This 'doc fix' would be bad for your health
An attempt to alter Medicare may let Washington dictate how doctors treat patients.

Reuters

U.S. Health and Human Services Secretary Kathleen Sebelius testifies before the House Energy and Commerce Health Subcommittee on "Patient Protection and Affordable Care Act Implementation Failures: What's Next?" on Capitol Hill in Washington December 11, 2013.

Article Highlights

  • Imagine if a provision in ACA allowed Sec. Sebelius to dictate to MDs which services they could&couldn't provide

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  • The new bill is part of a larger effort to change the way Medicare pays doctors.

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  • A fair reading of the bill shows it gives enormous discretion to the CMS and the Secretary of HHS

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Imagine if a provision in Obamacare allowed Health and Human Services Secretary Kathleen Sebelius to dictate directly to doctors which services they could and could not provide their patients — what individual tests they could conduct, which treatments they could offer, and medicines they could prescribe.

Americans would be outraged.

Yet some Republicans on Capitol Hill are about to help Democrats pass such a provision for Medicare patients. The Senate Finance Committee is set to vote on permanent "doc fix" legislation Thursday that grants the federal government broad new authority to determine "applicable appropriate use criteria" for the full range of outpatient medical services delivered to seniors. Similar legislative language is included in bipartisan draft legislation that is being marked up Thursday in the HouseWays and Means Committee.

The bill is part of a larger effort to change the way Medicare pays doctors. Each year since 2002, Congress has passed temporary "doc fix" legislation to cover billions of dollars of shortfalls in Medicare payments. The provisions in the bill apply to advanced radiology imaging tools like CT scans and MRIs. But language tucked into the legislation enables "the Secretary" of HHS to exert the same controls over the vast array of outpatient medical care for seniors.

Radiologists (and other medical specialists) struck a bargain with legislators to give them input into the development of these criteria — one reason doctor groups have rolled over. They see it as a better alternative to price cuts, or more direct controls over their medical practice. The bill does have language to give these groups a say over the criteria, but a fair reading of the bill shows these are weak and gives enormous discretion to the Centers for Medicare and Medicaid Services and "the secretary" of Health and Human Services.

The criteria will be loaded onto a website (hopefully not healthcare.gov) that's used to evaluate how and when doctors order the full range of outpatient tests and treatments. Doctors would have to consult the website before they order a test, and get a printout that says whether their use of the medical service conforms to the "appropriate use criteria." Doctors must submit the printout with their insurance claim to Medicare.

This database would eventually be used to identify "outlier ordering professionals." These are doctors who show a "low adherence" to the "appropriate use criteria." Starting in 2020, these "outlying" doctors would then be required to seek the advance permission of the government through a "prior authorization" process administered by a government website before they can order services for their patients.

All of these provisions are written to pertain to imaging services and radiologists. But language included at the end of this section of the legislation gives the HHS secretary broad discretion to establish an "appropriate use program for other Part B services."

This includes everything doctors do outside the hospital. The legislation allows Medicare to apply the same regulatory framework to other medical specialties like oncology.

These provisions are part of a much broader, secular shift toward increasing control of the practice of medicine by the federal government. With "applicable appropriate use criteria," Washington would have the tool to effectively control the practice of medicine for America's senior citizens.

Everyone agrees that the system by which Medicare pays doctors is deeply flawed. It rewards doctors based on the volume of services they deliver, with no measure of their quality of care. And it doesn't reward doctors based on delivering better outcomes. This creates all kinds of distortions in the market for medical care.

Washington's solution to the problems created by its current payment systems is to layer on more corrosive controls that erode any semblance of market pricing.

There are other provisions in this "doc fix" that involve more flexibility and less micromanagement in how doctors practice, and don't rely on "appropriate use criteria." But critics of Obamacare, some of whom support the bill, should know better than to trust the government.

It should be clear to everyone by now that the delivery of medical care isn't something that can be micromanaged from Washington or be administered by a secretary of Health and Human Services with wide latitude to interpret and reinterpret the rules.

Dr. Gottlieb is a physician and resident fellow at the American Enterprise Institute. He consults with and invests in life-science companies.

Follow Dr. Gottlieb on Twitter @ScottGottliebMD. For more from AEI's health team, follow @AEIhealth.

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  • Scott Gottlieb, M.D., a practicing physician, has served in various capacities at the Food and Drug Administration, including senior adviser for medical technology; director of medical policy development; and, most recently, deputy commissioner for medical and scientific affairs. Dr. Gottlieb has also served as a senior policy adviser at the Centers for Medicare & Medicaid Services. 

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