Providers split on Medicare payment plan

kaiser health news

WASHINGTON — While a cornerstone of President Barack Obama’s plan to trim medical costs — an independent commission to determine how much Medicare pays doctors and hospitals — has run into strong opposition from powerful industry groups, certain hospital systems are breaking ranks and supporting it.

Many are these are so-called “model” systems, such as the Mayo Clinic. They pride themselves on holding down costs and improving quality and are fed up with how slowly Congress has moved to change the payment system.

Glenn Fosdick, the chief executive of Nebraska Medical Center, said the proposed independent commission could help his hospital gain fairer payment.

“It’s a better alternative than we have now,” he said. He called the proposal a “step in the right direction,” though he had doubts Congress would ever agree to give away some of its power over Medicare.

Setting Medicare payment rates is traditionally a process filled with politics as members of Congress look to protect dollars going to their local hospitals and doctors rather than promote fees and payment plans that drive efficiency in the health system.

The Obama administration plan is to establish an agency called the Independent Medicare Advisory Council that would make recommendations on Medicare fees to the president. For Congress to overturn this council’s recommendations, lawmakers would have to pass a joint resolution within a month.

It would work similarly to the Defense Base Closure and Realignment Commission, which was formed to reduce the political infighting involved in closing military bases.

“Generally, we like the concept of a nonpartisan, less political way to establish payment policy and rates,” said Greg Poulsen, a senior vice president at Intermountain Healthcare, a large hospital system in Salt Lake City. “But we wonder about the devil in the details, which have not been seen.”

Obama’s proposal is modeled after a bill proposed in the Senate Jay Rockefeller, D-W.Va. It would turn the existing Medicare Payment Advisory Commission, or MedPAC, a nonpartisan panel of experts that advises Congress on Medicare issues, into an independent executive branch agency with power to set policy.