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The Medicare Patient Empowerment Act: Where does consumer-driven health care fit within health care reform?

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

Recently, there has been an increased level of focus on rethinking health care delivery and payment policy.  This has manifested in a variety of innovative population-based payment and delivery models, including the promotion of the Medicare Shared Savings Program (MSSP) and numerous commercial payor and physician initiatives (e.g., Physician Group Incentive Programs from commercial payors such as Blue Cross Blue Shield). 

While these initiatives entail fundamental shifts in the delivery and payment of health care involving providers and payors, these programs take time to develop and produce measurable data about their impact on patient care, better health for populations, and decreasing expenditures (also known as the three-part aims of the MSSP). 

 

Concurrently with these programs, there are other initiatives that are also gaining traction that purport to achieve the goals of the MSSP and similar programs by focusing on the relationship between providers and patients.  Case in point, the Medicare Patient Empowerment Act is a bill currently before the House Ways and Means Committee that proposes to permit private contracting between physicians and patients for services.  The bill would allow patients to receive care from any physician, regardless of whether the physician participates in the Medicare program.

Current Medicare participation restrictions impose severe penalties on physicians who enter into private contracts with patients.   The rules require a physician who elects to privately contract with a patient for a service to “opt out” of the Medicare program for a minimum of 2 years.  Additionally, patients seeking care from physicians who do not participate in the program are at risk of receiving non-coverage decisions from the Medicare program, even for services that would otherwise have been covered had the patient seen a physician who participated with the program. 

The Medicare Patient Empowerment Act proposes to relax these rules by allowing patients to privately contract with physicians of their choice and negotiate a payment amount for services.  Patients would still be eligible to be reimbursed by the program for services in the amount Medicare would normally pay for services rendered by a participating physician.  Physicians electing to contract with patients, on the other hand, would only opt out of Medicare reimbursement for that patient, and would be able to continue as a Medicare participating physician with respect to other patients.  The bill also includes patient protections, including the prohibition of private contracting when a patient is facing an emergency medical condition or an urgent health care situation (in those cases the terms are defined as consistent with existing Medicare policy).

The bill has received strong support from the AMA and various national and physician professional associations.  Supporters of the bill argue that strict Medicare participation restrictions and deep cuts to reimbursement are increasingly forcing physicians to stop accepting Medicare patients.  Patient flexibility to freely contract with physicians for their health care would promote patient-centered care by providing patients with more choice of physicians. 

Conversely, opponents of the bill argue that private contracting between physicians and patients continues to incentivize quantity of care (over quality) and will only result in health care costs being shifted to patients.  In this debate, the question for policy makers and regulators concerns whether initiatives to reform delivery systems, which focus on the relationship between payors and providers, will include revising longstanding restrictions on how patients and physicians interact with each other. 

Adil Daudi can be reached Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004-1206; 202-942-6035; email: Adil.Daudi@aporter.com

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