Lawmakers, doctors advocate Medicare payments based on quality

By Andrew Hedlund -- Medill News Service  |  May 7, 2013 at 5:51 PM
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WASHINGTON, May 7 -- Medical practitioners and experts offered ideas to legislators Tuesday on how to alter the Medicare physician payment formula, something that continually plagues the medical community.

Operating on a fee-for-service payment model, Medicare doctors receive income based on the number of tests run, which critics argue is not the best way to encourage quality care. The doctors providing testimony told members of the House Ways and Means Subcommittee on Health it was time to change that.

There is a bipartisan consensus that the reimbursement structure needs a permanent solution.

“The current fee-for-service payment system treats all services the same,” said Subcommittee Chairman Kevin Brady, R-Texas. “It fails to take into account the quality of the care provided or how efficiently that care was furnished.”

The committee’s ranking member, Rep. Jim McDermott, D-Wash., echoed this idea, proving this provides some of the little common ground that exists between the two parties.

“We need a policy that rewards quality, not just quantity,” he said. “We need a policy that incentivizes team-based, coordinated care, with a strong primary care component.”

Commonly known as the “doc fix,” Congress has delayed steep Medicare cuts each year since 2003. Because of a deficit reduction efforts in the late 1990s, payments for this entitlement program are tied to gross domestic product growth rather than increases in health care costs, leaving clinics facing potential shortfalls because medical costs have grown much quicker.

The Affordable Care Act addresses this in part. Come 2015, Medicare payments will begin to quality of care as well as cost.

Aside from possibly encouraging doctors to run more tests or do more procedures than necessary, Dr. Patrick Courneya, a medical partner at HealthPartners Health Plan, said smaller clinics are at a disadvantage. Before a position with his current company, he worked at a small, 13-physician private practice in Minnesota.

“I think that those small communities,” he said, “with one or two physicians are the most burdened by the fee-for-service system,” adding that it “makes their business model hard to sustain.”

Courneya does not believe this would be the case if the quality of care provided were factored into the reimbursement model. He cited an anecdote from his time at the small practice.

While there, Courneya noticed shortcomings in care being provided. As a result, his practice made a simple change that paid off.

“(We) used very simple tools to track and follow up with them after they left the office,” he said.

Reps. Allyson Schwartz, D-Pa., and Joe Heck, R-Nev., introduced legislation in February aimed at repealing the “sustainable growth rate.” The bill would also instruct the Center for Medicare and Medicaid Innovation to conduct testing on different reimbursement models in three different geographic locations.

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