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Debate Over Value-Based Purchasing by Medicare Continues

Last week, the AMA and a group of surgical societies attacked a provision in the Senate reform bill that would require CMS to base a portion of doctors' Medicare reimbursement on quality and efficiency data. A new study published in the Journal of the American Medical Association supports part of the medical societies' argument. But at the same time, a prominent expert tells BNET that the medical societies' concern about the state of "risk adjustment," a method of adjusting for the relative sickness of patients, is largely unfounded.

Jonathan Weiner, professor of health policy and management at Johns Hopkins University's Bloomberg School of Public Health and the university's medical school, is the co-developer of the Johns Hopkins ACG Case Mix/Predictive Modeling System and an expert on risk adjustment methods. While he agrees that risk adjustment can stand improvement, "it's not woefully inadequate," as the AMA letter to Senate Majority Harry Reid depicts it, he says. It is also unnecessary to use risk adjustment for process measures, which are related to things such as whether patients received recommended tests, he adds. "Everybody with diabetes needs their HbA1c monitored," he notes. But risk adjustment is important, he explains, if one is comparing the differences between intermediate outcomes of care such as the HbA1c levels in diabetic patients or the blood pressure of hypertensive patients.

Weiner also criticizes the AMA for saying that "attribution programs"-the methods used to decide which physicians are responsible for a patient's care-are inadequate, although they, too, can be improved, he says. "One can look at who is involved in the care of a person with diabetes, and make some attributions. In some cases, it's very clear. In other cases, it's not. But this is an issue we have to solve in healthcare overall. I don't care if the patient has multiple physicians; if the patient receives poor care, that's a problem."

CMS must be sensitive to the need for physicians to have a minimum number of patients with a certain condition to measure their quality accurately and fairly, Weiner says. The JAMA study, which was published at a very opportune time, addresses that issue. It found that the average primary-care practice in the U.S. has a caseload of 260 Medicare patients. The percentage of practices with large enough caseloads to detect a 10 percent difference in physician performance ranged from less than 10 percent for practices with fewer than 11 primary-care doctors to 100 percent for groups of 50 or more. Of course, the results would be different if the physicians could report data on a sample of all patients, not just Medicare patients, as is being done now in the Physician Quality Reporting Initiative. While the current Senate bill does not specify how much of a physician's income could depend on quality and efficiency ratings, it does say that the new payment modifier would be revenue-neutral: that is, if higher performing physicians receive bigger payments from Medicare, poorer performers will receive less. The AMA opposes this "redistribution" of payments, which would be phased in from 2015 to 2017. The bill also is not specific about how cost-effectiveness would be determined or how much it would affect physician payments. The Senate Finance Committee version of the bill proposed that physicians in the 90th percentile for resource use should lose 5 percent of their Medicare payments, starting in 2015.

Weiner says that no more than 5 percent of physicians' income should be placed at risk initially under the value-based purchasing provisions of the reform legislation. But he does not believe that the approach should be shelved until more studies are done, as the AMA suggests. "There's such a thing as paralysis by analysis," he points out.

Clearly, value-based purchasing is coming, whatever the medical societies say. But its inclusion in a healthcare reform bill will be only the first step in a very long, complex process of implementation.

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