Proposed Consent Agreement In the Matter of Roaring Fork Valley Physicians I.P.A., Inc., FTC File No. 061 0172
Why would any reasonable business person want a contract tied to the Medicare Fee Schedule? The fee schedule does not historically keep up with the rising cost of providing medical care -- so each year a physician's margin when accepting medicare-tied contracting goes down. Private contracts tied to a percentage (%) of Medicare fees only track the Medicare fee schedule -- regardless of whether the Medicare Fees go up, down, or stay the same -- and when Medicare fees go up, they often do not keep up with the cost of inflation. The SGR formula to determine the Medicare fee schedule is flawed and leads to a slow erosion of the payments to physicians compared to the cost of providing that care. As can be witnessed by the recent problems with the impending medicare fee schedule cut that has built up over the last 10-15 years (21% cut!) and Congress' inability to fix the formula. http://www.modernhealthcare.com/article/20100211/NEWS/302119954 http://www.fiercehealthcare.com/story/medicare-payment-cut-provision-rem... http://www.medscape.com/viewarticle/716946 It makes no business sense to tie your private insurances to a Medicare fee schedule that has historically not kept up with inflation and if the fee schedule goes down -- your private insurance contract fees will go down too -- and therefore, they won't keep up with inflation either. Here are examples of how Medicare doesn't keep up... http://www.ama-assn.org/ama1/pub/upload/mm/380/cfhistory.pdfPage 32 at... http://www.oregon.gov/OHPPR/OHREC/Docs/Presentations/JeaneneSenComm03_06... wouldn't expect our local grocer to tie his/her prices to a fee schedule that is constantly threatened to go down (unless an act of Congress happens each year) and even when the fees go up - doesn't keep up with the cost of offering the grocery items. The whiff test for whether tying a contract to the Medicare Fee Schedule is a good idea might include -- would FTC employees be willing to tie their salaries to the Medicare Fee Schedule and it's historic ups and downs? If they are good business people - I bet they wouldn't.