In Setting Doctors’ Medicare Fees, CMS Almost Always Accepts the Relative Value Update Panel's Advice on Work Values

Mailman School of Public Health, Columbia University, New York City, New York, USA.
Health Affairs (Impact Factor: 4.97). 05/2012; 31(5):965-72. DOI: 10.1377/hlthaff.2011.0557
Source: PubMed


To calculate physicians' fees under Medicare--which in turn influence the physician fee schedules of other public and private payers--one of the essential decisions the Centers for Medicare and Medicaid Services (CMS) must make is how much physician time and effort, or work, is associated with various physician services. To make this determination, CMS relies on the recommendations of an advisory committee representing national physician organizations. Some experts on primary care who are concerned about the income gap between primary and specialty care providers have blamed the committee for increasing that gap. Our analysis of CMS's decisions on updating work values between 1994 and 2010 found that CMS agreed with 87.4 percent of the committee's recommendations, although CMS reduced recommended work values for a limited number of radiology and medical specialty services. If policy makers or physicians want to change the update process but keep the Medicare fee schedule in its current form, CMS's capacity to review changes in relative value units could be strengthened through long-term investment in the agency's ability to undertake research and analysis of issues such as how the effort and time associated with different physician services is determined, and which specialties--if any--receive higher payments than others as a result.

Full-text preview

Available from:
  • [Show abstract] [Hide abstract]
    ABSTRACT: Many health policy analysts envision provider payment reforms currently under development as replacements for the traditional fee-for-service payment system. Reforms include per episode bundled payment and elements of capitation, such as global payments or accountable care organizations. But even if these approaches succeed and are widely adopted, the core method of payment to many physicians for the services they provide is likely to remain fee-for-service. It is therefore critical to address the current shortcomings in the Medicare physician fee schedule, because it will affect physician incentives and will continue to play an important role in determining the payment amounts under payment reform. This article reviews how the current payment system developed and is applied, and it highlights areas that require careful review and modification to ensure the success of broader payment reform.
    No preview · Article · Sep 2012 · Health Affairs
  • [Show abstract] [Hide abstract]
    ABSTRACT: Notwithstanding its obvious importance, Medicare is almost invisible in the legal literature. Part of the reason is that administrative law scholars typically train their attention on the sources of external control over agencies’ exercise of the vast discretion that Congress so often delegates to them. Medicare’s administrators, however, wield considerably less policy discretion than the agencies that feature prominently in the legal commentary. Traditional administrative law thus yields slim insight into Medicare’s operation.But questions about external control do not - or at least they should not - exhaust the field. An old and often-disregarded tradition in administrative law focuses not on external constraints, but on the internal control measures that agencies employ to shape the behavior of the bureaucrats who implement government programs on the ground. A robust set of internal controls is necessary whenever central administrators seek to align the actions of line officers with programmatic goals. And they are all the more necessary when, as is so often the case in the modern administrative state, implementation authority is vested in private actors, not government officers.So it is with Medicare, whose street-level bureaucrats are hundreds of thousands of private physicians with strong professional commitments and no particular allegiance to governmental priorities. Yet Congress’s persistent failure to address weaknesses in Medicare’s administrative structure has stymied a series of major reform efforts that have sought to make the program’s physicians more attentive to the cost and quality of the medical care for which it pays. This dismal history suggests that crafting an effective internal law for Medicare will require Congress to refashion the program around private organizations with the capacity, incentives, and legitimacy to align the practice patterns of private physicians - its bedside bureaucrats - with federal priorities. Measured against that baseline, the set of Medicare reforms included in the Affordable Care Act is a disappointment. A more muscular, thoughtful, and sustained effort is needed.
    No preview · Article · Mar 2013 · The Georgetown law journal
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: In March 2012, the Society of General Internal Medicine convened the National Commission on Physician Payment Reform to recommend forms of payment that would maximize good clinical outcomes, enhance patient and physician satisfaction and autonomy, and provide cost-effective care. The formation of the commission was spurred by the recognition that the level of spending on health care in the United States is unsustainable, that the return on investment is poor, and that the way physicians are paid drives high medical expenditures. The commission began by examining factors driving the high level of expenditures in the U.S. health care system. It . . .
    Preview · Article · Mar 2013 · New England Journal of Medicine
Show more