Volume targets may be outdated
Volume targets may be outdated
Is it reasonable to believe that medical services would grow faster than all other sectors of the economy?
That’s the question those in charge of containing medical costs are grappling with this year in looking at volume targets and other mechanisms geared toward holding a lid on federal health care expenditures.
Generally, medical expenses do grow at a faster rate than other parts of the economy, and many experts argue that it should because of the advancements in medical technology and care. To contain it too much, they say, would hinder progress. But, if volume of medical services increases uncontrollably, budgets are busted.
One of the quirkiest pieces of the Resource-Based Relative Value Scale (RBRVS) the Medicare Volume Performance Standard (MVPS) has attempted to modulate growth in expenses, but many argue that it has unjustly punished primary care in the process.
The Physician Payment Review Commission (PPRC), a Washington, DC-based advisory panel to Congress, is recommending these three changes in Medicare’s RBRVS to strike a balance between volume and cost for surgical and non-surgical care:
• Revise RBRVS so it has one conversion factor for all services, rather than a separate one for surgical, non-surgical, and all other services.
• Revise RBRVS so it has one MVPS for all services, rather than the three now in existence.
• Replace the current MVPS now based on past physician performance with a "sustainable growth rate" system based on the Gross Domestic Product (GDP).
While MVPS has succeeded in keeping expenditures somewhat under control, it has contradicted RBRVS’ original aim of redistributing payment so more goes to "cognitive" services and less goes to surgical services.
MVPS controls volume by giving physicians an annual volume target. If a physician exceeds the MVPS volume target for a given year, say by 2%, the physician’s payments for next year are reduced by 2%. Volume that falls below the target is rewarded with a corresponding increase in payment. Because of the recent nationwide shift toward lower-intensity medical care, the volume of surgical services consistently falls below HCFA’s target and surgical reimbursements have increased. For the same reason, primary care services typically exceed HCFA’s targets, resulting in cuts in primary care payments.
By shifting to one conversion factor and one MVPS, however, disparities would be spread out over all physicians, thus preventing one group from benefiting at another’s expense, PPRC officials say. And, basing MVPS on GDP would tie growth to expansion in the overall economy, rather than basing it on the medical sector alone. Because medical growth and inflation typically are higher than consumer inflation, the "sustainable growth rate" would likely slow down allowable physician volume of services, suggests Jane Sarra, MHA, CRNP, national director for physician practice management services for Coopers & Lybrand in Pittsburgh.
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