Medicare payment changes draw fire

Neurologists rip lower test fees

Neurologists in Boston and nationwide are objecting to a plan that would pay them less for certain diagnostic tests, a change meant to cut Medicare costs and direct more money to primary care physicians whose pay is widely seen as inadequate even before they take on more work under the national health care overhaul.

The neurologists are asking federal regulators to reconsider the plan and argue that the cuts, made under a provision of the Affordable Care Act, could undermine patient care and limit access to neurology services.

The debate highlights the short-term pain and pressure expected from changing the way health care is paid for, a process certain to produce winners and losers.

“This loss of revenue is devastating,” said Dr. Bruce Sigsbee, a neurologist in Rockport, Maine, and president of the American Academy of Neurology. The cuts cause harm not only to the subset of neurologists who perform the tests but to the specialty as a whole, he said.

The tests effectively subsidize other kinds of neurology care that provide less lucrative payments, and specialists said the change could prompt some neurologists and hospitals to see fewer Medicare patients.

But Jonathan Gruber, an MIT economist who was a consultant to the Obama administration during drafting of the Affordable Care Act, said there is little doubt that more money must be directed to primary care services.

“We have a system that everyone agrees is out of whack,” Gruber said. “Everyone agrees we spend too much on health care. The problem is, once we get to fixing it, that’s where the disagreements arise.”

The median pay for a neurologist in the United States last year was $254,836, according to the latest physician compensation survey by MGMA, previously called the Medical Group Management Association. That’s far lower than for doctors in the high-paying specialties of cardiology or dermatology but higher than for family physicians, whose median pay was $200,114.

Medicare is projected to pay about $1.6 billion for neurology services next year, 7 percent less than in 2012, according to payment rules issued by the Centers for Medicare & Medicaid Services.

Much of that reduction comes from a change in how Medicare will pay for tests used to understand nerve and muscle pain or weakness and to diagnose conditions such as carpal tunnel syndrome, ALS, and forms of muscular dystrophy.

Historically, neurologists have billed for each nerve they test — sometimes dozens in one patient. But the fee for each nerve includes costs such as the time a doctor spends greeting a patient, meaning those overhead costs are assessed multiple times.

Specialty groups that annually review the billing system in conjunction with the American Medical Association identified the neurology codes as “potentially misvalued,” leading to overpayment by the federal government. The Centers for Medicare & Medicaid Services agreed and issued a rule that includes new codes grouping nerves together and allowing lower charges overall for the tests.

The result is that while Medicare will pay slightly more for some tests, it will pay half as much as it did in 2012 for other tests, according to analyses from specialty medical groups.

“Medicare will still pay for the tests that a neurologist determines are necessary to diagnose a problem, but will only pay for the same practice expenses once,” Medicare chief Jonathan Blum said in an e-mailed statement.

Sigsbee’s group has asked members to contact lawmakers and is requesting that the agency phase in the change and is considering appealing the change.

“Medicare’s budget is under water, and they’re looking for ways to reduce payments,” said Dr. Lee Schwamm, vice chairman of the Department of Neurology at Massachusetts General Hospital. But the cuts could have “significant negative consequences,” he said.

Most major hospitals have centers to conduct the specialized testing, known as nerve conduction and electromyography. Several Boston neurologists said revenue from those tests offsets the poorer payments that come from office visits when doctors spend time with patients assessing complicated neurological disorders. They worried that, as often happens, private insurers would adopt similar cuts.

“There’s a feeling there of, where did this come from?” Schwamm said. “This seems rather abrupt.”

Schwamm said he expected Mass. General to continue using the tests for patients whose conditions warrant it, but he worried the cuts could limit patient access if some providers stop offering the tests or only serve people who are privately insured or can afford to pay more out of pocket.

Mass. General is among several hospitals in Massachusetts evolving into an accountable care organization. Under such a system, Medicare effectively sets a target for the cost of overall patient care, with hospitals sharing in savings or losses. With such arrangements, which emphasize preventive care, the neurology cuts could become irrelevant, Schwamm said, and doctors’ pay would be less contingent on fees from individual tests or treatments.

Similar changes are occurring in the private insurance market, but they won’t happen all at once. “The hardest time is the transition,” he said.

Sigsbee said the cuts could push some neurologists not employed by a major hospital out of business or make it harder to recruit young doctors to the speciality.

Medicare payments for family physicians next year are expected to increase 7 percent, to $5.9 billion, according to the physician fee schedule. (The increase will hold only if Congress — as it has for several years — overrides a provision to limit Medicare spending.)

Changes like the neurology cuts could help to push providers into newer models of care, such as accountable care organizations, Gruber said. But lessening the blow in the short term is tricky as the government corrects such “cross subsidies,” when what may be seen as overpayment for one test or treatment helps to cover the cost of other worthwhile services. “I’m stuck on that,” he said.