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Should "site neutrality" -- the idea of paying the same rate for the same service no matter where it is provided -- be applied when it comes to setting Medicare payment rates? Nope, says Medicare Payment Advisory Commission (MedPAC) member Lynn Barr, MPH.

"I don't think 'site-neutral' is neutral," Barr, of the Barr-Campbell Family Foundation in Incline Village, Nevada, said Thursday at MedPAC's monthly meeting. "I'm not convinced that we've really done enough [research] on the value of the services at different locations. If I have a severe cancer, do I go to a freestanding oncology group? Do I go to a cancer center? Do I go to an academic medical center? I'm going to have very different outcomes and very different options based on those choices ... I am quite sure I don't get the same value with a PCP [primary care provider] visit at a freestanding clinic as one that's attached to a hospital that has put in quality reporting and processes and oversight."

But Brian Miller, MD, MPH, of Johns Hopkins University in Baltimore, disagreed. "Updates [to promote] site-neutral payments is sort of a 'must do,' especially since a lack of site-neutral payment drives untold billions of dollars in expense every year, much to the detriment of the fiscal solvency of the Medicare program and also at increased cost to the beneficiaries themselves without a clear metric for improved quality or outcomes," he said.

Site neutrality was just one of four ideas the commissioners discussed for reforming Medicare provider pay over the long term; adding a regular inflation adjustment was another. "It just feels like an obvious thing to do," said Stacie Dusetzina, PhD, of the Vanderbilt University School of Medicine in Nashville, Tennessee. However, data presented at the meeting by MedPAC staff "shows us that that's not the full picture, and that volume and intensity is really another important part of this ... I'm very much in favor of adding an inflation fee, but also trying to rein in some of the volume and intensity issues."

If Medicare adds an inflation adjuster, everyone should be aware that staffing costs are a large part of physician practice expenses, said Betty Rambur, PhD, RN, of the University of Rhode Island in Kingston. "If we tie something to inflation that is supposed to go to people, it should actually go to the people," she said.

"What's most appealing to me is the indexing of the payment rates to some sort of inflationary factor," said Robert Cherry, MD, of UCLA Health in Los Angeles. "It does make a lot of sense, particularly this inflationary cycle that we currently are in. There's numerous examples of how this is already done in areas like Social Security, where there's a 'cost of living adjustment,' and local communities that have applied rent stabilization measures that are based on local inflation ... I definitely favor studying this and coming back with options."

Jonathan Jaffery, MD, of the Association of American Medical Colleges in Washington, warned against being too complacent about how few Medicare beneficiaries are reporting difficulty accessing providers. "It's still pretty anathema to most physicians to think about not taking Medicare patients, but you know, there could come a point where that issue gets forced, and once practices stop taking them it's going to be too late to fix it," he said.

Noting that 8% of beneficiaries reported trouble accessing care last year, Jaffery added, "8% is I guess small compared to [the other] 92%, but it's still 1 in 12 beneficiaries and more than 5 million people."

MedPAC members also discussed increasing incentives for clinicians who participate in advanced alternative payment models (AAPMs). Getting doctors to participate in AAPMs "is a rational thing to do, but I don't think it's a rational thing to do forever," said Lawrence Casalino, MD, PhD, of Weill Cornell Medical School in New York City. "At a certain point, the reward for being in an AAPM should be delivering better care because you do it so well, and while you're spending [money], you're getting your investment return and a bit more. Just giving 5% a year more -- or any percent a year more -- forever, doesn't make sense to me."

Putting a cap on overall Medicare spending was another idea under consideration, but several commissioners agreed that it was a bad idea. "Just trying to put a cap at a huge macro level doesn't work; it's the wrong tool," said Scott Sarran, MD, of Triple Aim Geriatrics in Cook County, Illinois. Miller said such a limit "would be hard to do operationally."

Casalino expressed disappointment that overvalued payment codes and how to better set relative values were not discussed. "This is an area that's really important because it's a lot of money and there is a lot of discontent across specialties," he said. "It's so obviously a mess ... I think this is one area where it's not hard to come up with a rational way to approach it. Politically it's hard to change, but just for that reason, I think MedPAC should be very, very strong about reforming the relative value process."

Some observers were not happy with the way the discussion went, particularly concerning fee-for-service physician payment rates. "[Some of MedPAC's] policy recommendations to Congress have largely driven private practices out of business," Anders Gilberg, MGA, senior vice president for government affairs at the Medical Group Management Association, (formerly Twitter). (Disclosure: Gilberg is a member of the MedPage Today editorial board.)

"Hospital systems run medical practices at a loss, but are able to cross-subsidize physician salaries by making a profit on the inpatient side while securing high margin referrals, ancillaries etc. Yet in the end, consolidation costs the system more overall. MedPAC's rationale is siloed & flawed and has created/perpetuated this problem."

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