Lawmakers Consider Bundled Payments for Medicare Providers
As congressional leaders and the administration of President Obama seek to reform the U.S. health care system, they are looking at changing the Medicare payment system, the Wall Street Journal reports.
The current system pays physicians according to each procedure they perform, which critics say creates a financial incentive for unnecessary treatments.
Alternatives, such as paying a fixed annual rate for each patient, also have been criticized because it could give providers "an incentive to withhold potentially helpful treatments," according to the Journal.
Some lawmakers have proposed bundling payments for certain treatments that involve separate billable procedures, such as implanting an artificial hip or providing several months of cancer treatment.
Medicare is running a pilot project at several hospitals in which a bundled payment is split between the hospital and physicians.
Medicare personnel negotiated with hospitals and submitted bids for the bundled payments on certain procedures, including hip and knee implants and heart bypass surgery.
Congress would be required to approve a full-scale shift to bundled payments.
HHS Secretary nominee Tom Daschle said he supports single payments based on treatments because they could lead to "better outcomes and lower cost, and far less hassle for providers."
Max Baucus (D-Mont.), chair of the Senate Finance Committee, said bundled payments could improve efficiency and encourage physicians to better coordinate patient care.
The Journal reports that some private organizations, including some insurers, have begun testing out bundled payments.
The not-for-profit Bridges to Excellence has designed an episode-based payment system in which physicians and hospitals treating heart-attack patients would receive fixed pay and could not obtain extra payment if the patient was readmitted to the hospital soon after discharge.
Despite the "enthusiasm" for bundled payments, "bringing them into widespread use in the fragmented health care world would be tricky," according to the Journal.
According to the Journal reports that physicians would be forced to give control of a large portion of their incomes to hospitals, which would be responsible for managing the distribution of bundled payments.
Lawrence Martinelli, a member of the Infectious Diseases Society of America, said the idea is "hugely worrisome." He added, "There's concern about not only how much you're going to get paid, but whether you can negotiate a contract where you can at least break even." IDSA last year wrote an open letter that said bundled payments could "limit Medicare beneficiaries' access to necessary specialty care."
In addition, a number of technical aspects would have to be worked out for bundled payments to be effective. According to the Journal, in order to discourage physicians and hospitals fromÂ treating only the healthiest patients, payments could be higher for patients with aÂ larger risk of complications.
In addition, Medicare would need to ensure that hospitals or physicians would not choose to deny care if it was the cheapest option but not in the best interest of the patient (Goldstein, Wall Street Journal, 1/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.