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National Commission Calls for Changes in Physician Payment Methods

On March 4, 2013, the National Commission on Physician Payment Reform  issued a report detailing a series of recommendations aimed at reining in health spending and improving quality of care by fundamentally changing the way doctors are paid.

The Commission’s 12 recommendations provide a five-year blueprint for transitioning to a blended payment system that will yield better results for both public and private payers, as well as patients.Highlights from the recommendations include:

1. Over time, payers should largely eliminate stand-alone fee-for-service payment to medical practices because of its inherent inefficiencies and problematic financial incentives.

2. Because fee-for-service will remain an important mode of payment into the future, even as the nation shifts toward fixed-payment models, it will be necessary to continue recalibrating fee-for-service payments to encourage behavior that improves quality and cost-effectiveness and penalize behavior that misuses or overuses care.

3.Higher payment for facility-based services that can be performed in a lower-cost setting should be eliminated. This is a significant issue in Memphis where, when physician practices are purchased by hospital systems, many of the procedures or tests performed in the acquired physician practices are now charged out at the higher hospital facility rates merely because the practice has been purchased.

4. Fee-for-service contracts should always incorporate quality metrics into the negotiated reimbursement rates.

5. Fixed payments should initially focus on areas where significant potential exists for cost savings and higher quality, such as care for people with multiple chronic conditions and in-hospital procedures and their follow-up.

Read the full report.

Tennessee's Bill Frist serves as honorary chair of the Commission. Suzanne Delbanco, Executive DIrector of Catalyst for Payment Reform and MBGH 2011 Annual Conference speaker, serves on the Commission.

MBGH's 2013 Annual Conference is focusing on why we MUST pay hospitals and physicians differently and why employers MUST be the ones to drive this change. Mark your calendars now for August 29, 2013 7:30-3:30 at the University of Memphis Holiday Inn!

Posted by Cristie Travis at 5:17 PM

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