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Experts See Challenges in New Medicare Payment System for Physicians

As part of the Physician Value-Based Payment Modifier program set to start in 2015, Medicare last month sent out "resource use" reports to 20,000 physicians showing their patients' average health care costs and quality of care, the Kaiser Health News/Washington Post reports.

The reports -- sent to physicians in Iowa, Kansas, Missouri and Nebraska -- also provided cost and quality comparisons with other physicians.

About the Program

The program is part of an effort under the federal health reform law to give higher payments to Medicare physicians who provide high-quality care at lower costs and lower payments to physicians who do the opposite. The government will select physician groups and some specialists as initial participants, but by 2017 the program will include most Medicare physicians. CMS, which still is working on the details of the program, intends to base 2015 payments on care provided in 2013.

The Physician Value-Based Payment Modifier program coincides with other payment reform efforts, including basing Medicare hospital payments on quality and the movement to encourage hospitals, physicians and other care providers to form accountable care organizations.

Expected Challenges in Assessing Care

Experts say that accurately assessing the care physicians provide will be difficult, in part because physicians care for fewer patients than hospitals. In addition, to be accurate, the assessment must look not only at the cost of care a specific physician provides, but also the cost of care by other providers a patient visited, either through a referral by the original physician or because the original physician did not provide adequate care.

Further, the assessment will have to account for patients' health, otherwise physicians could opt to not provide certain services or avoid more costly care as a way to receive bonuses, according to KHN/Post.

Dana Gelb Safran, who oversees quality measurement for Blue Cross Blue Shield of Massachusetts, said CMS likely will not evaluate individual physicians, but rather providers as part of groups. She added, "There really are very few measures that we can reliably evaluate on the individual doctor level. When they move forward with the value-based modifier, there is going to have to somehow allow physicians to identify other physicians with whom they say they practice and who they say that they share clinical risk for performance."

Possible Model

If the program proves successful, private insurers eventually could follow Medicare's lead, benefiting from physicians being accustomed to a new payment structure through the Medicare program, according to Paul Ginsburg, president of the Center for Studying Health System Change (Rau, Kaiser Health News/Washington Post, 4/14).

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