Medicare penalizes 330 large medical groups

Out of 1,010 large medical groups that Medicare evaluated under the physician value-based payment modifier, just 14 are getting payment increases this year. But at the same time, only 11 groups will be getting reductions for low quality or high spending.

Dr. Michael Kitchell initially welcomed the federal government’s new quality incentives for physicians. His medical group in Iowa has always scored better than most in the quality reports that Medicare has provided physicians in recent years, he said.

But when the government launched a new payment system that will soon apply to all physicians who accept Medicare, Kitchell’s McFarland Clinic in Ames didn’t win a bonus. In fact, there are few winners: out of 1,010 large physician groups that the government evaluated, just 14 are getting payment increases this year, according to Medicare. Losers also are scarce. Only 11 groups will be getting reductions for low quality or high spending.

“We performed well, but not enough for the bonus,” said Kitchell, a neurologist. “My sense of disappointment here is really significant. Why even bother?”

Within three years, the Obama administration wants quality of care to be considered in allocating nine of every 10 dollars Medicare pays directly to providers to treat the elderly and disabled. One part of that effort is well underway: revising hospital payments based on excess readmissions, patient satisfaction and other quality measures. Expanding this approach to physicians is touchier, as many are suspicious of the government judging them and reluctant to share performance metrics that Medicare requests.

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“Without having any indication that this is improving patient care, they just keep piling on additional requirements,” said Mark Donnell, MD, an anesthesiologist in Silver City, N.M. Donnell said he only reports a third of the quality measures he is expected to. “So much of what’s done in medicine is only done to meet the requirements,” he said.

The new financial incentive for physicians, called a physician value-based payment modifier, allows the federal government to boost or lower the amount it reimburses physicians based on how they score on quality measures and how much their patients cost Medicare. How physicians rate this year will determine payments for more than 900,000 of them by 2017.

Medicare is easing physicians into the program, applying it this year only to medical groups with at least 100 health professionals, including physicians, nurses, speech-language pathologists and occupational therapists. Next year the program expands Medicare to groups of 10 or more health professionals. In 2017, all remaining physicians who take Medicare—along with about 360,000 other health professionals—will be included. By early in the next decade, 9 percent of the payments Medicare makes to physicians and other professionals would be at risk under a bill that the House of Representatives passed in March.

The quality metrics used to judge physicians vary by specialty. One test looks at how consistently physicians keep an accurate list of all the drugs patients were taking. Others track the rate of complications after cataract surgery or whether patients received recommended treatments for particular cancers.

There are more than 250 quality measures. Groups and physicians must report a selection —generally nine, which they choose — or else be automatically penalized. This year, 319 large medical groups are having their reimbursements reduced by 1 percent because they did not meet Medicare’s reporting standards.

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Physicians who do report their quality data fear the measures are sometimes misguided, usually a hassle and may encourage providers to avoid poorer and sicker patients, who tend to have more trouble controlling asthma or staying on antidepressants, for instance.

Leanne Chrisman-Khawam, MD, a primary care physician in Cleveland, said many of her patients have difficulty just getting to follow-up appointments, since they must take two or three buses. She said those battling obesity or diabetes are less likely to reform their diets to emphasize fresh foods, which are expensive and less available in poor neighborhoods. “You’re going to link that physician’s payment to that life?” she asked.

Hamilton Lempert, MD, an emergency room physician in Cincinnati, criticized one measure that requires him to track how often he follows up with patients with high blood pressure.

“Most everyone’s blood pressure is elevated in the emergency department because they’re anxious,” Lempert said. Another metric encourages testing the heart’s electrical impulses in patients with non-traumatic chest pain, which Lempert said has led emergency rooms to give priority to these cases over more serious ones.

“It’s just very frustrating, the things we have to do to jump through the hoops,” he said.

In their first year physicians are affected by the program, they can choose to forgo bonuses or penalties based on their performance. After that, the program is mandatory. This year, 564 groups opted out, but even if all of them had been included, only 3 percent would have gotten increases and 38 percent would have seen lower payments, mostly for not satisfactorily reporting quality measures, Medicare data show.

Smaller groups and solo practitioners are even less likely to report quality to the government. “The participation rates, even though it’s mandated, are just really low,” said Alyna Chien, MD, an assistant professor at Harvard Medical School. It’s “a level of analytics that just is not typically built into a doctor’s office.”

[See also: These 779 hospitals will actually receive Medicare bonuses [full list].]

Lisa Bielamowicz, MD, chief medical officer of The Advisory Board, a consulting group, predicted more physicians will start reporting their quality scores when the prospect of fines is greater. “They are not going to motivate until it is absolutely necessary,” she said. “If you look at these small practices, a lot of them just run on a shoestring.”

This year’s assessments of big groups were based on patients seen in 2013. A total of $11 million of the $1.2 billion Medicare pays physicians is being given out as bonuses, which translates to a 5 percent payment increase for those 14 groups getting payment increases this year. That money came from low performers and those that did not report quality measures to Medicare’s satisfaction; they are losing up to 1 percent.

The exact amount any of these groups lose will depend on the number and nature of the services they provide over the year. This year, 268 medical groups were exempted because at least one of their physicians was participating in one of the government’s experiments in providing care differently.

Officials at the Centers for Medicare & Medicaid Services declined to be interviewed about the program but said in a prepared statement that they have been providing all physicians with reports showing their quality and costs. “We hope that this information will provide meaningful and actionable information to physicians so that they may improve the coordination and integration of the health care provided to beneficiaries,” the statement said.

Kaiser Health News (KHN) is a nonprofit national health policy news service. KHN’s coverage of aging and long-term care issues is supported in part by a grant from The SCAN Foundation.