Plans Could Change How Medicare Pays Doctors, Hospitals

Sen. Max Baucus' health proposal includes achieving cost savings, in part, by reconfiguring the way doctors and hospitals are paid for their services, The Wall Street Journal reports. The goal is to pay health providers for the quality they achieve, rather than the volume of services they perform. "One pilot [program] would tie a portion of hospital payments to whether the facilities achieved certain quality measures for cardiac, surgical and pneumonia care. It would also penalize doctors who utilize more unnecessary treatment than their peers. Other pilot programs would seek to better coordinate care between hospitals and doctors, and to lower unnecessary hospital readmissions by rewarding hospitals with lower readmission rates. The bill would require hospitals to disclose their prices to consumers and curb doctors' ability to refer patients to services from which the doctor can profit."

"All in all, the bill would save $409 billion in Medicare spending over ten years." And Wednesday, Baucus "conceded… changes would be slow in coming." (Adamy, 9/17).

"Hospital payments would be tied to value-based purchasing starting in 2012 and incentive payments would be made available to providers that better coordinate care" if the proposal becomes law, Modern Healthcare reports. Bonuses paid to hospitals with improved care would be funded by across-the-board reductions in payments, beginning at 1 percent in 2013 and increasing by a small amount each year to 2 percent in 2016. And "with the Baucus plan, primary-care physicians would be allowed to collect a 10% bonus payment on select Medicare codes for five years, starting in 2011. The codes cover home visits, office visits and other types of visits. Some general surgeons would also be eligible for the bonus, as well" (DoBias, 9/16).

Newsday reports "Another proposal would create a commission that "would send proposals to Congress to reduce Medicare spending by targeted amounts if its costs rose faster than the Consumer Price Index. Congress could then approve the commission proposals, amend them or develop their own as long as they remained under the spending targets. But Congress' approval of a Medicare Commission could be a long shot" (Brune, 9/16).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from more than 300 news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.