Medicare Compliance & Reimbursement

Organization proposes transferring some Medicare savings to docs.

When physicians do a good job taking care of patients, Medicare spends less on hospital care - but doctors never see any of those savings. That could change, if the Practicing Physicians Advisory Council has its way.

PPAC passed a resolution at its May 23 meeting calling on Medicare to transfer savings on the hospital side due to physician efficiency over to the physician side.

This would be tricky to determine, but Medicare could do it by choosing an indicator and measuring it against a large enough control group, says Albuquerque, NM oncologist Barbara McAneny, a PPAC member who proposed the resolution. For example, for diabetic patients, Medicare could look at their Hemoglobin A1C levels or the frequency of hospitalizations for ketoacidosis, blindness, cataracts or amputations.

Hospitals automatically receive an update to their spending without the tight controls that constrain physicians, McAneny notes, and hospital spending is "not correlated with the physician side." But physicians often have to provide more care to keep patients out of the hospital.

Pay-for-performance plans tend to assume that physicians aren't providing enough services already, says Santa Monica, CA thoracic and cardiovascular surgeon William Plested, also a PPAC member. "What you have done is increased costs on the short term because you have people going to the doctor more often," which in turn triggers steep cuts, according to Plested.

P4P also will penalize physicians who practice in areas where all their patients have worse diets or other indicators, complains McAneny. Also, it assumes that one physician can take all the credit for a particular patient doing well or badly.
 
Another P4P problem: The performance measures don't apply to all doctors, so Medicare could end up reducing payments for all physicians and then paying out rewards to physicians who happen to see a lot of diabetic patients and meet a particular standard, notes Plested. And if P4P is based on adopting information technology, it will  reward the largest practices over smaller physicians.

PPAC also approved McAneny's recommendation that CMS consider all the costs of the recovery audit contractors project, including physicians' costs defending themselves against the audits. "If they spend $50 investigating and I spend $50 defending it, and they decide that CMS should get $10 back, we've spent $100 to move $10," complains McAneny.

Another McAneny resolution also passed PPAC: A proposal asking CMS to publish an interim final rule on the Part B drug Competitive Acquisition Program instead of just a final rule. Doctors need more opportunity to comment on the proposal, which would require them to earmark a particular dose of a drug for a particular patient on a particular date.