/30/144485098/should-doctors-be-parsimonious-about-health-care Westgate, A. (2012, 7 10). Major Changes Coming to Physician Reimbursement. Retrieved from Physicians Practice: www.physicianspractice.com/print/131995 Westgate, A. (2012, 4 20). Three Problems with Medicare's Value-Based Payment Modifier. Retrieved from Physicians Practice: www.physicianspractice.com/print/132265