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Medicare Fix Remains Elusive

Margaret Dick Tocknell, for HealthLeaders Media, August 1, 2012

Look at what Baucus has done so far. He has invited former Medicare administrators (May), representatives from the private sector (June), and physicians (July) to the committee to offer their ideas on how to resolve the physician payment issue and insure Medicare's future.

The roundtable sessions covered a wide range of topics, including models of care, specialty reimbursements, and quality and efficiency. There was agreement that the SGR doesn't work and needs to be repealed; that whatever new payment plan is developed needs to support patient-centered and coordinated care with an emphasis on quality; and that the wheel doesn't need to be reinvented because there are plenty of examples of providers and payers successfully incorporating new payment structures that could be modeled by Medicare.

It doesn't look like a single solution will percolate to the top, but let's look at the big ideas presented by each group during their roundtable meetings.

Former administrators for the Centers for Medicare & Medicaid Services or its predecessor, the Health Care Financing Administration Gail R. Wilensky,PhD; Bruce C. Vladeck, PhD; Thomas Scully; and Mark McClellan, MD and PhD, provided a letter to the finance committee laying out their recommendations:

  • The SGR must be replaced by a more practical system with administrable limits on total Medicare physician outlays. In the short term, that could mean freezing most fees at current levels while addressing the need for payment adjustments for primary care and rural providers. Over the long term, a benchmark or a formula could be used to identify growth targets.
  • While there should be alternatives to fee-for-service payments for physicians, participation should be voluntary. Physicians who remain in the traditional FFS payment system should be subject to a reformed spending limit.
  • The calculation of FFS payments should reflect evaluation, care coordination, and other cognitive services.
  • An independent entity with broad-based representation should be created to advise CMS on RVU (relative value unit) and physician payment reforms.
  • CMS should experiment with and implement the bundling of appropriate FFS CPT (current procedural terminology) codes into bundled payments to appropriate physicians or physician groups.
  • To reduce costs and improve quality physicians participating in Medicare must receive timely and usable data from CMS, which needs the resources necessary to improve its data systems, as well as its contractor's systems.
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