Medicare Is Getting A Serious Makeover

http://thinkprogress.org/health/2016/04/29/3773965/medicare-getting-major-makeover/

Medicare wants to shift away from paying doctors according to number of visits, procedures, hospitalizations, and tests — and toward paying for performance.

This week, Medicare officials unveiled an ambitious plan to do just that. The nearly thousand-page report proposes an opt-in track for doctors called the “merit-based incentive payment system” (MIPS), designed to reward or penalize them based on their performance. The proposal would also pay doctors to try out Medicare’s alternative payment models — non-traditional (and hopefully money-saving) new ways for the public health program to reimburse doctors.

The proposal is the first step toward what could be the biggest update to Medicare in its 50-year history. It’s part of a bigger plan to tie as much as half of doctor payments to patients’ health outcomes by 2019.

Proponents of the proposed “pay-for-performance” system say that Medicare’s traditional “fee-for-service” system is too costly and encourages waste. Under fee-for-service, doctors are paid a flat free for every test or procedure they perform, regardless of whether those services actually improve their patients’ health. As a result, doctors may administer expensive medical tests even when there’s little chance these tests will find a tumor or disease — and taxpayers end up footing the bill.

Medicare wants to save taxpayer dollars by penalizing wasteful doctors, but doctors have been known to fight tooth and nail against what Medicare considers wasteful. Facing criticism last year, Medicare had to abandon its proposal to penalize doctors for ordering routine prostate-cancer exams for their patients. On the one hand, prostate exams have led an estimated one million men to be treated for cancer that would never have bothered them — again, with taxpayers footing the bill. Yet, even the very authors of that study, doctors themselves, opposed Medicare’s proposal.

“[We] are not comfortable rewarding doctors for withholding a test that could help some men,” the two doctors wrote in the New York Times. They added that Medicare should not penalize doctors, but should raise patient deductibles for screenings it deems unnecessary.

The American Medical Association (AMA), the largest and most powerful group of doctors in the nation, has also criticized Medicare, calling its past attempts to implement pay-for-performance “burdensome, meaningless and punitive.” But Wednesday’s proposal got the AMA’s stamp of approval.

“Our initial review suggests that CMS has been listening to physicians’ concerns,” Steven Stack, the association’s president, said in a statement. “It is hard to overstate the significance of these proposed regulations for patients and physicians.”

The second way the proposal tries to save money and promote quality care is through “alternative payment models.” Under one common alternative model — the bundled payment model — Medicare pays doctors for all care in connection with a single “episode” of sickness or, for instance, a single knee replacement procedure. All the doctors in a given region get the same flat fee for a procedure based on the average cost of the procedure in that region. The model encourages pricey health care providers to bring down costs like their more cost-efficient neighbors.

Other models promote doctor innovation. For example, doctors can be part of a health home — “where doctors can help patients understand prevention and wellness,” the Center for Medicare and Medicaid Services explains in a video. “They can try innovative approaches like tele-health or nutrition classes.”

Patrick Conway, CMS’s chief medical officer, emphasized that the new payment system is opt-in, giving doctors “the opportunity to participate in a way that is best for them, their practice, and their patients.” Even so, CMS expects the vast majority of doctors to opt in.

The comment period for the proposal is open for the next two months.

Filed under: General Problems