WASHINGTON – Any reforms to the Medicare physician payment system should include incentives encouraging physician practices to adopt health information technology, a representative of the American College of Physicians told Congress recently.
“Medicare payments are dysfunctional…and often do not produce desired outcomes,” William E. Golden, MD, chairman of the ACP Board of Regents and professor of medicine at the University of Arkansas, said in testimony before the House Energy and Commerce Committee subcommittee on Health. He discouraged Congress from implementing the 5.1 percent sustainable growth rate cuts proposed for 2007. If legislators expect physicians to engage in continuous quality improvement and measurement supported by IT, physicians will need help, Golden added.
“Medicare reform must include incentives if health IT is to be broadly adopted by physician practices,” Golden later told Healthcare IT News. “Something has to change, because continued Medicare cuts mean less money is available for physicians to upgrade their IT systems, and that hurts their ability to report quality data.”
Earlier this year, the ACP released a policy document – the Advanced Medical Home – that called for a revised reimbursement system which would include compensation for physicians who adopt and use healthcare IT for quality improvement purposes.
“We have to develop new ways to reimburse that recognize the value of IT,” said Michael Barr, MD, ACP’s vice president of practice advocacy and improvement. “Physicians should be supported both financially and technically in IT adoption,” he said. “The financial barrier to adoption is paramount, but practice transformation and connectivity are still big issues.”
Barr said ACP believes that scrapping the volume-based fee-for-service payment system would be misguided. Such a drastic change to Medicare could create disincentives for physicians to see patients. However, he noted that the ACP’s Advanced Medical Home paper endorses pay-for-reporting and pay-for-performance as key components of a reformed reimbursement system.
“There are a lot of quality practices still working with paper, but most of those physicians are interested in IT,” Barr said. “It’s possible to create a reimbursement system that offers the benefits of IT to even the small practices.”
Robert Tennant, senior policy adviser for healthcare informatics at the Medical Group Management Association, said that it is important to remember the smaller, paper-based physician practices when reforming the Medicare payment system, because they are the ones who need the funds the most.
Tennant recommends a “front-end incentive,” whereby a bonus payment would be provided to physicians using health IT for measuring and reporting quality data. Knowing that increased payments were incoming with the adoption of EHRs and other technology, paper-based practices could carefully plan their transition to health IT with a more detailed knowledge of the incentives – and savings – they could expect.
“We hope that the financial incentives will be realigned to promote the adoption of IT,” Tennant said. “Medicare payment cuts hit the small-to-medium-sized practices hard. As their operating costs continue to rise, their expansion plans – which often include health IT – are put on the back burner.”
