July 1, 2005
1. Pay For Performance (P4P)
P4P is the newest healthcare reform theory. Many believe the theory
developed wide-spread acceptance following the landmark report, To Err
is Human, published by the Institute of Medicine (IOM) in 2000, followed
by the IOM report, Crossing the Quality Chasm: A New Health System For
the Twenty-First Century, issued in 2001. There is almost unanimous
agreement that P4P, if implemented correctly, has great potential to
improve patient care. The basic premise is to (1) define quality by some
measurable standard, (2) provide reimbursement incentives which
compensate improved quality and (3) assess performance and pay
accordingly.
There is almost equal consensus that, if implemented haphazardly or
inequitably, P4P has just as much potential to frustrate physicians and
waste resources. Both specialty and primary care physicians are
concerned that, unless the absolute budget for Medicare reimbursement or
any healthcare reimbursement is increased proportionately, any P4P
system could merely redistribute existing reimbursement pools, thereby
reducing the reimbursement of physician groups who do not have the
benefit of easily measurable performance targets.
Numerous reports have been issued. In April 2004, the American College
of Physicians issued a Position Paper entitled, The Use of Performance
Measurements to Improve Physician Quality of Care. The paper identifies
seven fundamental position points, as follows:
Position 1: The goal of physician
performance measurement should be to foster continuous quality
improvement of clinical care to meet or exceed evidence-based national
standards of such care.
Position 2: Physician performance
measures should be evidence-based, broadly accepted, and clinically
relevant. These measures should assess and focus on those elements of
clinical care over which physicians have direct and instrumental control
(as opposed to systems constraints). They should be built on statistical
methods that provide valid and reliable comparative assessment across
populations.
Position 3: Any data collection
required to support performance measurement should be feasible,
reliable, and practical. Data collection should not violate patient
privacy or add to the paperwork burden experienced by physicians. Should
performance measurement data collection impose additional costs on
physicians, these costs should be supported by the health system and not
the physician.
Position 4: The College supports
demonstration projects on public reporting of performance measures to
provide patients with information to make educated choices about their
physicians and other health care professionals. Acceptable demonstration
projects should include the following elements:
Physician participation in the demonstration projects is voluntary.
Physicians have a key role in determining the design of the demonstration projects, selection of the measures, and data collection and reporting systems that will be used.
Physician-specific performance data are disclosed only after physicians participating in the project are provided an opportunity to review and comment on such data; data are fully adjusted for case-mix composition (including factors of sample size, age/sex distribution, and severity of illness; number of comorbid conditions; and other features of a physician's practice and patient population that may influence the results); and patient identifiers are removed to ensure that patient privacy is protected.
Position 5:
Information technology tools should be used whenever possible to
facilitate data acquisition for performance measures and to minimize any
manual data extraction to support such measurement.
Position 6: The College supports
demonstration projects to evaluate the use of incentives, including
financial incentives, to reward physicians who meet or exceed
performance standards. Any financial incentives related to performance
measurement should be directed at positive rather than negative reward.
Position 7: The College will lead
the critical review, development, and dissemination of physician
clinical performance measures and the development of public policies to
support the appropriate use of performance measures.
FEDERAL LEGISLATION: VALUE BASED
PURCHASING
Congress is working on legislation to expand P4P within Medicare; this
concept has been christened “Value Based Purchasing.” I suppose it would
be asking too much for Congress simply to accept the widely accepted
label for this theory. The Chairman of the House Ways and Means
Committee, William M. Thomas (R-California), and the Health Subcommittee
Chairwoman, Nancy L. Johnson (R-Connecticut), have asked CMS to provide
information on the Agency’s P4P initiative, such as the hospital
demonstration project and the Physician Group Practice demonstration
project, involving ten of the largest physician practices described in
our February 18, 2004 email newsletter. The American Medical Association
(AMA) has, not surprisingly, stated that its goal is to have a “place at
the table” in the development for P4P. The AMA Board of Trustees at its
June 2005 Annual Meeting recommended a report on Pay for Performance
Principles and Guidelines identifying five core elements for P4P
program:
Insure quality;
Foster physician/patient relationships;
Voluntary physician participation;
The use of accurate data and fair
reporting mechanisms; and
Funding of fair and equitable program incentives which funding should include resources to cover the administrative costs of collecting and reporting quality data.
Many physician groups have indicated
staunch opposition to any P4P program that does not include a permanent
fix of the Medicare system, particularly the formula which ties
physician reimbursement to a sustainable growth rate for Medicare
spending, which simply maintains a defined pool of Medicare dollars that
gets redistributed among physicians by reducing reimbursement rates, via
the Medicare conversion factor, if volume exceeds the original
projections used to implement the Medicare physician fee schedule.
Congress has intervened in each of the last several years to avoid
Medicare reimbursement and reductions, but physician groups are seeking
a permanent fix to this situation. Obviously, the definition of a
permanent fix depends upon whether you are the payor or the payee in
this situation, so this type of dogmatic opposition could impede the
development of P4P.
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>For more information about the topics presented in this newsletter please contact one of the Healthcare Attorneys:
Read the March issue of our HEALTHCARE NEWSLETTER.
Tucker Arensberg, P.C.
1500 One PPG Place Pittsburgh, PA 15222 412/566-1212
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