Pay for performance plan viewed warily by physicians


Washington--The federal government is considering a new, revolutionary method of reimbursing physicians for Medicare services that could ultimately replace the current system that many complain is filled with inequity.

It's called "pay for performance," and it would pay Medicare physicians based on how well they perform, both in terms of patient outcomes and the cost of achieving those outcomes. It's being developed within the Center for Medicare Management (CMM) at the Centers for Medicare & Medicaid Services, and already has been the subject of hearings on Capitol Hill.

Not surprisingly, the concept is being met with skepticism and concern by physician groups, including AUA. William F. Gee, MD, chair of AUA's Health Policy Council, told the House Ways and Means Health Subcommittee that the plan, as proposed, could cause serious difficulties, particularly for smaller practices.

Ten multispecialty physician groups in communities across the nation are participating. Groups will continue to be paid on a fee-for-service basis, but will be able to earn performance-based payments for implementing care management strategies that anticipate patients' needs, prevent chronic disease complications, avoid hospitalizations, and improve the quality of care, Kuhn said. The payment will be derived from savings achieved by the physician group and paid out, in part, based on the quality results, which CMS will assess.

"Providing performance-based payments to physicians has great potential to improve beneficiary care and strengthen the Medicare program," Kuhn said.

He said the Medicare Care Management Performance Demonstration will provide performance payments for physicians who meet or exceed performance standards in clinical delivery systems and patient outcomes, and will reflect the "special circumstances" of smaller practices.

Participating practices will receive technical assistance from the Quality Improvement Organizations in their areas, as well as bonus payments for achieving the project's objectives, according to Kuhn.

Recognizing the potential for information technology to improve the quality, safety, and efficiency of health care services, Kuhn said CMS has launched the Doctors' Office Quality-Information Technology (DOQ-IT) pilot project. Through it, CMS is exploring the adoption and effective use of IT by physicians' offices to improve quality and safety for Medicare beneficiaries.

Concerns about program Why would there be concerns about all of this? After all, as Glenn M. Hackbarth, chairman of the Medicare Payment Advisory Commission (MedPAC), said, Medicare still pays its health care providers without differentiating on how well they perform.

"Providers who improve quality are not rewarded for their efforts," he said. "In fact, Medicare often pays more when poor care results in unnecessary complications. The incentives of this system are neutral or negative toward improving the quality of care."

But Dr. Gee and the Alliance of Specialty Medicine, a group of 13 specialty societies including AUA, have detailed for Congress some very specific concerns about the idea, pointing out that anything that could reduce reimbursement levels further, at a time of skyrocketing liability insurance costs, is simply untenable.

"With our physicians facing over 30% reductions in Medicare reimbursement from 2006 through 2013, compounded by exorbitant liability premium increases, many of these specialty physicians are reconsidering their Medicare participation status," Dr. Gee said.

MedPAC has proposed that the pay for performance programs should be "budget neutral," meaning that higher payments for those doctors who qualify for them would come at the expense of those physicians who do not. Second, physician groups also have serious concern about the cost of implementing IT systems in smaller practices in order to report results to the feds, as well as a lack of appropriate reporting mechanisms.

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