It's been a nasty 14-year fight: a small army of California doctors against the feds.
In the end a $5 billion lawsuit against Medicare wound its way all the way to the Supreme Court. A Congressman battled colleagues -- and a contentious "Kabuki theater" drama led to an awkward standoff in a Centers for Medicare & Medicaid Services lunchroom.
But persistence finally paid off.
As of Jan. 1, 2017 thousands of California doctors will start receiving fee-for-service Medicare pay bumps between 1% and 15%, and that comes on top of any pay adjustments Medicare might otherwise impose.
Encoded in the , the GPCI (pronounced gypsy, but referencing the geographic practice cost index) fix is now law. What this means is that doctors in 15 California counties will now be paid on a scale that reflects a metropolitan rather than rural demographic.
's vice president, estimated the GPCI fix will bring around $52 million a year more to California providers who submit Part B Medicare claims. In San Diego County doctors can expect to get about half of that sum, which works out to a raise of about 1% to 1.5% per year for 6 years.
But the impact is really much greater. "In California all of the private insurance company fee schedules are tied to Medicare's," McNeil said.
, a San Diego otolaryngologist and the only physician plaintiff in the $5 billion lawsuit, said "a $1 increase in Medicare calculated across commercial plans brings $3 more in overall payment to doctors."
'Look At All Our Cows'
Since 1996, Medicare officials have insisted that urbanized, high-cost regions like San Diego County should be paid as if they were rural and low-cost, which meant fewer Medicare dollars for the roughly 7,000 San Diego physicians who bill Medicare.
"The joke among doctors was 'Look at all our cows,' " quipped , a family practitioner in San Diego, which stands to gain the most from the fix.
Other underpaid counties moving to urban pay rates -- metropolitan statistical area or MSA in Medicare speak -- include Santa Barbara, Sacramento, Santa Cruz, and Monterey.
The inequity in Medicare reimbursement might have gone unnoticed indefinitely if not for , an emergency physician in Santa Cruz, who led the charge against the feds. In his dual role as administrator of Sutter Maternity & Surgery Center of Santa Cruz and director of a medical group, he could easily see the wage and cost index used to reimburse Santa Cruz hospitals was much more generous than the one applied to Santa Cruz and San Diego physicians.
In a nutshell it was difference between an urban and rural classification. The hospitals were lucky enough to fall under the urban pay rate, while the doctors -- even the doctors who worked at that hospital -- received a rural pay scale.
This city mouse-country mouse accounting also affected Medicare pay to doctors practicing in 13 other once rural but now urban California counties.
De Ghetaldi and CMA representatives took their beef to , then CMS administrator. "Why do you use a different set of maps to pay physicians than you do to pay hospitals?" de Ghetaldi asked.
"The answer was 'we will look at it. And the answer always was 'we will look at it,' " he said.
"If Medicare's national aggregate payment to physicians is $100, San Francisco doctors get $125 while the doctors in locality 99, like Santa Cruz and San Diego get $103," de Ghetaldi said.
In 2007, de Ghetaldi's brother, attorney, filed a $3.2 billion lawsuit, later $5 billion, that sought class action status for doctors in 250 counties allegedly lumped with lower cost regions in 32 states. When Medicare's payment for physician services (Part B) was reformed in , payments were also modified to reflect regional differences. But in the decades since urban and exurban development changed many rural areas into urban zones -- changes that were not reflected in 1996, which was the last time Medicare updated GPCI regions.
The de Ghetaldi brothers, Mazer, McNeil, Santa Barbara gastroenterologist Edward Bentley, MD, and Rochelle Dornatt, chief of staff for (D-California), became so obsessed with every detail, they started calling themselves "the GPCI kings and queens," de Ghetaldi said.
They made dozens of trips to Washington to make their case to Medicare officials and lawmakers, and were frequently left waiting in chairs for appointments that were cancelled or delayed. It was time-wasting and demoralizing, to say the least, they said.
Kabuki Theater
The lawsuit seemed like the only solution. "It questioned several administrators in several presidential administrations, and said publicly, you (CMS) guys knew you were doing wrong," Mazer said. "You knew how to fix it. But you just didn't want to fix it. Year after year, the problem kept compounding. And they hurt people in the process."
One such trip was particularly exasperating, Mazer recalled. They were scheduled for a 2-day meeting at Medicare's Baltimore headquarters. "It was like going to a military compound; they had mirrors to look under our car."
By mid-morning the group sensed "about as big of a stonewall as you could get," Mazer said. "No matter what we said, they couldn't possibly do it. We were simply asking that they shift physician pay to the system they used for hospitals, to the [metropolitan statistical areas], so they wouldn't have two conflicting systems.
"It was ; that's the best way to describe it," Mazer said. During lunch, the two groups were estranged. "We sat on different sides of the Medicare building lunchroom And the question was, would we ever talk to each other again."
"That's a good description," said de Ghetaldi.
Solution after solution was offered, but Mazer said, "CMS just spit in our face and said, 'no no.'"
Ultimately, the court refused to recognize the plaintiff's class action standing and the lawsuit died.
Is This a National Problem?
The fight for a fix, was also playing out in Congress, where Farr took the battle to Congress and worked for months to line-up bipartisan support, only to be frustrated at the last minute when Rep. Bill Thomas (R-California) backed out under pressure from physicians in his own rural district.
Over the years, high level reports recognized and addressed the problem. The Urban Institute in 2004, the Government Accountability Office in 2005 and in 2007, Acumen in 2008, the Institute of Medicine in 2011 and 2012, and the Medicare Payment Advisory Commission in 2013.
Mazer, de Ghetaldi, Dornatt, and McNeil said attempts to enlist other states where urbanization has raised practice costs fell flat.
"We had so many proposals, including some that were multi-state, because there were several other states that were willing to undertake internal readjustment," Dornatt said. "But how would you pay for it?" she asked. "It would be very expensive."
"This was an issue the Ohio State Medical Association addressed in the early 1990s," said spokesman. "Ultimately, our House of Delegates did not feel a separate payment rate for specific areas of our state was warranted so they chose to adopt a policy in support of a single, statewide rate."
, executive director and CEO of the Medical Association of Georgia, said MAG considered a GPCI fix some years ago, but also thought taking some counties out of rural designation would hurt those remaining. "We've been more focused on getting the state to increase Medicaid payments," he said.
Texas also has disparities, for example counties abutting Houston, Dallas, and Austin, were rural long ago but now approach practice expenses on a par with those cities. "That's where the biggest damage is, as of the last numbers I saw," said
The TMA doesn't oppose the California GPCI fix, but isn't enamored with it either. "California got special treatment, and we have never supported special treatment," Kinney said. "We've always said CMS has a responsibility to fix locality boundaries, and that means all of them. When one state gets special treatment, everyone else suffers."
Victory Lap
Mazer noted that while he's grateful the fight is finally over, the GPCI fix will not return what doctors lost since 1996. And, he's "still ticked off" the correction requires years to fully implement.
"There's still a part of me that says, 'you guys ripped us off for years. You should give us something for that.' But it's done. We are where we are."
Ironically, he said, most doctors in counties like San Diego are unaware they'll see more money from Medicare. "It's taken so long to get here, and so long to implement." And so many other payment adjustments are in the mix.
"Most people won't recognize they're getting more. And if they do, they might not even know where it came from."
When the correction is fully implemented by 2022, "it will bring more than $10,000 in additional income per year to the average San Diego County doctor," said Tom Gehring, former San Diego County ľֱ Society CEO.
The fix will raise pay for thousands of nonphysicians too, such as nurse practitioners, physician assistants, and nurse anesthetists who submit Medicare claims.