Adjusting Medicare payments for regional variations in practice costs will ensure payment accuracy, according to a new report by the Institute for Medicine. The report also urges policymakers to address access to care problems through different payment mechanisms – not by adjusting geographic payments.
The report, "Geographic Adjustment in Medicare Payment Phase II: Implications for Access, Quality, and Efficiency," is the second part of a study mandated by Congress in response to the fight between urban and rural states over geographic adjustments in Medicare payments. The reports are intended to review and make recommendations for improving the current Medicare geographic payment system.
In part 1, released last May, IOM presented recommendations for fixing Medicare’s geographic payment system. The two core recommendations called upon the Center for Medicare & Medicaid Services (CMS) to update the physician payment localities and move to Metropolitan Statistical Area (MSA) boundaries – the same system Medicare uses to calculate payments to hospitals.
The California Medical Association (CMA) has been working for a decade to convince Congress and CMS to update the payment localities. CMA applauds IOM for these important recommendations and hopes Congress will finally take action on this critical issue.
IOM also said that policymakers should not make geographic adjustments to address access to care or quality problems because to do so would distort payment accuracy. Consistent with CMA policy, IOM said that Congress should address access problems through other payment methods.
The report goes on to recommend a number of ways to improve access to care, many of which focus involve the resurrection of primary care. IOM also said that access to all physicians needed to be improved in underserved areas.
"Because primary care is the foundation of an effective health care system, it is critical to focus on improving patients’ access to this care," the report says. "The Medicare program should develop and apply policies that promote access to primary care services in locations that present persistent problems to beneficiaries."
"CMA is pleased that the IOM recognizes the need to update the Medicare payment localities and to focus on patients' access to primary care, particularly for currently underserved areas" says CMA President James T. Hay, M.D. "California has one of the lowest primary physician-to-patient ratios in the country."
The full text of the report can be found on the IOM website.
Contact: Elizabeth McNeil, (415) 882-3376 or emcneil@cmanet.org.