The Medicare Payment Advisory Commission (MedPAC) on Jan. 10 recommended that Congress reduce the indirect medical education (IME) adjustment by 1 percentage point to 4.5 percent in FY09. MedPAC’s data indicated cost increases to teaching programs in 2006 grew at 2.2 percent for each 10 percent increment in teaching intensity, and with the IME adjustment at 5.5 percent for each 10 percent increment, there is significant overcompensation. The recommended cut is to reduce that 2.2 percent versus 5.5 percent gap. The cut was estimated to produce approximately $1 billion, which, as the recommendation proposed, would be used to fund the quality incentive program.
For physicians, in addition to the update to cover the change in input prices, less an adjustment for productivity improvement, MedPAC recommended Congress require the Centers for Medicare and Medicaid Services (CMS) to measure and report physician resource use over a two-year period.
MedPAC also recommended that dialysis services receive an update equal to the projected rate of increase in the end stage renal dialysis (ESRD) market basket, less an adjustment for productivity growth, and that Congress should implement a quality incentive program for physicians and facilities that provide these services.
In addition to no update for skilled nursing facilities for FY09, the commission’s recommendation called for Congress to establish quality incentive payments (to be budget neutral), add risk adjustment, track avoidable rehospitalizations, and conduct patient assessments at admission and discharge. In contrast to most actions of the commission, this vote had its dissenters and an abstention.
