Friday, July 29, 2005

How to Pay for IT



Lawmaker Introduces Pay-for-Performance MeasureJuly 29, 2005
House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.) on Thursday introduced a bill that would repeal the existing formula for calculating Medicare's physician payments and replace it with a system linking payments to quality, CongressDaily reports. The measure, which seeks to preempt a scheduled 4.3% cut in Medicare physician payments in January, could become part of this fall's budget reconciliation package, according to Johnson (CongressDaily, 7/28). At a press briefing to announce the introduction of her bill, Johnson said it is "extremely important" that Congress not continue to "kick the can down the road" by enacting a temporary payment fix to avoid the scheduled cut, as it has done in years past. The $30 billion to $40 billion cost of such fixes should go toward a permanent change in the Medicare doctor payment system, Johnson said. Her proposal would eliminate the existing sustainable growth rate formula and replace it with a system under which annual payment increases would be based on the growth of the Medical Economic Index. MEI tracks the cost of providing physician care. The bill calls for a 1.5% payment increase in 2006. MEI-based payment increases, which would start in 2007, would be reduced by 1% that year and in 2008 if physicians fail to report data on the quality of care they provide. According to CQ HealthBeat, the legislation does not include "gainsharing" provisions, which allow physicians and hospitals share savings if they develop ways to improve the efficiency of treatments (CQ HealthBeat [1], 7/28).

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