Money tied to P4P should be used to offset reimbursement cuts

Dan Anderson

Twice a year, I’d roll a rusting wagon from my neighbor’s garage to his dining room window. It’s right about this time of year that we would take his air conditioner out of the window, place it on the wagon and wheel it back to his garage, where it would remain covered until the following summer.

I carried out the biannual task from about age 12 until I graduated and left the neighborhood. Each time he would pay me. Although I would protest that it was my pleasure to help and that I really didn’t need the money, I ultimately walked away with a $10 bill, having been told it was pay for performance. For all those years, I made a total of $120.

More than 175 California physician groups and independent physician associations just walked away with $69 million in pay-for-performance bonuses from Blue Cross, Los Angeles. The money represents the largest-ever amount paid out in California.

Like many others, Blue Cross, a subsidiary of WellPoint, Indianapolis, rewards providers for the quality of their health care services based on criteria developed by the Integrated Healthcare Association.

In short order, Blue Cross has polled patients, pooled the money, and paid it out. Seems pretty simple for one of the largest health companies in the country.

The government wants to do something similar, and you knew from the beginning this wouldn’t go smoothly. It has been studying a voluntary Physician Quality Reporting Initiative (PQRI) this year. Money is set aside as part of the initiative, but there’s still a lot of congressional wrangling over whether to pay it out as performance bonuses or to apply the funds to offset a 10% reduction in the convoluted Sustainable Growth Rate (SGR) formula used for Medicare payments in 2008.

It would seem easiest to simply pay the money out as promised. But again, this being a government operation, nothing is that easy.

The House has suggested that maybe it would be a good idea to lessen the Medicare payment blow that’s due January 1, and even though it is not as straightforward, it seems like the best idea. We don’t know what exactly will come of the voluntary PQRI, although the government expects to have some preliminary participation data later this month. However, we know with certainty what a 10% reduction in Medicare payments will mean.

All of the leading medical imaging associations have pleaded for some resolution, most joining in an American Medical Association recommendation that the SGR be scrapped entirely. There has been no movement.

In the absence of more substantive change, which is still necessary, it makes sense to shore up an area we know has already suffered amid cuts mandated by the Deficit Reduction Act. It wasn’t all that long ago we had a huge budget surplus, and instead of shoring up some shaky government program, we each got a refund check in the mail. I think mine amounted to about the same as the $10 I got from my neighbor years earlier.

Doctors, technicians—anyone in any field—should be rewarded for their good work. In the long run, cushioning the blow of a 10% cut is a lot smarter than a one-time payout on a program that hasn’t been fully evaluated.

Congress needs to act, and soon, moving the $1.35 billion reserved for P4P payments to offset the Medicare cuts. It’s simply sound fiscal performance.

Dan Anderson
Editorial Director