MedPAC mulls concept of bundling Medicare payments

Physicians worry that such a "radical" move would disrupt practices.

By Markian Hawryluk, AMNews staff. Oct. 27, 2003.

Washington -- When it comes to paying for physician services, a Medicare advisory panel is unsure whether the whole is greater or less than the sum of its parts.

In October, the Medicare Payment Advisory Commission discussed the merits of bundling payments for services provided in an episode of care into a single fee, rather than paying for each service individually. But unlike many bundling efforts in the past, this one is not necessarily aimed at reducing utilization or cutting costs.

Since its inception, Medicare has steadily moved away from paying health professionals for each individual service provided to beneficiaries and sought to pay for groups of services as a way of reducing unnecessary procedures. Medicare already bundles payments to physicians for surgical services and for oversight of care for patients with end-stage renal disease.

MedPAC is considering whether bundling payments for other types of care could have additional benefits, such as reducing administrative costs or promoting best practices.

"It's a way of thinking about the care that needs to be provided," said MedPAC Chair Glenn Hackbarth. "The idea is you bundle these things together and say this particular condition needs this kind of a course of treatment. But it's not enough that you pay on that basis alone; you also have to have some quality measures."

Quality measures or other safeguards would ensure that physicians aren't encouraged to hold back care.