Medicare Reimbursements and MedPac

Highlights from the Medicare Payment Advisory Commission's March 2014 Report

The March 2014 MedPac report had a number of key take-aways for doctors and other health professionals. The commission is placing an increasing focus on compensation differences between primary and specialty care. They are concerned that fee for service payments and fee schedules contribute to the undervaluing of primary care and overvaluing of specialty care.

They believe that the resource-based relative value scale, which forms the basis for the fee schedule, includes mispriced services. This can lead to income disparity between primary care and specialty doctors. Also, fee for service payment methodology allows some specialties to increase the volume of services they provide more easily while other specialties, particularly those that spend most of their time providing E&M services, have limited ability to increase their volume. This difference in ability to increase volume can also lead to the compensation differences between primary care and specialty care. This has been a recurring theme.

In regard to recommendations on payment changes for Medicare in 2015, the Commission outlined multiple recommendations. The primary focus is on the repeal of the Sustainable Growth Rate (SGR). They cited the destabilizing effect of temporary measures to the fix SGR on a periodic basis. SGR has created uncertainty for physicians, other health professionals, and beneficiaries, and the short-term overrides of the SGR have created an administrative burden on providers and CMS.

The Commission also believes that physicians and health professionals who join or lead two-sided risk Accountable Care Organizations should have more opportunity for shared savings compared with those in bonus-only ACOs and those who don't join any ACO. The greater opportunity for shared savings would come through a performance standard that does not reflect lower updates.

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