• Health Policy and Government Relations
• Contact Congress - Take Legislative Action
• SVS Health Policy Committee Meets with Senators/Staff
• Priority Issues
• Imaging Cuts
• SAAAVE Act
• Physician Payment
• Pay For Performance (P4P)
• Fistula First Initiative
• Reimbursement
• Regulatory Issues
• Political Action Committee
• 111th Congress Committee Assignments
• SVS Position Statements

P4P: Funding

Perhaps there is no other issue that engenders more heated and passionate discussion than the issue of funding. Appropriate and widespread implementation of P4P will require a considerable infrastructure, the expense of which will be borne by hospitals for inpatients and by physicians for patients in their practice. Although P4P has implicit incentives due to improved efficiency, decreased morbidity, and improved outcomes, direct incentive payment for P4P is what counts to providers. The sources for such direct incentives can be additional funding over and above established reimbursement; this is the method preferred by providers and the one that makes most sense. Less favorable methods include withholding a certain percentage of reimbursement to be earned back when certain performance measures are met or a method that has been recently discussed, which is to increase funding for the top performers and reduce it for the bottom performers compared with norms.²⁴ In the minds of many, the last two options amount to yet another decrease in reimbursement that would be over and above the expected drop in the value of the conversion factor of 4% to 5% a year over the next five or more years.

Although all discussions indicate to the use of additional funding for P4P, such funding has yet to be allocated by Congress. A bill sponsored by Representative Nancy Johnson (R-CT) that proposed funding for P4P programs in the 2006 budget was encouraging; however, hopes were dashed when the budget reconciliation bill that finally passed included a widely reported $36 billion in Medicare cuts over the next 5 years with no funding for P4P. The lack of appropriated funds is definitely not slowing down this process; it is going on as strong as ever. CMS rolled out the PVRP program with no additional funding or financial incentives provided. Also, on February 21, 2006, an article in the New York Times shed light on a “joint House-Senate working agreement with the AMA” signed on December 16, 2005, by Dr Duane Cady, Chairman of the AMA Board, and by Committee Chairmen Grassley, Thomas, and Deal on behalf of Congress. In this “confidential” agreement, AMA committed to developing about 140 physician performance measures in 34 clinical areas by the end of 2006. The agreement also included a commitment that doctors will voluntarily report to the federal government data on these quality measures by 2007. In a letter to the AMA, the presidents of seven medical specialty groups objected that AMA signed this agreement without consultation with their groups, partly basing their objection on the fact that the AMA did not get assurances that physicians will be adequately compensated for participating in this P4P initiative. In response to the Times article, Dr Michael Maves, the Executive Vice President of the AMA, sent a memo to national medical specialty societies and state medical associations
clarifying the agreement. In his memo, Maves stated that the Congressional leaders were committed to address payment and quality reforms in 2006. Dr Maves also maintained that the AMA was under intense pressure to agree to the points stated in the memo, indicating that Congress would be “less inclined to address payment cuts triggered by the Sustainable Growth Rate (SGR) formula if there was insufficient progress on the quality front.”

Article References

Reprinted from Journal of Vascular Surgery, Volume 44, Number 4, October 2006, Anton M. Sidawy, MD, MPH, Washington, D.C., "Pay for Performance: The process and its evolution," 892-902, Copyright 2006, with permission from The Society for Vascular Surgery.

Journal of Vascular Surgery (http://www.jvascsurg.org)