Report Identifies Shortfalls in Medicare Accountability Model

Author(s):

How much physicians get paid is increasingly determined by a payment formula that penalizes doctors whose patients are more expensive-even when those higher costs stem from services that other doctors perform says a new report from the Center for Healthcare Quality and Payment Reform.

How much physicians get paid is increasingly determined by a payment formula that penalizes doctors whose patients are more expensive—even when those higher costs stem from services that other doctors perform, according to a new report from the Center for Healthcare Quality and Payment Reform. This accountability model is currently being tested in pilot programs that are under way in 481 sites in 7 states that are participating in the Medicare Comprehensive Primary Care Initiative. Several commercial health plans use the same strategy.

The report, “Measuring and Assigning Accountability for Healthcare Spending,” identifies six challenges associated with Medicare’s value-based payment modifier for physicians and hospitals. Harold D. Miller, author of the report and president and CEO of the center says both patients and providers could be harmed by the measures of health care spending for the purposes of rewarding or penalizing physicians, hospitals, and other health care providers, defining provider networks, and encouraging patients to use particular providers. For example, payments to individual physicians and hospitals will be increased or decreased based on measures of spending on the health care services their patients receive.

The report points out the shortfalls that value-based purchasing programs can exhibit:

Inappropriately assign accountability to physicians and hospitals for services they did not deliver and cannot control, while at the same time failing to hold health care providers accountable for many of the services they do deliver;
Financially penalize physicians and hospitals who care for patients with complex health problems and who deliver evidence-based services to their patients;
Fail to provide physicians, hospitals, and other providers with the kind of actionable information they need to identify opportunities to control healthcare spending without harming patients; and
Give patients misleading information about which providers deliver lower-cost, higher quality care.

The strategy is scheduled to affect payment for physicians in practices with 100 or more eligible professionals starting in January 2015, for physicians in practices with 10 or more the following January 2016, and for all physicians by January 2017.

Essentially, the model will discourage groups with large numbers of specialists from keeping lots of primary care doctors in the group, Miller says. Specialist groups that include a high proportion of primary care physicians will be subject to the cost measures in the modifier because the modifiers tend to focus on primary care.

Source:

Miller HD. "Measuring and Assigning Accountability for Healthcare Spending. Fair and Effective Ways to Analyze the Drivers of Healthcare Costs and Transition to Value-Based Payment.” Center for Healthcare Quality & Payment Reform. Available at http://www.chqpr.org/downloads/AccountabilityforHealthcareSpending.pdf