Medicare Compliance & Reimbursement

Insiders cannot foresee a future without P4P measures.

Washington observers say it's increasingly likely that physicians will have to accept some form of pay for performance in exchange for relief from steep cuts in 2006 and 2007. "What I've heard from people on the Hill is that there is probably some sort of quid pro quo that is going to be required," says Washington attorney Rebecca Burke with Powers, Pyles Sutter & Verville. "It's unlikely that physicians are going to get any kind of relief" from payment cuts "without some form of pay for performance."

Bill sponsor Sen. Charles Grassley (R-IA) certainly seemed to hint at a deal in a press release. He stated he wanted to include the bill "as part of a legislative initiative that would also address projected Medicare reimbursement reductions to physicians."

And the American Medical Association, which passed resolutions opposing any non-voluntary P4P plans, seemed open to a deal as well. The AMA put out a statement saying it couldn't accept any P4P plan unless it included relief from payment cuts - which may suggest that the AMA would accept the two together.

"At the same time that the Senate considers pay-for-performance legislation, it is critical that Congress pass legislation to stop the cuts and ensure seniors' access to physicians," said AMA Trustee John Armstrong. "Stable economics are critical to truly improve quality and efficiency in the Medicare program."

Many people in Congress believe that P4P is "the next step in introducing market-based reform and incentives in to the Medicare program," says attorney William Sarraille with Sidley Austin Brown & Wood in Washington. "Pay for performance is an idea that will take root," despite resistance from provider groups, he says.

"Increasingly we see a thematic trend towards a quality-oriented set of reforms and developments in the federally-funded health care programs generally, and that's very consistent with the expectations of the Baby Boom generation," notes Sarraille.

Many reformers believe that providers will never take steps to improve health care quality unless they receive financial incentives for doing so, adds Sarraille.