Report Identifies Flaws in Concept of Geography-Based Medicare Payment
March 25—Cutting payments to all Medicare providers within high-spending regions would unfairly punish low-cost providers in those regions, while unfairly rewarding high-cost providers in low-spending regions, according to an interim report issued by the Institute of Medicine (IOM).
In 2009, the U.S. Department of Health and Human Services commissioned an IOM committee to analyze whether modifying provider payments based on an unspecified geographic-area performance index would affect service cost and quality.
Healthcare spending varied at every geographic level studied, among hospitals within a region, among physicians in the same group practice, and even by individual providers when treating different conditions, the committee observed.
Payment reform initiatives that target healthcare decision making where it occurs—at the individual practitioner or organizational level—would more likely trigger behavioral change, the authors said. The full report, expected this summer, will include conclusions and observations based on the observations in this interim report.
Publication Date: Monday, March 25, 2013