Performance Improvement 2013-2014. How Best Realign Physician Payment Incentives in Medicare to Achieve Payment Equity among Specialties, Expand the Supply of Primary Care Physicians, and Improve the Value of Care for Beneficiaries?

01/01/2014

This project identified and conducted research that could be applied to the Medicare Physician Fee Schedule to address issues related to promoting access to primary care providers, addressing rapidly rising health care costs and improving its value. The project included two phases: a developmental phase that included literature reviews, expert interviews, technical panel consultations and work plan development to identify up to four projects that could be conducted; and the research phase that involved completing three studies from the first phase. The results of one of these studies showed that alternative methods for allocating relative value units (RVUs) related to practice expenses would not result in a major shift of payments to primary care providers. A second study examined a potentially important issue related to the introduction of new codes and the effects of physician productivity changes on the distribution of work RVUs across services. The final study looked beyond the resource-based relative value scale and examined other approaches to payment reform in order to promote primary care services.

The three studies suggest that changing how practice expense payments are calculated within the fee schedule could redirect payments toward primary care services/providers; provided a policy alternative in which new services, and possibly other categories of services, are assumed to enjoy productivity gains, and therefore RVU reductions, unless evidence is available that such gains cannot or have not occurred; and identified design issues associated with Medicare payment for advanced primary care.

Report Title: Realign Physician Payment Incentives in Medicare to Achieve Payment Equity Among Specialties, Expand the Supply of Primary Care Physicians, and Improve Value of Care for Beneficiaries
Agency Sponsor: OASP, Office of the Assistant Secretary for Planning and Evaluation
Federal Contact: Don Cox, 202-690-6597
Performer: The Urban Institute
Record ID: 9627 (December 30, 2012)

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