News in brief - Jan. 10, 2011

IRS unveils rules for payroll tax cut - RECs move toward target enrollments - Flat pay linked to less expensive care

IRS unveils rules for payroll tax cut

The Internal Revenue Service on Dec. 17, 2010, issued instructions for employers to implement the 2011 cut in payroll taxes recently passed by Congress and signed into law by President Obama.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 lowered the Social Security withholding rate from 6.2% to 4.2%. The reduced withholding has no impact on an employee's future Social Security benefits.

Employers need to start using the new withholding tables no later than Jan. 31. If too much is withheld at the beginning of the year as employers implement this change, adjustments can be made to subsequent paychecks. The IRS' Notice 1036 includes the updated tax withholding tables (www.irs.gov/pub/irs-pdf/n1036.pdf).

RECs move toward target enrollments

The nation's regional extension centers are picking up the pace when it comes to signing up physicians, according to a blog post by the Office of the National Coordinator for Health Information Technology. The Dec. 14, 2010, blog said the 62 RECs, which were created to help small practices choose and implement electronic medical records, have signed up 28,000 physicians or other eligible health care workers.

In the previous 12 weeks, RECs signed up an average of 1,000 enrollees per week, according to the blog post. RECs in Mississippi and Maine enrolled more than 60% of their overall primary care target. Colorado, the California Health Information Partnership Service Organization, Massachusetts, North Carolina, New York City and Washington/Idaho RECs recently enrolled more than 1,000 physicians and others. The update came as REC leaders met for two days in Washington with ONC officials.

Flat pay linked to less expensive care

Paying physicians a flat salary, as opposed to linking compensation to productivity, has been suggested as one of the possible reasons why the care provided by large multispecialty clinics tends to be less expensive than that provided by smaller practices.

Most large multispecialty clinics, however, pay physicians much like those working at smaller practices, according to a survey published Dec. 20, 2010, in the blog associated with Health Affairs (healthaffairs.org/blog/2010/12/20/productivity-still-drives-compensation-in-high-performing-group-practices/). The entry was written by John Kastor, MD, professor of medicine at the University of Maryland School of Medicine in Baltimore, and Mark A. Kelley, MD, executive vice president for Henry Ford Health System and chief executive officer of the Henry Ford Medical Group in Detroit.

The authors surveyed 12 multispecialty group practices. Ten paid physicians at least partly on the number and type of clinical services provided as measured by relative value units. Only two -- Kaiser Permanente of Northern California, based in Oakland, and the Mayo Clinic, based in Rochester, Minn. -- offered fixed salaries with no consideration for volume of clinical services.

"Though these large groups may provide higher quality at lower cost, as some studies assert, their compensation programs do not appear to differentiate most of them from other groups or private practices," the authors wrote.

The authors noted that the American Medical Group Assn. says the "vast majority" of its 370 groups, representing about 110,000 physicians, pay at least partly by volume measured in RVUs.

The print version of this content appeared in the Jan. 17 issue of American Medical News.