MedPAC recommends 1% increase in physician payment for 2012

March 31, 2011

The Medicare Payment Advisory Commission (MedPAC) has recommended a 1% increase in payments for physician services in 2012 as part of its "Report to the Congress: Medicare Payment Policy."

The Medicare Payment Advisory Commission (MedPAC) has recommended a 1% increase in payments for physician services in 2012 as part of its "Report to the Congress: Medicare Payment Policy."

The report presents MedPAC’s recommendations for 2012 rate adjustments in fee-for-service (FFS) Medicare. These "updates" are based on an assessment of payment adequacy taking into account beneficiaries’ access to care, the quality of the care they receive, supply of providers, providers’ costs, and Medicare’s payments.

"The Commission’s goal is to achieve a Medicare program that assures beneficiary access to high-quality care, pays health care providers and health plans fairly, and spends tax dollars responsibly," MedPAC Chairman Glenn Hackbarth said in a statement.

In the report, MedPAC also recommended no update to payments for home health care services, as the number of home health agencies has increased to an all-time high and Medicare’s payments have exceeded their costs by nearly 18% percent.

MedPAC said policies affecting the level and distribution of payments to providers may not always be enough to achieve its objectives. In some cases, recommendations may also be warranted to guard against fraudulent or abusive practices.

The commission said it recognizes that managing updates and relative payment rates will not solve the fundamental problem with current Medicare FFS-that providers are paid more when they deliver more services without regard to the quality or value of those additional services. Therefore, these update recommendations should be considered in the context of MedPAC’s many prior recommendations to move beyond FFS to more comprehensive payment systems that would cross sectors and pay for higher quality (eg, medical homes, re-admissions penalties, and pilot testing of bundled payments).

The entire report is available online at http://medpac.gov/documents/Mar11_EntireReport.pdf.