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With Tom Price in Charge, Doctors Are Winning Again in Washington
By Erin Mershon STAT August 1, 2017

As the Senate was barreling toward one of its votes to repeal the Affordable Care Act earlier this summer, Tom Price was corralling a small group of doctors into a tiny, dimly lit conference room in a nondescript building in downtown Dallas.

It was, on its surface, another of the health secretary’s many meetings with “victims” of Obamacare — this time with some of the conservative physicians who felt the law was hurting their patients and their own bottom lines. An official readout from Price’s staff trumpeted the eight participating physicians as “witnesses” to Obamacare’s failings.

But that wasn’t Price’s only message to the doctors, according to two participants in the meeting. The health secretary also signaled he would protect the doctors from a raft of regulations that were put in motion by the Obama administration. And although Price, a former orthopedic surgeon, didn’t address specific regulations, he made clear he was listening to the physicians’ complaints about issues like Medicare payment rules and burdensome electronic health record requirements.

“He took it to heart and said, ‘Let’s see where we can get some regulatory relief for these guys, especially the small and rural practices that really need it, so we don’t lose them too,’” said Dr. John Gill, a solo-practice orthopedic surgeon who attended the Dallas meeting. “He was mostly on a listening tour, but he certainly did offer to help.”

Quietly, away from the spotlight cast on his effort to dismantle Obamacare, Price has been rolling back regulations that have been criticized by his former physician colleagues. And, unlike with the ACA, he has been able to do so without the blessing of Congress.

He’s given an American Medical Association committee even more power over how much the federal government pays for different medical services. He has pitched retroactively reversing certain Medicare rules to ensure some physicians no longer face penalties they would otherwise have had to pay. He has proposed using almost $1 billion in savings that would be achieved through cuts to certain hospital payments to boost spending on physicians.

And over and over again, he has delayed Obama-era regulations that would have penalized doctors who aren’t ready or able to move away from Medicare’s longstanding “fee-for-service” approach.

“The ACA and other things that came out in the last five years made life for small physician practices substantially harder, and I think Tom Price signaled when he was being confirmed that he wanted to roll that back,” said Dr. Ashish Jha, a Harvard professor of health policy. “And he’s been carrying through with it.”

Doctors — many of whom have been vocally opposed to the efforts to repeal Obamacare — are over the moon about the steady drumbeat of regulatory rollbacks. Though they have mixed views on plans to change the way Medicare pays doctors, officials representing close to a dozen different physician and specialty societies applauded many of the regulatory changes proposed so far this year.

“We’re not used to having wins, and all of a sudden we’re getting these rules where a lot of what we asked to have happen is happening,” said one physician industry official, speaking on condition of anonymity to speak candidly.

Price’s HHS has not been nearly so kind to the other major industry over which his agency has broad authority: hospitals.

As his administration has handed doctors “wins,” it is also proposing a major cuts to certain hospital payments. One proposal takes an Obama-era cut to Medicare payments for services provided in outpatient departments — and slashes it even further. Another would severely cut into a payment program that was originally aimed at steering extra funds toward hospitals that serve low-income populations.

The administration said the former change would level the playing field and “encourage fairer competition” between physicians and hospitals.

It’s perhaps not surprising that such proposals would be backed by a former surgeon — even one who spent most of his career working in a hospital setting. There’s a natural tension between bigger health systems and the doctors who work within them, and Price has long leaned toward the latter in his policy work.

As the congressman for Georgia’s 6th District, Price made no secret of his strong relationship with doctors and their specialty societies. He fought for industry wish-list items like malpractice reform and a legislative change to let doctors charge Medicare patients higher prices.

Doctors rewarded him in turn. Health care providers and groups like the AMA and the American Academy of Orthopaedic Surgeons together donated nearly $500,000 to Price’s 2016 campaign and leadership committees, according to the Center for Responsive Politics’s OpenSecrets website.

An HHS spokeswoman disputed the characterization of Price’s regulatory efforts as predominantly advantaging doctors, but agreed that he has focused on regulatory relief and uniquely believes in the importance of the doctor-patient relationship.

In many ways, Price’s regulatory changes represent a return to an earlier time. The Obama administration spent its final years trying to usher in a sleeker and more modern health care system — one centered on the use of electronic health records and focused on connecting the clinicians who oversee patient care across teams and entire hospital systems. It was driven by the belief that doctors should be rewarded for thoughtful, high-quality care — not for cranking out procedures in a “fee-for-service” system.

Price is ready to slam the brakes. At the center of his efforts are doctors like Dr. Craig Callewart, who also attended the meeting in Dallas — a fellow orthopedic surgeon with a solo practice who admits he still relies on paper medical records much of the time, who wants to practice the way he always has. Price knows doctors like Callewart aren’t ready for the kinds of systemic changes that Obama envisioned (or the regulatory oversight that comes with them), and he is working hard to make sure they don’t have to make them — or face the penalties they might have otherwise borne.

“The best-case scenario, you could say, they’re on autopilot. The worst case, they’re delaying and unravelling payment reform,” said Tim Gronniger, a fellow at the Brookings Institution who helmed the Obama administration department that oversaw these Medicare issues. “There are a lot of doctors who think all that is over because Tom Price is in charge now.”

In one of his first acts as secretary, Price took aim at a bipartisan 2015 law overhauling the way Medicare pays doctors. The law — referred to by its acronym, MACRA — gives bonuses to doctors who do an especially good job at certain activities like using electronic health records, coordinating care, or improving patient safety. Those who don’t get hit with penalties, which ramp up over time.

Price voted for the law in Congress, as did many of his Republican colleagues. The AMA and other physician groups supported it, largely because the package also eliminated a different payment program that they had been fighting for nearly two decades.

Since then, however, the AMA and other physicians groups have warned that many doctors — especially those in solo or smaller practices, who lack the extra staffing that bigger groups enjoy — aren’t at all ready for the extra regulations and paperwork that come with the law. The Obama administration answered that call last year, offering a relatively broad exemption that would keep as many as 800,000 doctors out of the program.

Price took it a step further this year, broadening that exemption to another 134,000 physicians in a June proposal. His agency said the change will give doctors more time to get used to the wave of changes that the law ushered in.

“We’ve heard the concerns that too many quality programs, technology requirements, and measures get between the doctor and the patient,” Seema Verma, the administrator of the Centers for Medicare and Medicaid, said in a statement unveiling the proposal. “That’s why we’re taking a hard look at reducing burdens.”

Doctors and hospitals that were already preparing for the changes, however, warn that the slower approach will hurt the broader effort to change Medicare so it is rewarding doctors for the quality of the care they provide, not the quantity of procedures they perform. It will likely mean more taxpayer spending on the Medicare program — and it will mean fewer and smaller bonuses for those who do participate in the program.

“How do you say to these systems who’ve been playing ball, doing what the government has asked for 10 years, ‘Oh, actually your investment doesn’t matter, we’re going to ignore it and reward people who didn’t make that investment’?” asked Mara McDermott, the vice president of federal affairs for CAPG, which represents physician groups that have moved more aggressively away from fee-for-service payments.

Under Price, HHS is also retroactively helping doctors who face penalties next year under an outdated Medicare program to avoid them. That program operated on a two-year delay — so a doctor who didn’t do enough to coordinate care, improve patient safety, or use electronic health records in 2016, for example, should have been penalized in 2018. Under a new proposal, however, doctors who failed to meet those targets will escape penalties as long as they made some smaller progress toward those goals.

HHS said it wants the rules of that program to be “simpler, more understandable, and more consistent” with the new program outlined in the 2015 Medicare overhaul, MACRA.

The agency wants “to be responsive to the concerns of the clinician community,” it wrote in the proposal.

That proposal, like several others unveiled by Price, will not be finalized until industry officials and the public have some time to comment on the policy.

The regulatory changes backed by Price are about more than avoiding penalties. He has promised that his administration, unlike the previous one, will accept the recommendations of an AMA committee that lets physicians themselves decide how much Medicare should pay them for individual services.

The controversial and secretive committee lets doctors fight out among themselves whether to pay a certain specialty less or more, as procedures become less time-intensive or less expensive (or more so), despite what critics say is an obvious conflict of interest. The AMA and many specialty societies have defended the panel, saying doctors know best which services are most complicated.

The Obama administration, more than most, made its own determinations about the payments, albeit with the committee’s guidance.

“CMS is proposing the values for individual services that generally reflect the expert recommendations from the [committee] without as many refinements as CMS has proposed in recent years,” the new administration said openly in a press release.

It’s a major concession to doctors and especially specialists, who perform more of the procedures that some primary care doctors have suggested are overvalued.

“The idea they would tell staff to just leave the [panel] alone is a concession to physicians, and in particular, physicians like orthopedists,” said Dr. Bob Berenson, an internist and a fellow at the Urban Institute, who has been critical of the committee. “The specialties that do procedures do very well with these misvalued codes, like orthopedists.”

Doctors, hospitals, and other health professionals are quick to point out that the industry itself is still pushing toward the future — they’re just doing so with less pressure from the federal government. Price, too, has held his own listening sessions with groups that are especially focused on the payment change efforts and has signaled an interest in finding new models to pay different specialty groups under arrangements that are more focused on quality of care.

“Momentum is continuing, and this is driven not just by what’s going on in Medicare and HHS programs, but private sector’s concerns about cost and finding new opportunities to improve health,” said Dr. Mark McClellan, a Duke professor and former CMS administrator, said. “The fundamentals are still there, I just think this administration’s going to play it out in a different direction.”

HHS, moreover, may just be getting started in its work to improve Medicare for physicians. Attached to nearly everything the agency has released this year has been a very straightforward request to doctors, hospitals, and other health care stakeholders: Tell us what regulations you want us to nix.

Doctors have already proposed a long list of changes. Hospitals, too, are eyeing the request with hope that they, too, can start to enjoy some of the regulatory rollback.

Because Price and Verma haven’t articulated their own vision, however, physicians, hospitals, and their lobbyists have greater opportunity to propose their own reforms, Gronniger, the Brookings fellow said.

“If you are too open-ended, you don’t get good suggestions,” he said. “All of the specialty societies and provider groups come in with long wish lists, and anything that has ever bothered them about Medicare is on the table, no matter how unrealistic.”

Industry officials, however, said the request for proposals is a good-faith effort to improve the Medicare system — but that it’s just had to take a back seat until now.

“They’re really dealing with health care reform legislation right now. They have some other priorities, but what they want to do is impacted by this legislation, whether it passes or doesn’t,” said Nick Schilligo, vice president of public policy at the American Osteopathic Association. “But in the meantime, what they’re doing is listening to concerns so that when that phase of the process starts, they’re ready to roll.”