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Leavitt: Medicare formula isn't working

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Centers for Medicare and Medicaid Services (CMS)
reimbursement rates
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HHS Secretary Mike Leavitt has come out and admitted that Medicare's "sustainable growth rate" formula used to determine physician compensation is more or less broken. In a recent meeting with reporters, Leavitt didn't disclose whether he had an alternative scheme in mind, but conceded that the agency couldn't keep stumbling along making short-term changes to address SGR-related problems. Not only did providers face a 10 percent Medicare cut in 2007--which was put on hold by Congress only until July 2008--but future cuts could hit 15 percent to 20 percent, he noted. It's not clear whether Leavitt will be proposing a new mechanism within the president's budget request for HHS, which will be released during the first week of February--but he did say that generally speaking, he believes that the way to fix this problem will be to find ways to pay more for higher-quality care.

To get more background from Leavitt's speech:
- read this Modern Healthcare piece (reg. req.)

ALSO: The Medicare Payment Advisory Commission (MedPAC) voted last week for a 1.1 percent increase in Medicare payments for doctors in 2009. Article

Related Articles:
MD groups seek new Medicare rate formula. Report
Physicians winning reimbursement fights. Report
AMA launching campaign to stave off cuts in reimbursement rates. Report
Physicians see expected 10 percent Medicare cut. Report
A different perspective on Medicare cuts. Report
CMS to phase in cost-weighting payments over three years. Report
Physician groups not thrilled with Medicare deal. Report

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The problem with Mike Leavitt and company is that they sit is some darned office in Washington DC and try to make policy. They are surrounded by lobbyists for the hospitals and Big Pharma who have created an illusion that treatment of a patient in a hospital translates to high quality care,and that treatment of people with expensive drugs is better than cheaper generic alternatives. . If you work from a lousy denominator of this kind every recommendation that follows will be muddled,erroneous and look like someone did not do their homework. The HHS seems to be running Medicare like a Kindergarten school with highly dysfunctional children. For example: look at the recently concluded PQRI initiative for gastroenterology(my specialty). It is so stupid and demeaning for a trained sub-specialist like me to be told that my quality of endoscopy would be determined by whether I biopsy Barrett's metaplasia noted at endoscopy or whether I can recognize need for endoscopy in someone who cannot swallow! The tragedy is that Medicare does not bother to check the qualifications of doctors before they pay for procedures. No one from Mike Leavitt's office solicited doctors in trenches like me to for solutions. We have seen monumental disasters like Part D, Pharmacy benefit managers, PQRI initiatives, "review of systems", "Certificate of Need" (CON) unleashed on us. Medicare consistently rewards the people who can game the system and work with its convoluted "rules" system. Medicare has historically punished the most efficient doctors who can demonstrate not only cost savings but excellent clinical outcomes and patient satisfaction. Something needs to change up there in Washington.

I feel your frustration, but, there is a lot related to health care that this administration generally has done that is good. Consider how different things looked just ten years ago. Consumer Directed Health Care is gaining ground and medicare recipients are now allowed to participate with their own health account. That's a pretty big gain, and it will becoming an even bigger factor, as long as Congress can manage to keep their muddy paws off it and let it work. Unfortunately, health savings accounts don't fit into the larger scheme of winning votes.

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