McClellan Calls for Reversal of Physician Payment Cuts

CMS Administrator Mark McClellan on Thursday said the Bush administration likely will push Congress to reverse a 5% Medicare physician payment cut scheduled for next year under the condition that doctors report data enabling the agency to measure the quality of their care. In testimony before the House Energy and Commerce Health Subcommittee, McClellan rejected suggestions by lawmakers that quality measures are not developed enough to tie them to physicians payments, saying that 34 physician specialties already have adopted quality-measurement methods that they could use when seeking reimbursement from Medicare. Only five specialties lack such measures, he added. McClellan also suggested that hospitals are a good model for physicians to follow because those that report data on quality receive higher payment updates. With respect to working to reverse the scheduled payment reduction, McClellan said, "We still want to make sure we're addressing it in a way that doesn't increase overall costs and beneficiary premiums." He added that pay-for-performance measures are especially necessary because of the rapid growth in spending on Medicare Part B, which pays for physician services. Committee Chair Joe Barton expressed interest in addressing physician spending issues by switching the payment formula to yearly payment increases that would be based on the change in the Medicare Economic Index, which tracks the costs of delivering physician care. McClellan said such a change would be costly. He noted, "We should be paying for care in a way that encourages improved quality and keep overall costs down."