Page 80-81 of the Baucus bill has the following:
"Beginning in 2015, payment [under Medicare] would be reduced by five percent if an aggregation of the physician's resource use is at or above the 90th percentile of national utilization." Thus, in any year in which a particular doctor's average per-patient Medicare costs are in the top 10 percent in the nation, the feds will cut the doctor's payments by 5 percent."The Washington Times (see here) has this to say:
This provision makes no account for the results of care, its quality or even its efficiency. It just says that if a doctor authorizes expensive care, no matter how successfully, the government will punish him by scrimping on what already is a low reimbursement rate for treating Medicare patients. The incentive, therefore, is for the doctor always to provide less care for his patients for fear of having his payments docked. And because no doctor will know who falls in the top 10 percent until year's end, or what total average costs will break the 10 percent threshold, the pressure will be intense to withhold care, and withhold care again, and then withhold it some more. Or at least to prescribe cheaper care, no matter how much less effective, in order to avoid the penalties.
This proposal is just another in the long list of "perverse incentives" that John Goodman speaks of here. This is another example of a situation in which the interests of the physician will be pitted against the best interest of the patient. In a way the proposed provision is blatantly straight forward; its aim is to save money and to do so without pretending that there will be an increase in quality plus there will always be 10% of docs who will have their fees reduced.