January 1996 Bulletin

Dr. Graham tells PPRC need for point-of-service

True freedom of choice for Medicare patients in managed care plans can only be achieved by requiring every managed care plan to have a point-of-service feature, Michael H. Graham, MD, chairman of the Council on Health Policy and Practice, told the Physician Payment Review Commission (PPRC) on December 13. "This feature should be built into every plan, not just offered at the time of enrollment," Dr. Graham said.

"Well-run managed care plans providing good service to their enrollees have nothing to fear from the point-of-service feature. Perhaps, this is why it currently is an option in 70 percent of managed care plans.

He told the PPRC that the Academy supports several other patient protection measures. These include compliance with the current ban on financial incentives to withhold care or deny necessary referrals must be strictly monitored and enforced. In addition, every managed care plan should be required to provide all prospective and current enrollees with easily understood written information describing the terms, conditions, benefits, and, especially, the restrictions of the plan. Plans should also be required to provide this information verbally to enrollees at their request.

Dr. Graham said the Academy believes there should be minimum quality standards that managed care plans must meet to enroll Medicare beneficiaries.

Also, the Academy believes that "public funds should not be used to boost the profits of managed care plans at the expense of patient care," Dr. Graham said. "In order to eliminate excessive administrative costs, managed care plans which do not spend at least 85 percent of the premium dollars on patient care should not be allowed to enroll Medicare beneficiaries."

Dr. Graham also discussed further refinement of Medicare fee schedule policies. The Health Care Financing Administration (HCFA) has spent the last year conducting its first five-year review of the Medicare Fee Schedule. In the last several months the AMA/Specialty Society RVS Update Committee (RUC) has reviewed more than 1,000 recommended changes in work values submitted to HCFA by specialty societies, individuals, and Medicare Carrier Medical Directors. He said the Academy was concerned that the time allotted to HCFA and the RUC may not be sufficient to conduct an in-depth analysis of all the codes.

Dr. Graham said there was a similar concern about the development of the resource-based practice expense component for the RBRVS by Jan. 1, 1998. HCFA has contracted with Abt Associates to study direct and indirect practice expenses. "We are concerned that time and budget constraints for the HCFA/Abt project may result in a product that is based on incomplete or flawed data," Dr. Graham said. "We recommend that HCFA consider allowing national medical specialty societies to help by expanding the sample size and by assisting those practices that have been selected to complete the survey.

"We would urge that Congress extend the deadline for implementation by one year to January 1999.

Dr. Graham observed that the House of Representative's Medicare reform package approved in October would eliminate the formula for calculating three separate Medicare volume performance standards and conversion factor updates for surgery, primary care, and nonsurgical services. Instead, a single performance standard and conversion factor would be calculated for all of medicine.

Dr. Graham urged that the current separate volume performance standards and conversion factor updates should be maintained. He said the Academy believes that "if a single performance standard and conversion factor update must be implemented, a transition period should be established to reduce the severe impact of these changes."

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