Panel Calls For ‘Drastic Changes’ In Medicare Doctor Pay
A panel convened by a major medical group is recommending that Medicare heal its physician payment shortfalls with 鈥渄rastic changes鈥 in how it reimburses doctors and other providers, rather than seeking more taxpayer money.
Medicare needs $138 billion over the next decade to avoid steep cuts in physician pay. Avoiding those cuts has become an annual scramble in Congress known as .鈥澛营苍 ,聽the panel鈥攎ainly composed of doctors鈥攃oncludes that there are enough 鈥渕arginal, harmful, ineffective, or unnecessary鈥 services already being paid for in Medicare that outside funding is unnecessary.
Better pay for doctors who care and manage those with complicated medical problems could also come from money already in the health care system, according to the National Commission on Physician Payment Reform. The commission was put together by the , which is made up of about 3,000 physicians on faculties at medical schools and teaching hospitals.
The panel also said Medicare could save money by targeting payments that vary based on where they are performed. As an example, the panel noted that Medicare pays $450 for an echocardiogram in a hospital, but only $180 when the procedure is performed in a doctor鈥檚 office. 鈥淭here鈥檚 no reason for that whatsoever,鈥 said , a doctor and researcher at the Engelberg Center for Health Reform at the Brookings Institution who was on the panel.
The panel also took on the powerful Relative Value Scale Update Committee, (RUC) which is managed by the American Medical Association. The RUC influences how physicians are reimbursed through its recommendations to Medicare, which sets reimbursement rates and often follows its advice.聽 The panel joined a that expensive, technology-heavy procedures such as surgery and imaging are overly encouraged by high payment rates.聽The report said the RUC鈥檚 dominance by specialists and the secretive way it operates are 鈥渟eriously flawed.鈥
Overall, the panel called for speedy changes in Medicare鈥檚 fee-for-service payment system so that within five years doctors are paid in a way that rewards value, not volume.
鈥淥ver time, payers should largely eliminate stand-alone fee-for-service payment to medical practices because of its inherent inefficiencies and problematic financial incentives,鈥 the panel wrote.
Medicare is already experimenting with several new methods of payments, including and bundled payments, and the federal health law instructed Medicare to 聽make by 2017.聽聽Jonathan Blum, director of the Center for Medicare, told the Senate that this was the most challenging task in the law鈥檚 changes in health care financing.
The panel was chaired by , a physician and professor at the University of California, San Francisco and former president of the Robert Wood Johnson Foundation.聽 Nine of the 12 commissioners also are medical doctors. Former Republican Senate Majority Leader Bill Frist, also a doctor, lent his prestige to the panel as 鈥渉onorary chair.鈥
