AMA: Medicare pay-for-performance must be voluntary and not punitive

MedPAC wants the federal government to withhold up to 2% of physicians' reimbursement to create a reward pool for high performers.

By David Glendinning, AMNews staff. March 21, 2005.

Washington -- Members of Congress are receiving some conflicting advice on pay-for-performance from the nation's physicians and the advisory panel tasked with making Medicare payment recommendations.

The American Medical Association recently unveiled a set of principles that it will use to assess any program that pays doctors differently based on their performance. To garner the Association's support, the programs must focus on quality improvement, allow physicians to opt out and use payment incentives, rather than penalties.

Lawmakers should consider the AMA's position if they wish to launch a successful pay-for-performance element in Medicare, said AMA Secretary John H. Armstrong, MD, who chairs the task force that developed the guidelines.

"When pay-for-performance programs are designed primarily to address these concerns across the system of care, then those programs can be a positive force," he said.

The AMA release occurred one day after the Medicare Payment Advisory Commission unveiled its annual March report to Congress, in which it states that Medicare should begin paying all physicians differently based on how they perform.

MedPAC envisions a system in which 1% to 2% of Medicare payments to doctors are withheld and placed into a pool from which only the top performers are rewarded.

Although the commission leaves many of the details up to lawmakers, the plan appears to violate at least two of the AMA's core tenets right off the bat. By mandating that every physician participate in a program in which many doctors will essentially see a cut in Medicare reimbursements, the proposal is handicapping itself from the start, Dr. Armstrong said.