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Medicare Compliance & Reimbursement

MEDICARE:

For AMA, McClellan Puts Some Pills In Sugar

Published on Fri Feb 25, 2005

CMS administrator hopes docs come around on P4P.

Speaking to the American Medical Association's annual advocacy conference March 15, Centers for Medicare and Medicaid Services Administrator Mark McClellan repeatedly assured the docs that CMS values them and their input and won't take major regulatory steps without soliciting physicians' views.

But McClellan also brought some tougher messages that he hopes physicians will swallow as Washington seeks to nudge Medicare toward consistently higher-quality, more cost-efficient care. Pay for performance, technology coverage that requires post-market clinical reporting by providers to ascertain precise risks and benefits, electronic health records and computerized prescribing, and joint patient-physician decision-making are among the trends McClellan hopes doctors will embrace.

With costs going up, Medicare won't let doctors off the hook about producing proven health-care value for the money. And costs do keep going up, McClellan told the AMA. February figures show Part B physician spending once again "up significantly," he said. Biggest factors driving the current increase: more imaging services; and more increasingly complex office visits.
 
To slow the cost trends, Medicare has to replace services of dubious value with the "many good ideas that we don't pay for," such as e-mail consultations and personal health records that could head off some office visits and other more intensive services, as well as "avoidable complications" for which the program now picks up the tab, McClellan said.

The AMA and other physicians' groups say they won't accept pay for performance unless new Medicare funding pays for it. With the federal budget on their minds, Washington lawmakers and the Medicare Payment Advisory Commission are recommending "budget neutral" P4P, in which existing dollars would be reshuffled. Providers who meet performance targets or improve would get more money; others would lose dollars.

Asked by reporters whether getting buy-in on P4P will require "new money," McClellan suggested that providers and the government might instead share savings from P4P projects.

In some current Medicare demos and pilots, participants will earn bonuses by cutting total per patient Medicare costs, likely by at least 3 to 5 percent, he said. 

"That is a lot of money. If even part gets back to physicians" who achieve the savings, the question of where to get new money for rewards might be solved, he suggested.

This share-the-rewards strategy might also substitute for additional federal funding to help physicians invest in clinical information technology, as federal policymakers are also urging. Medicare wouldn't be "paying for it directly, but through payments for better outcomes."

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