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MedPAC calls for aligning incentives


By Jennifer Lubell
Posted: June 16, 2010 - 9:45 am ET
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The Medicare Payment Advisory Commission in its 2010 June report to Congress made a number of recommendations to align incentives to promote quality, value and efficiency of care in the Medicare program.

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The report highlighted the need for the CMS to have greater flexibility as an “innovative” purchaser of healthcare, claiming it currently lacked the resources to test and implement new methods of healthcare delivery.

Among other things, the report discussed moving away from Medicare's volume incentives under its fee-for-service system. As a way to stimulate quality improvement, Medicare could update its “conditions of participation” for providers, aligning them with current quality improvement efforts, imposing intermediate sanctions for underperformers, and creating higher standards that providers could comply with voluntarily to designate them publicly as higher performers, the commission suggested.

The commission also proposed a number of changes to overhaul Medicare's graduate medical education, or GME, payments so that institutions are paid based on performance standards. Such reforms “will help to leverage Medicare funding to achieve urgently needed changes to its medical education system,” said MedPAC Chairman Glenn Hackbarth in a written statement.

HHS, for example, should establish standards for distributing funds to GME institutions that specify “ambitious goals” for practice-based learning and improvement, using overpayments made to the indirect medical education pool to fund the new performance-based program, the report stated. Institutions would get paid based on how well they performed on the standards.

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