GAO urges Medicare to seek physician input on feedback reports

Washington -- A congressional watchdog group said more needs to be done to engage physicians before the government begins setting Medicare payments based on physician performance and quality of care.

Federal statute requires the Centers for Medicare & Medicaid Services to send feedback reports analyzing the amount of Medicare spending incurred by individual physicians and comparing the resources used against those utilized by their peers. Starting in 2015, CMS will pay some physicians and medical groups based on information in this feedback program. All physicians will be subject to a "value-based payment modifier" starting in 2017.

A Government Accountability Office report released in August was critical of CMS' work on the feedback program to date. CMS created feedback reports for a small percentage of physicians during the initial phases of the program, but a large number of those doctors failed to access the information.

"CMS will need to do more to solicit input and reactions from physicians and physician groups on the methodology and distribution of reports while the stakes are still relatively low -- that is, before CMS begins paying physicians based on their performance on the resource use and quality measures included in the feedback reports," the GAO said.

The American Medical Association welcomed the watchdog investigation. "The GAO report supports our concerns about the feasibility of CMS' proposal to base 2015 payment adjustments from the value-based payment modifier on physician performance in calendar year 2013 -- especially since CMS has not yet resolved myriad methodological issues that could make implementation unworkable," said AMA President Peter W. Carmel, MD.

During the test phase, CMS distributed hard-copy reports to 239 physicians in 2009. The agency made electronic reports available to 1,641 physicians and 36 groups in 2010 during phase two, the GAO said. Reports included average per capita costs by service category as well as information on resource use, quality measures and patient hospital admissions.

In November 2010, CMS sent a letter notifying physicians and groups that the phase-two reports were available electronically. But less than 10% of individual physicians had accessed reports within four months, and less than 60% of physician groups had obtained their reports. CMS later called a sample of 10 physicians and found one was retired, one did not receive the letter and eight had no memory of receiving any notification. Also, 10% of letters mailed to physicians were marked undeliverable and returned to CMS.

In February 2011, CMS mailed 1,596 feedback reports to physicians who had not accessed the report electronically.

CMS officials recognized the limitations of the distribution method, the GAO said. For phase three, the Medicare agency plans to distribute reports to 20,000 physicians in Iowa, Kansas, Missouri and Nebraska by email this year.

The GAO found additional problems with the feedback reports. CMS must strike the right balance between setting a minimum threshold of Medicare patients treated by a physician to produce reliable reporting information, but at the same time it must refrain from setting the threshold too high so a large number of physicians are excluded from the study, the watchdog agency concluded. The GAO reported that 82% of physicians in CMS' sample for phase two of the program were not eligible to receive a report.

CMS should increase the number of physicians eligible to receive reports, conduct statistical analyses of the impact of key methodological decisions, identify factors that may prevent access to reports, and survey physicians on the usefulness and credibility of performance measures used in the reports, the GAO said. CMS concurred with all of the recommendations.