In its June report to Congress, the Medicare Payment Advisory Commission (MedPAC) said the government should change the way it pays Medicare providers.
"Current incentives reward volume instead of value and costly care instead of efficient, effective care," said Glenn Hackbarth, MedPAC’s chairman. "When providers don't work together, quality suffers and costs increase – which benefits neither the patient nor the Medicare program."
The Obama administration has been pushing for an overhaul to the physician payment system; President Barack Obama has factored it into his fiscal year 2010 budget.
Rep. Nydia Velázquez (D-N.Y.), chairman of the House Committee on Small Business, said she expects Obama's budget to bring some "real changes" for small physician practices.
In a June 15 speech, Obama told attendees of the American Medical Association's annual conference that he plans to listen to and work with them on reform.
Jeffrey Harris, president of the American College of Physicians, said Obama's recommendation to provide additional Medicare payments for physicians over the next 10 years will help physicians stay in practice. On Jan. 21, 2010, physicians face a 21 percent Medicare payment decrease, unless Congress intervenes to avert the cut.
In this year's report, MedPAC urged more focus on graduate medical education as a way to support and promote new incentive programs for Medicare payment. The report also explored how accountable care organizations could promote care coordination and potentially increase quality and lower cost growth.
In 2005, MedPAC recommended that Medicare share information with physicians about the resources they use to provide patient care. Congress passed legislation directing CMS to begin measuring and reporting physician resource use in 2008. This new MedPAC report described principles that should guide CMS as it implements this legislation.
In addition, MedPAC found that Medicare's significant cost-sharing requirements and its lack of catastrophic protection have spurred widespread use of supplemental coverage.