The American Medical Association (AMA) is the largest physician organization in America, with 215,854 members in 2010, which represents approximately 20 percent of U.S. physicians. The AMA’s stated mission on its website is, “to help doctors help patients…by uniting physicians nationwide to work on the most important professional and public health issues.” In 2010, the AMA supported H.R. 3590 — the “Patient Protection and Affordable Care Act” (P.L. 111-148) — commonly referred to as the Affordable Care Act (ACA). The AMA’s primary reasons for supporting the ACA were the legislation’s attempt to achieve comprehensive health system reform by increasing access to high-quality and affordable care while reducing unnecessary costs. However, the AMA’s support for the ACA was not unequivocal and the organization did express concerns about certain components of the legislation. Furthermore, the AMA’s support for the ACA was controversial in the physician community, and some say it caused a decline in AMA membership, which is down 5 percent in 2010 from 2009.
Michael Maves, the Executive Vice President of the AMA, detailed his organization’s position on the ACA in a letter to Senate Majority Leader Harry Reid, written just before the ACA legislation was passed (the full text can be found here: http://www.ama-assn.org/resources/doc/washington/hsr-ama-reid-hr3590.pdf). Since the passage of the ACA, the AMA has continued to voice its support for certain ACA reforms, namely those related to health insurance industry, while working to alter the laws that it opposes— primarily those that affect physician payments. The AMA outlines which specific provisions of the ACA it supports and which it seeks to change in an advocacy document entitled, “Advocating for improvements to the Affordable Care Act.” Below is a summary of the AMA’s position on the ACA, based on the numerous health reform policy documents on its website.
What Provisions of the Affordable Care Act Does the American Medical Association Support?
The Individual Mandate
One of the most controversial provisions of the ACA that the AMA supports is the individual mandate. The AMA states that it generally supports, “increasing health insurance coverage to 32 million more Americans,” and “requiring individuals to have minimum health insurance coverage or pay a penalty.” Essentially, this means that the AMA supports the individual mandate for U.S. citizens to purchase health insurance, despite the negative reception this law has received amongst many Americans, particularly conservatives.
Health Insurance Market Reform
The AMA seems to most fervently support those aspects of the ACA that reform the health insurance market. In 2009, Michael Maves wrote that the AMA, “support(s) the provisions of the bill that: reform the health insurance market to provide more choice and access to affordable coverage for individuals and small businesses, including provisions relating to guaranteed issue, guaranteed renewability, modified community rating, pre-existing condition limitations, nondiscrimination based on health status, adequacy of provider networks, and transparency.” These reforms include:
- Making health insurance more affordable for families and small businesses through the creation of state health insurance exchanges and the provision of sliding-scale premium tax credits and cost-sharing subsidies
- Health insurance market reforms to address abuses of the health insurance industry
- Preventing denials of care and coverage, including those for pre-existing conditions
- Stronger patient protections
Accountable Care Organizations (ACOs) - (See FAQ on ACOs)
An Accountable Care Organization (ACO) is a network of providers—including primary care doctors, specialists, hospitals, and home health care services— that agree to work together to better coordinate the patients’ care. Providers are rewarded financially if they can slow the growth in health care costs, while maintaining or improving quality of care. The AMA supports these new payment and delivery models, which enable a wider range of physician-led practices. However, ACOs are only in the initial phases of development, and many issues related to ACOs operation and implementation remain. Nevertheless, the AMA is supportive of the initiative and its recent policy position paper on the ACA stated that the AMA is, “working closely with government agencies to address key issues, such as financing mechanisms, governance, use of quality measures, beneficiary attribution, risk adjustment, distribution of shared savings, and anti-kickback and antitrust barriers.”
What Provisions of the Affordable Care Act does the American Medical Association Oppose?
Physician Quality Reporting Initiative (PQRI)
A Physician Quality Reporting Initiative (PQRI) was established under the 2006 Tax Relief and Health Care Act (TRHCA). The program provides an incentive payment of up to two percent for physicians who report data on 131 quality measures for services to Medicare beneficiaries. In 2010, the ACA renamed the initiative the Physical Quality Reporting System; the legislation also changes incentive payments, reducing them from a maximum of 2 percent to .5 percent beginning in 2012; penalizes physicians who do not participate in the PQRS with a 2 percent penalty; establishes a Physician Compare website; creates provisions to ensure timely feedback to physicians on their quality, and establishes an informal appeals process. The AMA has stated that it, “opposes mandatory PQRI participation or the imposition of penalties on physicians who do not successfully participate. Based on physicians’ experience with the PQRI to date, this program is fraught with administrative problems that have made it extremely difficult to assess whether a physician has successfully participated.” As a result, the AMA fought the implementation of the ACA’s new PQRI requirements, and was successful in postponing the penalties for failure to report quality data from 2013 to 2015. The AMA has stated that it will continue to oppose physician penalties until they are eliminated.
Restrictions on Physician-Owned Hospitals
The ACA prevents new physician-owned hospitals from participating in Medicare and limits the growth of existing physician-owned facilities. The rationale for such restrictions is that physician-owned hospitals tend to focus on lucrative specialties, leaving important but money-losing services, such as emergency departments and burn units, to community hospitals. For example, “a 2005 report by the Medicare Payment Advisory Commission, which advises Congress, found that inpatient care at a handful of physician-owned surgical hospitals was 14 percent more profitable than at competing community hospitals where patients were sicker.” The Congressional Budget Office therefore estimates that the restriction on physician-owned hospitals will save Medicare $500 million over 10 years. While the AMA supports that physician-owned hospitals be required to report their ownership and investment information, it opposes restricting hospital ownership and banning physician-owned hospitals from Medicare eligibility. The AMA blocked previous restriction attempts in 2003, and has since supported legislation to repeal this provision.
What is the American Medical Association's Position on Medicare Reforms in the Affordable Care Act?
The ACA included numerous reforms specific to the Medicare program and that therefore affect those physicians who participate in Medicare. Some of these reforms generated savings from the Medicare program, which Congress intends to use to fund other components of the ACA legislation. While the AMA generally supported improvements to the Medicare payment system, some physicians expressed concern about how savings would be generated and whether payments to Medicare physicians would be affected.
ACA Medicare reforms that the AMA Supports:
- Medicare bonus payments for primary care physicians and general surgeons
- Increasing geographic adjustments for Medicare physician payments
- Improving Medicare prescription drug benefits by reducing the coverage gap (i.e., “donut hole”)
ACA Medicare reforms that the AMA Opposes:
Medicare Physician Payment Formula – the Sustainable Growth Rate
One of the AMA’s major problems with the ACA is that it did not permanently address the sustainable growth rate (SGR), which sets payment rates for Medicare physicians. The SGR calculates the percentage reimbursement that Medicare providers receive, primarily based on the growth of rest of the economy. In recent years, the growth rate of Medicare spending has consistently exceeded GDP growth; therefore, the SGR is consistently being reduced. In order to avoid dramatic reductions in physician reimbursement rates, Congress passes “doc-fix” at the end of each year and essentially stalls the cut. The AMA views permanently fixing the SGR as, “critical to the goal of ensuring security, stability, and access for seniors, and to provide the essential foundation for the development of new payment models and delivery reforms.” As a result, the AMA is aggressively working to repeal and replace the SGR, and President Peter W. Carmel, MD, recently called on Congress to, “enact a real and fiscally responsible solution to this sorry cycle of scheduled cuts and short-term patches that compromises access to care for patients and drives up costs for taxpayers. Members of Congress need to use this time to work in a bipartisan manner to provide long-term stability for seniors, military families and the physicians who care for them.”
Independent Payment Advisory Board (IPAB)
The ACA establishes an Independent Payment Advisory Board, comprised of 15 members appointed by the President and confirmed by the Senate, whose job will be to recommend savings in the Medicare program with fast track congressional approval procedures. The IPAB’s recommendations with be binding—meaning that recommendations will quickly move to Congress for consideration; if Congress does not act in the required timeframe, the Secretary is required to implement IPAB’s recommendations on a fast-track basis. This is one of the most contested creations of the ACA, as physicians and hospitals worry that it puts important payment and policy decisions in the hands of an independent and unelected body— essentially giving the IPAB too much authority. The AMA’s primary concern is that IPAB will replace the SGR and in doing so will, “mandate payment cuts for physicians, who are already subject to an expenditure target and other potential payment reductions under the Medicare physician payment system.”
The AMA’s concerns are not entirely unfounded, considering that the CBO projected that the IPAB would produce $16 billion in Medicare savings over 10 years. Yet, exactly where and how the IPAB will find such savings remains unclear. Therefore, the AMA is seriously challenging IPAB’s authority and framework, opposing its creation and advocating for its repeal prior to implementation of the first IPAB recommendations in 2015. Thus far, the AMA has supported legislation by Representative Roe (R-TN) and Senator Cornyn (R-TX), H.R. 452 and S. 668, respectively, to repeal the IPAB.
Value Based Payment Modifier
Section 3007 of the ACA requires the development and application of a cost/quality index modifier, in order to redistribute Medicare payments to providers based on outcomes, quality, and risk adjustment measures. The AMA believes that these tools are not scientifically valid or accurate, and that this provision presumes the availability of policy tools and a level of precision that do not currently exist.
Medicare Provider Enrollment Fees
The AMA opposed the imposition of Medicare provider enrollment fees on physicians and successfully advocated for the elimination of the enrollment fee for physicians, as well as eliminated a five percent Medicare payment cut for “outlier” physicians.” The AMA believes that, “given the multiple screening procedures that already apply to physicians in various licensing and credentialing processes, (the provider enrollment fee) is an unnecessary duplication of review processes and another administrative burden with the potential of further discouraging physicians from participating in the Medicare programs.”
What is the American Hospital Association's Position on the Affordable Care Act?
What Is the Pharmaceutical Industry's Position on the Affordable Care Act?
How Do Health Insurers View the Affordable Care Act (ACA)?
What Is the Sustainable Growth Rate (SGR) and How Does It Impact Physicians?
Is There More Than One Proposal to Reform Medicare?