Medicare Compliance & Reimbursement

Medicare cost-saving moves that the Centers for Medicare and Medicaid Services (CMS) has taken might actually be backfiring. HealthDay reporter, Karen Pallarito cites a study published in the March 1 issue of the journal, Cancer in her recent post on www.health.usnews.com. This study shows that a rise in Medicare payments for bladder biopsies resulted in doctors in one New York City practice performing many more in-office bladder biopsies, but the volume of hospital procedures stayed roughly the same which resulted in boosted spending.

"Our study was not intended to be an indictment of physicians or American medicine, but instead to explore how changes in Medicare reimbursement might influence practice patterns," said study co-author Dr. Samir S. Taneja, director of the division of urologic oncology at NYU Langone Medical Center, in the post.

"Clearly the intent of CMS in instituting these specific reimbursement changes was to shift bladder cancer care and bladder biopsies from the hospital to the office as these are costly and frequent procedures," Taneja further said. "Overall, this should have resulted in a cost reduction."

According to authors of the study, the shift did not reduce costs, in part, because there was a lower threshold for performing those in-office procedures after the reimbursement change.

Lead author of the study, Dr. Micah L. Hemani, a physician in the department of urology at NYU Langone Medical Center, says in the post that patients are often referred to urologists to investigate abnormalities, such as a small amount of blood in the urine. A test called cystoscopyallows the urologist to look inside the bladder.

"After 2005, when we looked inside, we were more likely to take a piece of the bladder, burn something, or resect the tumor in the office," Hemani says. "The threshold for actually intervening was much lower and it happened to coincide with this dramatic change in Medicare reimbursement." Fee-for-service incentives are causing physicians to overrecommend services or over-induce patient demand, said Dr.Robert A. Berenson, a senior fellow at the Urban Institute in Washington, D.C., and a member of the Medicare Payment Advisory Commission, which advises Congress.

"The whole statutory basis for how to pay physicians is to determine what the underlying resource costs are for producing the service, whether or not it's a good value," Berenson explains in Pallarito's post. "And so some of us have actually recommended that CMS should have the authority to do just what those authors suggested, but CMSdoesn't have the authority to do that."

Nevertheless, he goes on to say the new study adds to growing evidence that physicians are able to induce demand for services, although it remains unclear in this case whether that demand is justified or not. "The premise was wrong, but the findings still raise a very important point," Berenson said.

(Editor's note: Read the complete text of Karen Pallarito's post at: www.health.usnews.com/health-news/family-health/cancer/articles/2010/02/09/medicare-costsaving-moves-can-backfire.html?PageNr=1.)