New MedPAC report explores provider incentives, assesses physician payment schedule

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The Medicare Payment Advisory Commission (MedPAC) on Tuesday submitted to Congres its June 2010 report, which focuses on using Medicare incentives to improve quality of care and make efficient use of resources.

The report, “Aligning Incentives in Medicare,” explores proposed policies that would shift healthcare providers' incentives with the goal of reforming the nation's healthcare delivery system. Such reforms include providing a payment bonus to primary care physicians, reducing payments to hospitals with high preventable readmissions rates and testing the feasibility of payment bundling. MedPAC also discusses changing out-of-pocket spending to provide beneficiaries with an incentive to seek out “high-value healthcare services,” according to MedPAC.

The report also includes an assessment of the Medicare physician fee schedule for 2011. Under the sustainable growth rate formula, physicians would be subject to a 26.2% reimbursement cut in 2011. Currently, physicians are hoping to avoid a 21.2% payment cut.