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Jun 18

Physicians and the new Medicare “Resource Use” Reports

Twenty-thousand physicians in four Midwest states received a glimpse into their financial future this past March. Landing in their e-mail inboxes were links to reports from Medicare showing the amount their patients cost on average as well as the quality of the care they provided. The reports also showed how Medicare spending on each doctor’s patients compared with their peers in Kansas, Iowa, Missouri and Nebraska.

The “Quality and Resource Use” reports, which Medicare plans to eventually provide to doctors nationwide, are one of the most visible phases of the government’s effort to figure out how to enact a complex, delicate and little-noticed provision of the 2010 health-care law: paying more to doctors who provide quality care at lower cost to Medicare, and reducing payments to physicians who run up Medicare’s costs without better results.

According to CMS, making providers routinely pay attention to cost and quality is widely viewed as crucial if the country is going to rein in its health-care spending, which amounts to more than $2.5 trillion a year. It’s also key to keeping Medicare solvent. Efforts have begun to change the way Medicare pays hospitals, doctors and other providers who agree to work together in new alliances known as “accountable care organizations.” This fall, the federal health program for 47 million seniors and disabled people also is adjusting hospital payments based on quality of care, and it plans to take cost into account as early as next year.

But applying these same precepts to physicians is much more difficult – physicians see far fewer patients than do hospitals, so making statistically accurate assessments of doctors’ care is much harder. Comparing specialists is tricky, since some focus on particular kinds of patients that tend to be more costly.

“It may be the most difficult measurement challenge in the whole world of value-based purchasing,” said Dr. Donald Berwick, former administrator of the federal Centers for Medicare and Medicaid Services, or CMS. “We do have to be cautious in this case. It could lead to levels of gaming and misunderstanding and incorrect signals to physicians that might not be best for everyone.”

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/downloads/2010_individual_qrur_template.pdf

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →