Of Gypsies and Gaffs

By Barry B. Sheppard, M.D.

The Tale of a battle that may be lost

before you even know of its existence.

When I was a much younger man, the term Gypsy brought to mind romanticized visions of a nomadic people able to tell fortunes and work small magics. And Gaffs were very large and wicked-looking hooks mounted on the ends of poles used to land the sharks my father and I sportfished off the coast of South Carolina. For the past few weeks, however, I have become embroiled in a struggle involving GPCIs and GAFs of a very different nature. To emphasize the point that this is my own, and therefore biased, account of the situation as well as to allow for some blurring of the identities of the players, I have set this tale to paper in the form of a Grimm’s fairy tale—the grim part being apropos as well.

 Once upon a time, about seven years ago, a wicked Queen, later to be known as the Centers for Medicare and Medicaid Services, sent out a decree across the fair land of California. The land was to be divided into regions on the basis of similar expenses incurred in providing health care to the people in an effort to adjust for, to some extent,  widely varying office rents, employee reimbursement levels, etc. in the various regions of the state. Each resulting Locality would then be assigned a GPCI (Geographic Practice Cost Index), which had the power to transform itself into a GAF (Geographic Adjustment Factor); and each GAF had the power to alter the Medicare gold that funneled through the office en route to physicians. The piles of gold, when touched by the GAFs, would be adjusted heavier or lighter depending on the cost of practicing medicine in each region. Each GAF, however, only had a single spell and thus each pile of gold entering a particular locality was adjusted to the same amount for all the GAFs in that locality. Even though the system was designed to correct inequities of cost incurred by physicians, the amounts of gold were so miserly that no one in the kingdom was happy.

 In setting up the localities, however, the wicked Queen was not diligent in her duty. She began by carefully measuring and sifting through regional differences in cost of practice and established six counties as rightfully having their own locality. She then lumped two similar counties into a seventh locality. Beginning to tire of the tedium of the process, she lumped three counties into one locality, Locality 3, despite a significant cost difference in one county from the other two. Looking at the daunting number of counties still to be apportioned, she threw up her hands in disgust and lumped all 47 of the remaining counties into one locality, Locality 99.

 Soon afterward, four of the 47 in Locality 99 realized that their costs were significantly more than the costs of their fellow counties in that locality. However, try as they might over the ensuing years, they could not escape the locality. One well-conceived plan was stymied by Parliament largely because of opposition from the other 43 counties that benefited from GAF-averaging with the “high-cost” counties. The 43 were fully aware that the GAF for the remaining counties would by necessity be lessened if the four were allowed to leave. Eventually the four grew to be 10 counties in which it was measurably costlier to provide health care than in others of the same locality. One of these was of the three-county locality, Locality 3, and the remaining nine were in Locality 99.

 Despondent over their inappropriately low reimbursement and knowing that any attempt to leave would likely be voted down by the counties benefiting from the 10’s continued captivity, they devised a desperate yet ingenious plan. For you see, the eight counties content with their locality and wholly unaffected by any decision to continue or not to continue averaging GAFs in localities 3 and 99, were, with good reason, not in attendance at the councils convened to correct the GPCI inequities. The deadlocked 50 from localities 3 and 99 conveniently devised a solution whereby the eight would be billed for the “expense” incurred by freeing the 10 seceding counties.†

 The rationale behind this was a view that could only be reached by upending reason on its axis. Rather than view payments over prior years as overpayments, which in actuality they were, the 40 counties destined to be “left behind” decided to view those payments as their “due” and viewed any diminution of them as a “cut.” Completely unswayed by reason, they viewed the more-generous offsets paid by CMS to the eight large urban counties, not as leveling adjustments for higher rents, salaries, etc., but rather as undeserved “windfalls” that could therefore be taxed to prevent a downturn in their own reimbursements.

 Not surprisingly, since none of the counties harmed were represented in the council meetings, and everyone who was represented stood to gain from the solution, i.e. the 10 counties would be freed and the 40 would be shielded from the cost associated with that exodus, the solution garnered widespread support in the council as the “best solution.” This “best solution” was then railroaded past any objections by the eight counties most negatively impacted and presented to the wicked Queen, who had gleefully watched the internecine battle.

 Judging this solution to be unfair because of its resulting denial of monies rightfully directed toward the physicians in higher-cost areas, the barons of four of the eight urban counties openly contested the proposed plan. They demanded that a special session of Parliament be called to consider this since the “solution” had circumvented consideration by that body. And to this very day, those barons and their knights fight a rising tide of innuendo, slander, coercion, and threats in an attempt to protect payments for their vassal physicians. The ultimate outcome, however, appears grim for the embattled four.

 At stake for San Mateo County is a paring down of the intended, fairly calculated 6.3 percent upward adjustment for next year, calculated on cost of practice in this county, to a 5.5 percent increase, which will be the case if San Mateo County is forced to shoulder some of the cost of freeing the 10. It has been my view, as well as the unanimous view of the SMCMA Board of Directors, that the GPCI adjustments by CMS were designed to level the playing field for those of us in this county who face practice-breaking rents and employee reimbursement levels.

We acknowledge that all Medicare reimbursement is inadequate but to tamper with the equation by placing a permanent “donation” from certain counties to avoid an appropriate, negative adjustment in others only sets a permanent inequity into play in attempting to right a prior wrong. This seems illogical, if one accepts the tenets of the GPCI adjustment, and if one doesn’t accept the tenets of the adjustment, then why have it at all?                                          

Footnote: † This initial ploy that volunteered no pay-in by the 50 was later softened to a statewide assessment only after legal counsel advised that the first solution would likely meet legal obstacles because of its selectivity (read unfairness).

Note:

If readers prefer to learn about this complicated issue outside the fairy tale genre, turn to Page 14 for an interpretation by H. Rex Greene, M.D., SMCMA Board of Directors.