Medicare could start comparing resource use among doctors in 2008

A GAO report prompts warnings from physicians against the government using the information to penalize doctors deemed "overutilizers."

By David Glendinning — Posted June 25, 2007

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Until recently, the concept of Medicare gauging how efficiently physicians provide care under the program was largely theoretical. But the Government Accountability Office now thinks the Bush administration could make the leap from theory to practice as early as next year.

In a recent report and testimony to Congress, the GAO said Medicare resource use comparison, also known by the more ominous term "physician profiling," could be ready to go live by the middle of 2008. By combing through Medicare claims and compiling utilization statistics for individual physicians and groups, the Centers for Medicare & Medicaid Services could determine how doctors compare with each other when it comes to volume and intensity of services.

CMS then could send doctors and physician groups reports that give them a sense of how much care they provide for particular patient conditions in relation to their colleagues. For instance, a physician might realize that he or she bills far more complex office visits for diabetes patients than do other doctors in the area. This could spur the physician to shift treatment patterns to match his or her peers more closely.

Federal officials hope that Medicare will save money in the long run by convincing doctors who bill for a relatively large volume of services to be more judicious in how much care they order. But CMS has not yet determined if or when it will implement such an initiative.

Resource use comparison is not a new concept. The Medicare Payment Advisory Commission, which recommends reimbursement policies both to Congress and the administration, for years has said CMS should use its administrative authority to start making these comparisons.

The GAO assessment, however, establishes for the first time an estimate of when the Medicare agency could launch this type of project. By looking at Medicare claims from 12 metropolitan areas, the GAO was able to identify primary care doctors who billed substantially more than their peers for the same types of patients. The oversight agency concluded that CMS would be able to do the same.

Physicians are also familiar with the concept but remain wary of the form it could take. Doctors could find the resource use comparisons helpful as long as CMS kept the reports completely confidential and made no move to connect efficiency assessments with reimbursement, said American Medical Association Board of Trustees Chair Cecil B. Wilson, MD.

He noted that the AMA would be experimenting with the concept by teaming up with the Connecticut-based pharmaceutical data analysis firm IMS Health to let doctors see how their drug prescribing patterns compare with other doctors in the same state and across the nation.

But physicians will not support the Medicare effort if they will be penalized when the government says the volume or intensity of services they provide is too high, Dr. Wilson said. "The problem arises if you ... use it to ding physicians when you pay them."

Possible benefits

Although a goal of such a physician comparison effort might be to reduce Medicare utilization, it also could boost the provision of services in areas where they are needed, said Anmol S. Mahal, MD, president of the California Medical Assn.

"I may find out that I'm not doing certain screening tests or procedures or analyses on my patients on a regular basis," he said. "In other areas I may be overdoing things for the population that I treat."

In setting up such a program, Medicare must be very clear about its ultimate intent, said John E. Mayer Jr., MD, the Society of Thoracic Surgeons president. A truly educational effort, he said, will not involve "profiling," a term that the GAO uses interchangeably with resource use comparison.

"This distinction is one that will be critical for all to understand," Dr. Mayer said in testimony before a House subcommittee. "Feedback is the use of data to improve physician behavior, while profiling is use of data to discriminate among physicians and steer patients -- without affecting the behavior of the provider."

Some observers said Medicare physician comparisons alone would be enough to convince many "overutilizers" to scale back.

The GAO, however, insists that some form of financial or other incentives must be connected to physician efficiency to reduce wasteful and potentially harmful overuse of services. CMS also must measure whether the effort is reducing Medicare spending, the report states.

Avoiding a costly misstep

Implementing a Medicare physician comparison program could be costly in more ways than one.

Reviewing Medicare claims, making resource use comparisons and reporting the results to physicians would have a substantial upfront price tag, said CMS Acting Administrator Leslie V. Norwalk. Whether federal officials think that they can obtain an adequate return on investment from the effort could determine whether the Bush administration acts on this issue next year or at all. So far the agency has not proposed compiling efficiency reports for any other purpose besides physician education.

If the administration implemented financial efficiency incentives right away or otherwise rushed into putting a program into place, patient care could suffer, said the CMA's Dr. Mahal. If Medicare considers some connection between resource use and reimbursement, it first must pilot-test the effort rigorously and make appropriate risk adjustments, he said. Otherwise, some physicians might avoid certain older and sicker patients for fear that they would bring down their efficiency scores and reduce their payments.

Even if the data were risk-adjusted, the information would be of limited use, because it would be derived only from Medicare claims, which do not tell the full story behind patient care, said the AMA's Dr. Wilson. "It does not tell you whether the patient was advised to get a mammogram and decided not to or given a prescription and did not fill it," he said.

In addition, some physicians already have a bad taste in their mouths about physician profiling, he said. Several health plans implemented programs they said were aimed at boosting quality of care, but participating physicians complained that they were a cover for boosting insurer profits by weeding out doctors who were deemed too costly.

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Comparing physicians

[download pdf]

If Medicare launches a physician profiling or resource use comparison initiative next year, it would not be the first health care purchaser to do so. The GAO studied these 10 programs for its report.

Patients Physicians Location Started
Aetna 500,000 15,000 Multistate 2004
BlueCross BlueShield of Texas 60,000 26,000 Texas 2004
Greater Rochester Independent Practice Assn. 120,000 640 New York 1996
Health Insurance BC 4,100,000 8,000 British Columbia 1997
HealthPartners 650,000 27,000 Minnesota 1989
Hotel Employees and Restaurant Employees International Union Welfare Fund 130,000 2,000 Nevada 2000
Massachusetts Group Insurance Commission 268,000 19,000 Massachusetts 2004
Minnesota Advantage Health Plan 115,000 N/A Minnesota 2002
PacifiCare Health Systems 1,500,000 14,000 California 1993
UnitedHealthcare 10,600,000 80,000 Multistate 2005

Source: Government Accountability Office

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External links

"Medicare: Focus on Physician Practice Patterns Can Lead to Greater Program Efficiency," Government Accountability Office, April, in pdf (link)

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