Friday, December 16, 2005
Medicare's payment chaos
Chaos and confusion is not limited to Medicare's new prescription drug benefit. It is rampant in the way Medicare is administered. This month, as Congress, the executive branch, and the American Medical Association (AMA) fight over how to pay doctors, it is evident evn to those who don't pay attention that micromanagement of such a complex system needs to be reformed.
Here is what has been happening: Under the current payment scheme, doctors face a 4.4 percent pay cut next year due to unforeseen cost growth coupled with a legislatively set pay scale. Doctors have warned the Center for Medicare and Medicaid Services (CMS) that the pay cut threatens patients' access to care. CMS administrator Mark McClellan has an idea how to resolve the problem (a bad idea, but an idea nevertheles), but he does not have the authority to do so; only Congress does. (Home care is in another pay battle, but the AMA battle is symptomatic of the broader problem.)
In Congress, the House and Senate have come to very different solutions from one another, and from CMS, as it debates this year's budget reconciliation bill. McClellan has argued that doctors participating in Medicare should commit to CMS's new pay-for-performance (P4P) system to encourage higher-quality care before they are promised additional pay. He says that if the doctors agree to submit data on their performance, then a pay raise can go into effect. What he doesn't say is that study after study shows variable pay for performance doesn't work as intended. In fact, headlines of late suggest P4P mainly encourages criminal activity.
Meanwhile, the House of Representatives, the Senate and the president all have their own plans, each with their own nuances. Regardless of what should be done about provider payments, it is abundantly clear that this is not working. The debate should not be happening as part of budget negotiations in Congress. The role of Congress should not be that of micromanaging payments and benefits.
Here is what has been happening: Under the current payment scheme, doctors face a 4.4 percent pay cut next year due to unforeseen cost growth coupled with a legislatively set pay scale. Doctors have warned the Center for Medicare and Medicaid Services (CMS) that the pay cut threatens patients' access to care. CMS administrator Mark McClellan has an idea how to resolve the problem (a bad idea, but an idea nevertheles), but he does not have the authority to do so; only Congress does. (Home care is in another pay battle, but the AMA battle is symptomatic of the broader problem.)
In Congress, the House and Senate have come to very different solutions from one another, and from CMS, as it debates this year's budget reconciliation bill. McClellan has argued that doctors participating in Medicare should commit to CMS's new pay-for-performance (P4P) system to encourage higher-quality care before they are promised additional pay. He says that if the doctors agree to submit data on their performance, then a pay raise can go into effect. What he doesn't say is that study after study shows variable pay for performance doesn't work as intended. In fact, headlines of late suggest P4P mainly encourages criminal activity.
Meanwhile, the House of Representatives, the Senate and the president all have their own plans, each with their own nuances. Regardless of what should be done about provider payments, it is abundantly clear that this is not working. The debate should not be happening as part of budget negotiations in Congress. The role of Congress should not be that of micromanaging payments and benefits.
