Healthcare groups, consumer groups split over CMS proposal to allow doctors to bill patients directly

A physician's stethoscope
CMS wants to hear from stakeholders as it develops a new payment plan for physician practices. (Getty/millionsjoker)

Healthcare and consumer groups are already divided over a plan by the Centers for Medicare & Medicaid Services to allow doctors to bill Medicare patients directly.

The model would allow so-called direct provider contracting (DPC) between payers and primary care or multispecialty group practices within the Medicare fee-for-service program, Medicare Advantage and Medicaid, the health agency said in an announcement.

“A direct provider contract model would allow providers to take further accountability for the cost and quality of a designated population in order to drive better beneficiary outcomes,” CMS said.

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“Such a model would have the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures,” the agency said. 

RELATED: Future CMS innovation center initiatives could include outcomes-based drug pricing, telehealth

CMS is seeking comments before moving forward with the model.

The idea is a controversial one. Two major physician groups, the American Medical Association (AMA) and the Medical Group Management Association (MGMA), support the proposal, but some consumer advocates, including AARP, oppose the plan. 

How it might work

Under current law, physicians are paid under a fee schedule in Medicare that includes limits on the amount they can bill beneficiaries per service unless they choose to opt out of Medicare and enter private contracts with all their Medicare patients.

RELATED: 3 reasons to let go of fee-for-service payment models

According to CMS’ latest request for information (PDF), CMS would directly contract with physician group practices, which would agree to be accountable for the cost and quality of care of a defined beneficiary population. Beneficiaries would voluntarily enroll in a practice and would receive enhanced access to physician services.

Doctors would see reductions in administrative burden for billing and a revenue stream that would aim to give them more flexibility in how and where they care for their patients.

Under a primary care-focused DPC model, CMS would pay participating practices a fixed per-beneficiary per-month payment to cover services, which may include office visits, certain office-based procedures and other nonvisit services covered under the Physician Fee Schedule. Practices could also have an opportunity to earn performance-based incentives.

Pros and cons

The idea was raised in part by comments from patients, clinicians and others submitted last year after the CMS Innovation Center issued a call for new ideas to promote patient-centered care and reforms. CMS received over 1,000 responses, which it released this week, including those from medical societies and associations, health systems, physician groups and private businesses.

The AMA told CMS in a letter last year that it supports allowing patients to contract directly with physicians and physician-led teams to deliver care.

The MGMA said the idea could be better for doctors and patients. “While many details need to be filled in, a model that gives group practices greater flexibility to furnish services not traditionally covered by Medicare and incentivizes patients to actively engage in decision making about their care has the potential to yield higher quality and lower cost outcomes,” said Jennifer McLaughlin, the group’s senior associate director for government affairs, in an email to Fierce Healthcare. “There are also significant opportunities to reduce documentation requirements and eliminate care coordination restraints for group practices in this proposed model, resulting in better, more convenient care for patients.”

But in its letter to CMS, AARP said private contracting would allow doctors to pick and choose the patients or services for which they will bill Medicare.

"(Current) rules prevent doctors from choosing patients based on the severity of their illness or other characteristics or charging different patients different amounts," AARP wrote. "These rules also reduce the likelihood of fraudulent billing, help maintain access to care for Medicare beneficiaries and protect patients from high out-of-pocket costs."

CMS is seeking comments through May 25 before testing the model.

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