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CMS Will Call The Tune, You'll Give The Performance
Prepare to feel the pinch if care doesn't meet efficiency standards


The Medicare Payment Advisory Commission's March report will recommend that Congress immediately establish pay-for-performance (P4P) mechanisms for physicians and other providers. Also, the Centers for Medicare & Medicaid Services should require more data collection on claim forms, such as prescription-drug use and lab results.

At first, Medicare would only put a small amount of provider payments at risk for quality achievements, said MedPAC. But over time the percentage would grow substantially. In the first year, 1 percent of physicians' payments would be shifted into a quality pool that would then be redistributed to those providers - probably less than half of the total - who met goals.

Some commissioners expressed concerns about applying P4P to different physician specialties, but the first standards would only focus on information technology or electronic prescriptions. Over time, though, lagging specialty groups would have to develop their own quality measures.

Eventually, Medicare payments should be lined up with incentives to "be efficient" in providing care, ensuring the most bang for each buck. If doctors choose less-efficient treatment strategies, they should feel some of the pinch, the commissioners said. To that end, MedPAC will call on the CMS to gather data on each physician's "resource use" and give each physician a confidential briefing on how his or her efficiency compares with peers' averages.