Physicians look toward profitable Medicare services; Former Virginia official tapped for a position at CMS

A study finds physicians veer toward more profitable services amid lower Medicare fees. Meanwhile, Humana tests a patient-centered medical home program in Florida and a former Virginia official is chosen to take on a top position at the Centers for Medicaid and Medicare Services.

Medscape: "Some healthcare analysts have claimed that Medicare spending is out of control in part because physicians, anxious about their bottom line, perform more services to compensate for declining fees. A study published online last week in the health policy journal Inquiry serves up a variation of that argument. Although the evidence does not indicate that physicians are increasing the volume of services across the board in response to declining fees, it does suggest physicians are performing fewer less-profitable services in favor of additional more-profitable ones, the authors write." The study, which was based on 13,707 physician surveys, looked at eight particular services performed in 2000 and 2005. "Between those years, Medicare fees declined 11% compared with practice costs, but the number of services provided to fee-for-service Medicare beneficiaries increased by 18%. ... Updating Medicare fees for services on an individual basis also could promote better-quality care, according to the study" (Lowes, 2/17).

The Palm Beach Post reports on a Humana pilot project that is expanding the role of the primary care doctor. "The concept is called the 'patient centered medical home,' and a year-old pilot project run through MetCare in Palm Beach County is reporting impressive results" for 8,500 Humana Medicare Advantage patients. The project has shown "hospital readmission rates that are 33 percent lower than traditional Medicare readmission rates. ... Humana has also found their medical home patients' costs are lower for emergency room visits, hospitalizations, imaging and drugs, said Humana spokesman Mitch Lubitz" (Singer, 2/17).

Meanwhile, The Hill reports that a former top health official from Virginia has been tapped for a senior leadership position at the Centers for Medicare & Medicaid Services. CMS is also planning "its first structural reorganization in nearly 10 years. Marilyn Tavenner, who was secretary of Health and Human Resources in the administration of then-Virginia Gov. Tim Kaine (D) ... has joined CMS as principal deputy administrator, a newly created position that makes Tavenner the second-ranking official at the agency -- and the Obama administration's most senior appointment to the agency.  Obama, however, has yet to nominate anyone to serve as administrator of CMS" (Young, 2/17).

Modern HealthCare: "Tavenner's hiring comes after the largest payer for healthcare services announced a restructuring, creating a new Center for Medicare and streamlining other departments to create the Center for Medicaid and State Operations, the Center for Program Integrity, the Center for Strategic Planning and the Office of External Affairs & Beneficiary Services" (DoBias, 2/17).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.