Medicare payment reforms need to be based on more than geography, IOM says

States should allow a broader scope of practice among healthcare providers to improve access to care, rather than have the federal government base Medicare payment adjustments around geographic locations, an Institute of Medicine analysis says.

Medicare payment adjustments based on location are meant to take into consideration the regional differences in salaries, rent and other costs healthcare providers pay. The IOM concluded, in a second phase of its study, that its recommendation to focus on geographic adjustments would improve technical accuracy of payments but won't solve access to care challenges in medically underserved areas.

"Payment accuracy is important, but geographic adjustments are not the optimal way to achieve larger goals, such as ensuring access to clinicians or reducing disparities in care. Such objectives should be addressed through other means," committee chairman Frank Sloan, Ph.D., Duke University, wrote.

In addition the IOM recommends that Medicare should support policies that enable all qualified health professionals to practice to the full extent of their education and training, and that Medicare pay for telemedicine in underserved areas.

The report was sponsored by the Centers for Medicare & Medicaid Services. Click here for an abstract of the report.