Rural physician bonus on congressional chopping block

By Kate McCann

An incentive bonus for physicians who care for Medicare patients in the most needy areas will expire at the end of the year if Congress doesn’t act. Currently, Medicare pays a quarterly 5-percent Physician Scarcity Bonus to physicians who provide services in government-designated underserved areas. The bonus went into effect Jan. 1, 2005 as a provision of the Medicare Modernization Act and will expire Dec. 31, 2007.

A county or ZIP code receives a PSA designation based on its ratio of active primary care physicians to Medicare beneficiaries. All physicians who provide services in a designated PSA ZIP code and county receive the bonus automatically. Physicians whose county is on the automated payment list but whose ZIP code is not can self-designate their eligibility by adding an “AR” modifier to their Medicare claims.

Because more than half—135 of 254—Texas counties and almost 850 ZIP codes are designated Physician Scarcity Areas, many physicians receive the bonus automatically.

As a result, physicians who do not handle billing in their practices may not realize they receive the incentive and will not notice it until it is gone, says Jerome Connolly, AAFP Senior Government Relations representative. Plus, when payment is already below the cost of the service, the slight quarterly increase isn’t immediately obvious, he says. “Physicians already don’t get paid what they bill. If they bill $100 for an office visit and Medicare only pays them $80, even with the 5-percent increase, that’s only an $84 check they’ll receive. It’s not something that will jump off the page.”

Though the scarcity bonus alone could be considered small, if combined with the 10-percent HPSA Bonus—a bonus paid to physicians in a designated Health Professional Shortage Areas—the physician can receive a combined 15-percent bonus for a single service.

Incentive bonuses play an important role in enticing physicians to accept “trade-offs” of rural practice such as professional isolation and diminished access to social amenities, says Michael Ragain, M.D., M.S.Ed., chairman of the Department of Family and Community Medicine at the Texas Tech University Health Sciences Center.

Rural physicians have fewer privately insured patients than their urban counterparts because of the differing patient mix; many small communities contain higher percentages of elderly or poor and often do not have the industry structure to support large numbers of insured patients, he says.

“Anything that could be done to level the playing field financially would be desirable,” Ragain says. “There are some trade-offs for choosing a rural practice that are unavoidable, but income should not be one. Anything that governments or societies can do to help this situation is needed. Small towns need doctors to stay viable. Once doctors leave and hospitals close in small towns, the economic impact is devastating.”

Part of the reason the Physician Scarcity Bonus may not be renewed is because it was never evaluated. This validates the arguments of both its enemies and supporters in Congress. “There has not been any concrete data on its effectiveness; those on [Capitol] Hill don’t know if it’s working or not,” Connolly says. “Those who want to do away with it say ‘we don’t even know if it works.’ Those who do want it and already understand physician workforce issues, they’ll say we won’t see substantial evidence until the long term anyway.”

AAFP is advocating for rural physicians in Washington, D.C. “Because of our concern about a diminishing workforce—the number of physicians selecting family medicine as a specialty—we’re doing a number of things to address Medicare reimbursements, even though reimbursements are not the only draw to a certain locality,” Connolly says.

TAFP members have an important role to play to ensure fair Medicare payment in the future, by talking to their legislators about family physicians’ reimbursement concerns. Because most of the support for physician reimbursement increases has been in the U.S. House of Representatives, “we need to concentrate on the Senate and their Medicare package,” Connolly says.

“They’ll be going home for certain holidays between now and December. Whenever [TAFP members] have the chance to come in contact with their senators, this should be the first thing out of their mouths.”

AAFP unveils bold new attitude, actions

What family physicians need from the Academy has changed—and the Academy is transforming itself in response.

That need can be summed up in one word: advocacy. Members are in crisis and want a champion in Washington and with insurers, employers, opinion leaders and the American public. The Academy will be that bold champion, kicking off a two-year, multimillion-dollar strategic initiative to represent members with assertive actions, forceful language and a new brand identity to telegraph the change. The initiative launched Oct. 5 at the AAFP National Assembly in Chicago.

“The AAFP has always been a champion on behalf of its members and their patients,” said incoming AAFP President Jim King, M.D., of Selmer, Tenn. “Just as the practice of medicine changes constantly, the AAFP is always honing its efforts to communicate the value of family physicians. This new campaign expresses the AAFP’s commitment to play a central role in reforming the health care system for the benefit of all.”

In the past, members have said the Academy stood for great CME and great journals, said Donna Valponi, AAFP vice president for marketing, membership and meetings. “But starting two years ago, for the very first time, members elevated advocacy as being more important than the journals and CME. This was true regardless of the source of that information—member surveys, focus groups or other member interactions.”

The Academy’s new strategic initiative includes several elements, starting with the adoption of a new “bold champion” logo and a tagline, “Strong Medicine for America” to replace the AAFP seal. The Academy has also launched a $5 million strategic advertising campaign highlighting the importance of family medicine in health care reform that will appear in newspaper, magazine and radio outlets across the country. AAFP will use a national spokesperson to further the medical home message. In addition, the Academy will facilitate a medical home symposium for policymakers, purchasers and employers in late 2007 based on research from AAFP’s Robert Graham Center in Washington, D.C. Finally, health care consumers will have access to an e-advocacy action center on www.familydoctor.org.

Source: AAFP News Now, Oct. 3, 2007. © 2007 American Academy of Family Physicians.