Pay-for-Performance Measures Might Not Reduce Costs
Implementation of pay-for-performance measures in the Medicare reimbursement system likely will improve health care quality but might not reduce costs, according to an Institute of Medicine report released on Thursday, the AP/San Francisco Chronicle reports. The report, prepared by an IOM committee at the request of Congress, states that the current fee-for-service Medicare reimbursement system "tends to reward excessive use of services, high-cost complex procedures and lower-quality care."
As a result, the report states that the implementation of pay-for-performance measures in the current system "will not necessarily reduce the cost of care" but "will help ensure that what is paid for will be more beneficial to patients" (Freking, AP/San Francisco Chronicle, 9/21).
Although more than 100 pay-for-performance measures were implemented in the past 10 years, "a robust evidence-base on the effectiveness of these programs is not yet available," and, as a result, evaluation of the programs is difficult, the report states.
The report recommends that large providers and companies with the ability to report health care quality information to the federal government begin to report such data. In addition, the report recommends that CMS phase in pay-for-performance measures in the Medicare reimbursement system over time, with voluntary participation for smaller physician practices during the first three years.
After three years, the HHS secretary should decide whether to require mandatory participation for all providers, the report states (Carey, CQ HealthBeat, 9/21).
According to the report, CMS should establish pools of funds used to reward providers whose caret is demonstrated to improve the overall health of Medicare beneficiaries (AP/San Francisco Chronicle, 9/21).
CMS should finance the pools with as much as a 2% reduction in Medicare reimbursements for some services, the report states (Carey, CQ HealthBeat, 9/21).
In related news, House Speaker Dennis Hastert (R-Ill.) on Thursday said that Congress before the midterm elections might approve legislation that would reverse a 5.1% reduction in Medicare physician reimbursements scheduled to take effect on Jan. 1, 2007, CQ HealthBeat reports (Reichard, CQ HealthBeat, 9/21). House Ways and Means Subcommittee on Health Chair Nancy Johnson (R-Conn.) on Wednesday met with physician groups to discuss a proposal that would include a 1% increase in Medicare reimbursements for all physicians in 2007, with an additional 1.5% increase later in the year for physicians who agree to report health care quality information to the federal government (American Health Line, 9/21). Hastert said, "If they move forward and we can get an agreement, we can get it done" before the midterm elections. Meanwhile, Senate Finance Committee Chair Chuck Grassley (R-Iowa) on Thursday said that he and ranking member Max Baucus (D-Mont.) have neared an agreement on a proposal that would reverse the scheduled reduction in Medicare physician reimbursements. According to CQ HealthBeat, an "element of uncertainty" remains about the resolution of the House and Senate proposals. "The unanswered questions about the shape of a solution and how to pay for it suggested that doctors might have to wait until Congress' lame-duck session for action that would erase the planned cut, a fate they hoped to avoid because of uncertainty about how Congress would handle the issue after the election," CQ HealthBeat reports (Reichard, CQ HealthBeat, 9/21).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.