Impact of Medicare`s New Value

Report
Impact of Medicare’s New
Value-Based Payment Modifier
JENNIFER L. GWILYM, DO
HEALTH POLICY FELLOWSHIP
SEPTEMBER 20, 2013
Value-Based Payment Modifier
 Replace Fee for Service Medicare (2015)
 Complex calculation based on cost profiles and
quality data of physicians
http://www.acepnews.com/news/news-from-the-college/single-article/physician-value-based-payment-modifierstarts-in-2015/
Value-Based Payment Modifier
http://www.the-hospitalist.org/details/article/3782371/John_Nelson_Peformance_Key_to_Federal_ValueBased_Payment_Modifier_Plan.html December 2012
Medicare’s Financial Challenges
 Covers “Reasonable and necessary” services
 Problems: More beneficiaries qualify, healthcare is
more costly, fewer workers
 CBO: Medicare Part A will be bankrupt in 2020
 25% 65 and over living FPL in 1965 – now half of
beneficiaries live in poverty
 Average lifespan 1965 was 70 y/o, now 78.5 years
Decreases in Tax Revenue Impact Medicare
 Originally, payroll tax 2.9% of all wage earners, split
by employee and employer
 2013 ACA mandates persons making over $250,000
will pay 3.8%
1965: 4.6
taxpayers
per retiree
2013: 3.7
taxpayers
per retiree
2030: 2.4
taxpayers
per retiree
New Physicians’ Cost profiles
 Physicians with less than 10 years experience have a
13.2% higher cost profiles than physicians who have
been practicing for over 40 years
 Possible reasons:
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Newer and more expensive treatment modalities
More aggressive care due to lack of experience
Shorter relationships with their patients
Less-experienced may treat sicker patients or more noncompliant patients

Health Affairs, 2012
Experienced Physicians’ Practice Patterns
Physicians in practice longer
 May provide lower-quality care
 Posses less factual knowledge
 Less likely to adhere to appropriate standards of care
 May have poorer patient outcomes
 Less likely to adopt new proven therapies
 Exempt from recertification requirements

Systematic Review, 2005
Unintended Consequences of VBPM
 Decrease access to new physicians to provide access
to quality care for patients
 Force new physicians to modify their practice
patterns
 New physicians in training programs would be
concerned with their cost profiles instead of learning
to practice medicine, resulting in less familiarity with
certain procedures
Decreased Medicare Reimbursement
 Physicians will have to see more patients on a daily
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basis, therefore, spend less time with each
Medicare reimburses 81% of private insurance
Sustainable Growth Rate (SGR)
Increased bureaucracy, additional paperwork, more
oversight, less autonomy = job dissatisfaction
Increase physician shortage-retire or switch careers
Deter people from pursing medicine as a career
Recommendations
 Delay implementation of VBPM until guidelines are
written and simplified
 Post on Health Compare Website
 Encourage ‘parsimonious care’ – accept some
responsibility for the cost of care
 Calculate cost profiles incurred during practice, not
during residency
Questions?
 [email protected]
References
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Healthcare Consumerism: http://www.theihcc.com/en/communities/policy_legislation/the-new-health-law-bad-for-doctorsawful-for-pat_gn17y01k.html
Joseph P. Newhouse, P. a. (2013). Geographic Variation in Medicare Services. The New England Journal of Medicine.
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Medicare Q & A. (n.d.). Retrieved from Budget.House.gov: http://budget.house.gov.settingtherecordstraight/medicare.htm
Mehrotra, A. e. (2012). Physicians With The Least Experience Have Higher Cost Profiles Than Do Physicians With The Most
Experience. Health Affairs, 2453-2463.
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