AMA House of Delegates
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California internist Marcy Zwelling, MD, was among those recommending compensation for physicians for time spent challenging Medicare audits. Photo by Luci Pemoni / AP Images for American Medical News

AMA meeting: Principles would govern Medicare switch to defined-contribution system

Delegates also set policy calling for compensating physicians for time spent on Medicare recovery audit contractor requests.

By Charles Fiegl amednews staff — Posted Nov. 26, 2012

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Delegates outlined a set of principles for a Medicare defined-contribution system if federal lawmakers seek to move the entitlement program away from its current defined-benefits structure.

The American Medical Association House of Delegates did not endorse the defined-contribution model but rather established principles for such a system. The adopted policy supports retaining traditional Medicare coverage as an option for a senior to purchase with a fixed federal subsidy, along with health plan options run by private insurers. A defined-contribution system also should support increased subsidies for low-income Americans and continued funding for graduate medical education, the AMA said.

“With robust patient protections in place to help the most vulnerable beneficiaries, a defined-contribution program can help ensure the sustainability of Medicare for current and future generations,” said AMA President-elect Ardis Dee Hoven, MD. “This policy provides the framework to create the needed balance of access, affordability and financing, and allows seniors the choice of coverage options that include both traditional Medicare and private insurance plans. We will continue to explore the effects of transitioning Medicare to a defined-contribution program on cost and access to care.”

The policy would require competing private health insurance plans to meet guaranteed-issue and renewability requirements, be prohibited from rescinding coverage except in cases of intentional fraud, follow uniform marketing standards, meet plan solvency requirements, and cover at least the actuarial equivalent of the benefit package provided by traditional Medicare. Defined-contribution amounts also would be adjusted for beneficiary age, income and health status.

Defined-contribution amounts should be adjusted annually to ensure that insurance coverage is affordable for all seniors, the policy states, and the amounts should reflect changes in health care costs.

Compensation for time lost sought

Delegates also agreed to push for legislation that would repay physicians for time and other costs associated with appealing recovery audit contractor determinations.

The audit process is an administrative nightmare for hospitals and physicians, said Los Alamitos, Calif., internist Marcy Zwelling, MD, an alternate delegate from the California Medical Assn. She told delegates about a physician in Orange County whose audit involved a lengthy medical records request seeking large overpayments.

“After days and weeks of complete terror, she was told she owed Medicare $16,” Dr. Zwelling said. “She, of course, was not reimbursed for her time. We think if they’re actually going to do these audits that they prove there is a problem.”

The AMA also will oppose RAC audits of evaluation and management services, such as patient office visits, the adopted policy states. The Association will explain to Congress and the Centers for Medicare & Medicaid Services “why these audits are deleterious to the provision of care to patients with complex health needs.”

Another new policy supports every physician’s ability to choose not to enroll in Medicare. The policy states the AMA will “seek the right of patients to collect from Medicare for covered services provided by unenrolled or disenrolled physicians.”

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