Jennifer Silverman

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet, fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study that was published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible; inefficient; and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to increase their federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Medicine Takes on Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission to address disparities in medical care. The commission has established four committees to examine the current health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information is available at

www.ama-assn.org/go/healthdisparities

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet, fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study that was published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible; inefficient; and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to increase their federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Medicine Takes on Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission to address disparities in medical care. The commission has established four committees to examine the current health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information is available at

www.ama-assn.org/go/healthdisparities

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet, fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study that was published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible; inefficient; and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to increase their federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Medicine Takes on Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission to address disparities in medical care. The commission has established four committees to examine the current health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information is available at

www.ama-assn.org/go/healthdisparities

WASHINGTON – Physicians should be reimbursed retroactively for any payment miscalculations that occurred under Medicare's new system to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The “average sales price” (ASP) is something federal regulators “are concocting, and they don't know how accurate it's going to be,” said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said.

PPAC is an independent panel that advises CMS on physician payment issues.

The ASP was authorized by the Medicare Modernization Act of 2003, replacing the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%. But next year, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process. CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis.

Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

“Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100,” she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April–and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said.

As a result, the agency might end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

“GAO has always said that everything's going to be fine” with the ASP, Dr. McAneny said.

Nevertheless, “we need a plan B in case they're wrong.”

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered.

Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

“This will be very helpful to the physician community–not just oncology–but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from,” Dr. McAneny said.

WASHINGTON – Physicians should be reimbursed retroactively for any payment miscalculations that occurred under Medicare's new system to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The “average sales price” (ASP) is something federal regulators “are concocting, and they don't know how accurate it's going to be,” said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said.

PPAC is an independent panel that advises CMS on physician payment issues.

The ASP was authorized by the Medicare Modernization Act of 2003, replacing the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%. But next year, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process. CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis.

Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

“Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100,” she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April–and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said.

As a result, the agency might end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

“GAO has always said that everything's going to be fine” with the ASP, Dr. McAneny said.

Nevertheless, “we need a plan B in case they're wrong.”

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered.

Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

“This will be very helpful to the physician community–not just oncology–but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from,” Dr. McAneny said.

WASHINGTON – Physicians should be reimbursed retroactively for any payment miscalculations that occurred under Medicare's new system to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The “average sales price” (ASP) is something federal regulators “are concocting, and they don't know how accurate it's going to be,” said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said.

PPAC is an independent panel that advises CMS on physician payment issues.

The ASP was authorized by the Medicare Modernization Act of 2003, replacing the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%. But next year, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process. CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis.

Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

“Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100,” she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April–and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said.

As a result, the agency might end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

“GAO has always said that everything's going to be fine” with the ASP, Dr. McAneny said.

Nevertheless, “we need a plan B in case they're wrong.”

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered.

Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

“This will be very helpful to the physician community–not just oncology–but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from,” Dr. McAneny said.

WASHINGTON – Older patients are choosing their physician over the phone or electronic resources to help them understand the complexities of the new prescription drug law.

Many beneficiaries don't understand what the new law does, and many are not comfortable looking for information online, Drew Altman, president and CEO of the Kaiser Family Foundation, said during the annual conference of the National Academy of Social Insurance.

In a Kaiser Family Foundation poll of over 1,200 adults, only 13% said they understood the new law very well. Over half (53%) said they didn't have enough information about the law to understand how it would impact them personally. The poll was conducted in December 2004 and included responses from 237 adults aged 65 years and older and 953 adults aged 18–64.

In a question specifically addressed to seniors, respondents were asked what sources they would turn to for help. The majority (38%) said they'd ask for their physician's counsel, in deciding whether or not to enroll in a Medicare drug plan. Seniors also cited Medicare offices, Web sites, or phone number (31%); pharmacists (30%); and health insurance companies (25%) as consultation sources for the new drug benefit, Mr. Altman said.

Upon closer look, however, it doesn't seem like the Internet or the phone are popular venues to get information. Forty-three percent of the seniors who responded to the poll said they'd never heard of the 1–800 Medicare number, and 42% were aware of it but had never used it.

Only 6% of the respondents said they had heard of Medicare.gov, and 39% said they had never heard of the Web site. For those aged 65 and older, 73% said they have never gone online, and 85% said they had never gotten assistance to visit an Internet site on their behalf to get information about Medicare.

Most of the information isn't access friendly to the average beneficiary, Roslyn Taylor, M.D., a family physician in Savannah, Ga., said in an interview. “Many of the seniors do not have or know how to use computers.” Those patients that did “told me that even if they went on the Web site they still were confused.”

Thirty-seven percent of the seniors who responded to the survey said they would prefer to get their Medicare information from mailings, and 25% said they wouldn't mind obtaining the information in person from Medicare or Social Security offices. Only 18% cited toll-free telephone hotlines as a preferred method.

Physicians themselves may need a quick tutorial on the new benefits. “I think that a lot of physicians are not aware of the details regarding what new things Medicare is covering–and under what specific rules,” said Colette Willins, M.D., a professor at Case Western Reserve University in Westlake, Ohio.

Older beneficiaries seemed more aware of specific benefits. Respectively, 86% and 67% of beneficiaries aged 65 and older knew about the discount drug card, and a $600 subsidy on the costs of drugs for low-income people. Only 27% of beneficiaries aged 18–64 were aware of the subsidy.

Senior respondents seemed divided on their reported plans to enroll in the drug benefit in 2006. Nineteen percent said they would, 37% said they would not, and another 37% said they hadn't heard enough about the new benefit to decide.

Not all physicians are encouraging their patients to use the new Medicare benefit. “Our community health center has an innovative pharmacy program that makes medications so affordable that we counsel our patients not to participate in the Medicare plan,” where they'll end up spending more money, Tillman Farley, M.D., a family physician at the Salud Family Health Center in Fort Lupton, Colo., told this newspaper.

Seniors who responded thought low-income people on Medicare would benefit the most from the new law, although fewer respondents thought it would help the typical Medicare beneficiary.

WASHINGTON – Older patients are choosing their physician over the phone or electronic resources to help them understand the complexities of the new prescription drug law.

Many beneficiaries don't understand what the new law does, and many are not comfortable looking for information online, Drew Altman, president and CEO of the Kaiser Family Foundation, said during the annual conference of the National Academy of Social Insurance.

In a Kaiser Family Foundation poll of over 1,200 adults, only 13% said they understood the new law very well. Over half (53%) said they didn't have enough information about the law to understand how it would impact them personally. The poll was conducted in December 2004 and included responses from 237 adults aged 65 years and older and 953 adults aged 18–64.

In a question specifically addressed to seniors, respondents were asked what sources they would turn to for help. The majority (38%) said they'd ask for their physician's counsel, in deciding whether or not to enroll in a Medicare drug plan. Seniors also cited Medicare offices, Web sites, or phone number (31%); pharmacists (30%); and health insurance companies (25%) as consultation sources for the new drug benefit, Mr. Altman said.

Upon closer look, however, it doesn't seem like the Internet or the phone are popular venues to get information. Forty-three percent of the seniors who responded to the poll said they'd never heard of the 1–800 Medicare number, and 42% were aware of it but had never used it.

Only 6% of the respondents said they had heard of Medicare.gov, and 39% said they had never heard of the Web site. For those aged 65 and older, 73% said they have never gone online, and 85% said they had never gotten assistance to visit an Internet site on their behalf to get information about Medicare.

Most of the information isn't access friendly to the average beneficiary, Roslyn Taylor, M.D., a family physician in Savannah, Ga., said in an interview. “Many of the seniors do not have or know how to use computers.” Those patients that did “told me that even if they went on the Web site they still were confused.”

Thirty-seven percent of the seniors who responded to the survey said they would prefer to get their Medicare information from mailings, and 25% said they wouldn't mind obtaining the information in person from Medicare or Social Security offices. Only 18% cited toll-free telephone hotlines as a preferred method.

Physicians themselves may need a quick tutorial on the new benefits. “I think that a lot of physicians are not aware of the details regarding what new things Medicare is covering–and under what specific rules,” said Colette Willins, M.D., a professor at Case Western Reserve University in Westlake, Ohio.

Older beneficiaries seemed more aware of specific benefits. Respectively, 86% and 67% of beneficiaries aged 65 and older knew about the discount drug card, and a $600 subsidy on the costs of drugs for low-income people. Only 27% of beneficiaries aged 18–64 were aware of the subsidy.

Senior respondents seemed divided on their reported plans to enroll in the drug benefit in 2006. Nineteen percent said they would, 37% said they would not, and another 37% said they hadn't heard enough about the new benefit to decide.

Not all physicians are encouraging their patients to use the new Medicare benefit. “Our community health center has an innovative pharmacy program that makes medications so affordable that we counsel our patients not to participate in the Medicare plan,” where they'll end up spending more money, Tillman Farley, M.D., a family physician at the Salud Family Health Center in Fort Lupton, Colo., told this newspaper.

Seniors who responded thought low-income people on Medicare would benefit the most from the new law, although fewer respondents thought it would help the typical Medicare beneficiary.

WASHINGTON – Older patients are choosing their physician over the phone or electronic resources to help them understand the complexities of the new prescription drug law.

Many beneficiaries don't understand what the new law does, and many are not comfortable looking for information online, Drew Altman, president and CEO of the Kaiser Family Foundation, said during the annual conference of the National Academy of Social Insurance.

In a Kaiser Family Foundation poll of over 1,200 adults, only 13% said they understood the new law very well. Over half (53%) said they didn't have enough information about the law to understand how it would impact them personally. The poll was conducted in December 2004 and included responses from 237 adults aged 65 years and older and 953 adults aged 18–64.

In a question specifically addressed to seniors, respondents were asked what sources they would turn to for help. The majority (38%) said they'd ask for their physician's counsel, in deciding whether or not to enroll in a Medicare drug plan. Seniors also cited Medicare offices, Web sites, or phone number (31%); pharmacists (30%); and health insurance companies (25%) as consultation sources for the new drug benefit, Mr. Altman said.

Upon closer look, however, it doesn't seem like the Internet or the phone are popular venues to get information. Forty-three percent of the seniors who responded to the poll said they'd never heard of the 1–800 Medicare number, and 42% were aware of it but had never used it.

Only 6% of the respondents said they had heard of Medicare.gov, and 39% said they had never heard of the Web site. For those aged 65 and older, 73% said they have never gone online, and 85% said they had never gotten assistance to visit an Internet site on their behalf to get information about Medicare.

Most of the information isn't access friendly to the average beneficiary, Roslyn Taylor, M.D., a family physician in Savannah, Ga., said in an interview. “Many of the seniors do not have or know how to use computers.” Those patients that did “told me that even if they went on the Web site they still were confused.”

Thirty-seven percent of the seniors who responded to the survey said they would prefer to get their Medicare information from mailings, and 25% said they wouldn't mind obtaining the information in person from Medicare or Social Security offices. Only 18% cited toll-free telephone hotlines as a preferred method.

Physicians themselves may need a quick tutorial on the new benefits. “I think that a lot of physicians are not aware of the details regarding what new things Medicare is covering–and under what specific rules,” said Colette Willins, M.D., a professor at Case Western Reserve University in Westlake, Ohio.

Older beneficiaries seemed more aware of specific benefits. Respectively, 86% and 67% of beneficiaries aged 65 and older knew about the discount drug card, and a $600 subsidy on the costs of drugs for low-income people. Only 27% of beneficiaries aged 18–64 were aware of the subsidy.

Senior respondents seemed divided on their reported plans to enroll in the drug benefit in 2006. Nineteen percent said they would, 37% said they would not, and another 37% said they hadn't heard enough about the new benefit to decide.

Not all physicians are encouraging their patients to use the new Medicare benefit. “Our community health center has an innovative pharmacy program that makes medications so affordable that we counsel our patients not to participate in the Medicare plan,” where they'll end up spending more money, Tillman Farley, M.D., a family physician at the Salud Family Health Center in Fort Lupton, Colo., told this newspaper.

Seniors who responded thought low-income people on Medicare would benefit the most from the new law, although fewer respondents thought it would help the typical Medicare beneficiary.

WASHINGTON – Consumer-driven health care plans have yet to catch on with most patients.

These high-deductible spending accounts were designed to empower patients to make informed choices about their health care and provide them with more options regarding providers and treatments.

The large deductibles in consumer-driven plans may be too burdensome for some people to handle, Paul Ginsburg, Ph.D., said at a meeting sponsored by the Alliance for Health Reform. “People are going to go into debt. Some are going to declare bankruptcy because of the burdens of paying for medical care under this different benefits structure.

“What if it just causes a barrier to people getting care that they really need?” asked Dr. Ginsburg, president of the Center for Studying Health System Change (HSC). In his opinion, these problems are going to limit the extent to which these plans can be used.

Enrollment in consumer-directed health plans continues to grow steadily, but it remains “a tiny fraction” of all employer-sponsored coverage, according to a study in the journal HSR: Health Services Research. Dr. Arnold Milstein of Mercer Human Resource Consulting and Meredith Rosenthal, Ph.D., assistant professor of health economics and policy at the Harvard School of Public Health, found that patients in consumer-directed plans were more likely to enroll in tiered-benefit model plans or networks than in employer-funded health reimbursement accounts.

Tiered plans, which categorize hospitals or physician groups by price and quality and assign lower premiums or cost-sharing to patients who opt for a preferred tier, may offer more flexibility and choice to consumers.

But as an HSC study indicated, employers seem to have doubts about the cost-saving value of any of these plans. In site visits to 12 nationally representative metropolitan communities, HSC found that few of the employers in these areas planned to adopt consumer-driven plans or tiered provider networks. One employer surveyed said that 70% of the firm's covered employees had health care costs of less than $1,000 per year. Giving workers a $1,000 spending account would encourage workers to use more services and raise costs, the employer estimated.

The biggest concern employers have about tiered plans “is that most of the tiering is occurring on cost information–not quality,” HSC spokeswoman Alwyn Cassil told this newspaper. “Employers need more evidence that the tiering is going to result in their workers being cared for by high quality, lower cost providers.”

One type of consumer-driven plan, health savings accounts (HSAs), does seem to be gaining popularity. America's Health Insurance Plans, an industry group, surveyed 500 privately insured individuals and found that 71% said they had a favorable opinion of HSAs as a new approach to financing health care.

HSAs combine individually owned savings accounts with traditional medical insurance, giving patients the opportunity to use tax-free funds to pay for routine medical bills. Under the Medicare Modernization Act, the plans must be established in combination with insurance coverage through a qualifying high-deductible health plan. Many consumers lack details about how the plans work, the survey said. But when educated about HSAs, most consumers react positively to the opportunity to play a more active role in seeking health care coverage, according to America's Health Insurance Plans' president and CEO, Karen Ignagni.

Consumers specifically favor the rollover of unused balances and the tax-free nature of the accounts, the survey said.

The problem with HSAs is “there's no flexibility for employers or insurers to design products,” because they have such a rigid structure, Ms. Cassil said, adding that concerns also exist that a low-income person might not have the money to invest in these accounts.

To use consumer-driven plans and other patient cost sharing tools more effectively, “we have to think of ways to refine it,” Dr. Ginsburg said.

One type of incentive for the patient would be to choose more efficient providers. As an example, “you could pay more if go to an inefficient provider or pay less if you go to efficient providers.” In the same line of thinking, a plan could employ incentives to use more effective treatments, such as higher cost sharing for treatments that are more discretionary, “that are seen as luxuries,” he said.

Consumer-driven plans shouldn't be the sole solution for medical care. Technology assessments, effectiveness research, information technology, and innovation in provider payments are also needed, Dr. Ginsburg said.

WASHINGTON – Consumer-driven health care plans have yet to catch on with most patients.

These high-deductible spending accounts were designed to empower patients to make informed choices about their health care and provide them with more options regarding providers and treatments.

The large deductibles in consumer-driven plans may be too burdensome for some people to handle, Paul Ginsburg, Ph.D., said at a meeting sponsored by the Alliance for Health Reform. “People are going to go into debt. Some are going to declare bankruptcy because of the burdens of paying for medical care under this different benefits structure.

“What if it just causes a barrier to people getting care that they really need?” asked Dr. Ginsburg, president of the Center for Studying Health System Change (HSC). In his opinion, these problems are going to limit the extent to which these plans can be used.

Enrollment in consumer-directed health plans continues to grow steadily, but it remains “a tiny fraction” of all employer-sponsored coverage, according to a study in the journal HSR: Health Services Research. Dr. Arnold Milstein of Mercer Human Resource Consulting and Meredith Rosenthal, Ph.D., assistant professor of health economics and policy at the Harvard School of Public Health, found that patients in consumer-directed plans were more likely to enroll in tiered-benefit model plans or networks than in employer-funded health reimbursement accounts.

Tiered plans, which categorize hospitals or physician groups by price and quality and assign lower premiums or cost-sharing to patients who opt for a preferred tier, may offer more flexibility and choice to consumers.

But as an HSC study indicated, employers seem to have doubts about the cost-saving value of any of these plans. In site visits to 12 nationally representative metropolitan communities, HSC found that few of the employers in these areas planned to adopt consumer-driven plans or tiered provider networks. One employer surveyed said that 70% of the firm's covered employees had health care costs of less than $1,000 per year. Giving workers a $1,000 spending account would encourage workers to use more services and raise costs, the employer estimated.

The biggest concern employers have about tiered plans “is that most of the tiering is occurring on cost information–not quality,” HSC spokeswoman Alwyn Cassil told this newspaper. “Employers need more evidence that the tiering is going to result in their workers being cared for by high quality, lower cost providers.”

One type of consumer-driven plan, health savings accounts (HSAs), does seem to be gaining popularity. America's Health Insurance Plans, an industry group, surveyed 500 privately insured individuals and found that 71% said they had a favorable opinion of HSAs as a new approach to financing health care.

HSAs combine individually owned savings accounts with traditional medical insurance, giving patients the opportunity to use tax-free funds to pay for routine medical bills. Under the Medicare Modernization Act, the plans must be established in combination with insurance coverage through a qualifying high-deductible health plan. Many consumers lack details about how the plans work, the survey said. But when educated about HSAs, most consumers react positively to the opportunity to play a more active role in seeking health care coverage, according to America's Health Insurance Plans' president and CEO, Karen Ignagni.

Consumers specifically favor the rollover of unused balances and the tax-free nature of the accounts, the survey said.

The problem with HSAs is “there's no flexibility for employers or insurers to design products,” because they have such a rigid structure, Ms. Cassil said, adding that concerns also exist that a low-income person might not have the money to invest in these accounts.

To use consumer-driven plans and other patient cost sharing tools more effectively, “we have to think of ways to refine it,” Dr. Ginsburg said.

One type of incentive for the patient would be to choose more efficient providers. As an example, “you could pay more if go to an inefficient provider or pay less if you go to efficient providers.” In the same line of thinking, a plan could employ incentives to use more effective treatments, such as higher cost sharing for treatments that are more discretionary, “that are seen as luxuries,” he said.

Consumer-driven plans shouldn't be the sole solution for medical care. Technology assessments, effectiveness research, information technology, and innovation in provider payments are also needed, Dr. Ginsburg said.

WASHINGTON – Consumer-driven health care plans have yet to catch on with most patients.

These high-deductible spending accounts were designed to empower patients to make informed choices about their health care and provide them with more options regarding providers and treatments.

The large deductibles in consumer-driven plans may be too burdensome for some people to handle, Paul Ginsburg, Ph.D., said at a meeting sponsored by the Alliance for Health Reform. “People are going to go into debt. Some are going to declare bankruptcy because of the burdens of paying for medical care under this different benefits structure.

“What if it just causes a barrier to people getting care that they really need?” asked Dr. Ginsburg, president of the Center for Studying Health System Change (HSC). In his opinion, these problems are going to limit the extent to which these plans can be used.

Enrollment in consumer-directed health plans continues to grow steadily, but it remains “a tiny fraction” of all employer-sponsored coverage, according to a study in the journal HSR: Health Services Research. Dr. Arnold Milstein of Mercer Human Resource Consulting and Meredith Rosenthal, Ph.D., assistant professor of health economics and policy at the Harvard School of Public Health, found that patients in consumer-directed plans were more likely to enroll in tiered-benefit model plans or networks than in employer-funded health reimbursement accounts.

Tiered plans, which categorize hospitals or physician groups by price and quality and assign lower premiums or cost-sharing to patients who opt for a preferred tier, may offer more flexibility and choice to consumers.

But as an HSC study indicated, employers seem to have doubts about the cost-saving value of any of these plans. In site visits to 12 nationally representative metropolitan communities, HSC found that few of the employers in these areas planned to adopt consumer-driven plans or tiered provider networks. One employer surveyed said that 70% of the firm's covered employees had health care costs of less than $1,000 per year. Giving workers a $1,000 spending account would encourage workers to use more services and raise costs, the employer estimated.

The biggest concern employers have about tiered plans “is that most of the tiering is occurring on cost information–not quality,” HSC spokeswoman Alwyn Cassil told this newspaper. “Employers need more evidence that the tiering is going to result in their workers being cared for by high quality, lower cost providers.”

One type of consumer-driven plan, health savings accounts (HSAs), does seem to be gaining popularity. America's Health Insurance Plans, an industry group, surveyed 500 privately insured individuals and found that 71% said they had a favorable opinion of HSAs as a new approach to financing health care.

HSAs combine individually owned savings accounts with traditional medical insurance, giving patients the opportunity to use tax-free funds to pay for routine medical bills. Under the Medicare Modernization Act, the plans must be established in combination with insurance coverage through a qualifying high-deductible health plan. Many consumers lack details about how the plans work, the survey said. But when educated about HSAs, most consumers react positively to the opportunity to play a more active role in seeking health care coverage, according to America's Health Insurance Plans' president and CEO, Karen Ignagni.

Consumers specifically favor the rollover of unused balances and the tax-free nature of the accounts, the survey said.

The problem with HSAs is “there's no flexibility for employers or insurers to design products,” because they have such a rigid structure, Ms. Cassil said, adding that concerns also exist that a low-income person might not have the money to invest in these accounts.

To use consumer-driven plans and other patient cost sharing tools more effectively, “we have to think of ways to refine it,” Dr. Ginsburg said.

One type of incentive for the patient would be to choose more efficient providers. As an example, “you could pay more if go to an inefficient provider or pay less if you go to efficient providers.” In the same line of thinking, a plan could employ incentives to use more effective treatments, such as higher cost sharing for treatments that are more discretionary, “that are seen as luxuries,” he said.

Consumer-driven plans shouldn't be the sole solution for medical care. Technology assessments, effectiveness research, information technology, and innovation in provider payments are also needed, Dr. Ginsburg said.

Medicare is investigating ways to help its beneficiaries quit smoking.

The Centers for Medicare and Medicaid Services proposed to extend smoking cessation coverage to beneficiaries who smoke and have been diagnosed with a smoking-related disease–or who are taking certain drugs whose metabolism is affected by tobacco use.

The hope is that Medicare's decision to pay for smoking cessation counseling “will encourage and help seniors quit smoking once and for all,” Ronald Davis, M.D., trustee to the American Medical Association, said in a statement.

Of the 440,000 Americans who die annually from smoking-related disease, 300,000 are aged 65 and older, according to the Centers for Disease Control and Prevention. More than 9% of those 65 and older smoke cigarettes. The CDC in 2002 estimated that 57% of smokers aged 65 and older reported a desire to quit smoking.

The proposed coverage decision specifically applies to patients whose illness is caused or complicated by smoking, such as heart disease, cerebrovascular disease, lung disease, weak bones, or blood clots–diseases that account for the bulk of Medicare spending, according to CMS.

Beneficiaries are also eligible for counseling if they take drugs whose effectiveness is complicated by smoking, including insulins, and medicines for high blood pressure, seizures, blood clots, or depression.

Minimal counseling is already covered at each evaluation and management visit for beneficiaries. Beyond that, Medicare is proposing to cover two cessation attempts per year. “Each attempt may include a maximum of four intermediate or intensive sessions, with the total annual benefit covering up to eight sessions in a 12-month period,” the proposal stated.

CMS estimates the program will cost $11 million annually, a number it expects will be offset by fewer hospitalizations and health problems related to smoking.

In addition to heart disease, emphysema, and stroke, seniors who smoke cigarettes are also more likely to develop problems associated with older age, such as hip fractures, eye cataracts, and facial skin wrinkles. Seniors who try to quit smoking are 50% more likely to succeed than other age groups, and those who quit can reduce their risk of death from heart disease to that of nonsmokers within several years of quitting, Dr. Davis said.

In a statement, CMS Administrator Mark McClellan, M.D., encouraged smokers on Medicare who were starting to experience heart or lung problems, or high blood pressure “to take advantage of this new help–and more is coming.” The agency noted that Medicare's upcoming prescription drug benefit will cover smoking cessation treatments that are prescribed by a physician.

The American Lung Association supported the effort but had concerns that comparable benefits weren't available to younger patients.

The group “applauds anything that will help anyone stop smoking,” spokeswoman Diane Maple told this newspaper. However, a recent study showed that only 10% of employer-sponsored health plans cover smoking cessation programs that combine medications with counseling, she said.

The lung association hopes that private plans will follow Medicare and develop similar programs in the future, she said.

Other caregivers in comments to the agency wanted more details about the program's requirements. Only individuals trained in tobacco counseling and cessation may provide the counseling to beneficiaries, but “how will this training be accredited?” Steven White, a physician assistant, asked. “Will having a general knowledge of smoking and its risks be sufficient?”

The comment period for the proposed coverage decision closed in late January. CMS now has 60 days to review the comments and issue a final policy.

Medicare is investigating ways to help its beneficiaries quit smoking.

The Centers for Medicare and Medicaid Services proposed to extend smoking cessation coverage to beneficiaries who smoke and have been diagnosed with a smoking-related disease–or who are taking certain drugs whose metabolism is affected by tobacco use.

The hope is that Medicare's decision to pay for smoking cessation counseling “will encourage and help seniors quit smoking once and for all,” Ronald Davis, M.D., trustee to the American Medical Association, said in a statement.

Of the 440,000 Americans who die annually from smoking-related disease, 300,000 are aged 65 and older, according to the Centers for Disease Control and Prevention. More than 9% of those 65 and older smoke cigarettes. The CDC in 2002 estimated that 57% of smokers aged 65 and older reported a desire to quit smoking.

The proposed coverage decision specifically applies to patients whose illness is caused or complicated by smoking, such as heart disease, cerebrovascular disease, lung disease, weak bones, or blood clots–diseases that account for the bulk of Medicare spending, according to CMS.

Beneficiaries are also eligible for counseling if they take drugs whose effectiveness is complicated by smoking, including insulins, and medicines for high blood pressure, seizures, blood clots, or depression.

Minimal counseling is already covered at each evaluation and management visit for beneficiaries. Beyond that, Medicare is proposing to cover two cessation attempts per year. “Each attempt may include a maximum of four intermediate or intensive sessions, with the total annual benefit covering up to eight sessions in a 12-month period,” the proposal stated.

CMS estimates the program will cost $11 million annually, a number it expects will be offset by fewer hospitalizations and health problems related to smoking.

In addition to heart disease, emphysema, and stroke, seniors who smoke cigarettes are also more likely to develop problems associated with older age, such as hip fractures, eye cataracts, and facial skin wrinkles. Seniors who try to quit smoking are 50% more likely to succeed than other age groups, and those who quit can reduce their risk of death from heart disease to that of nonsmokers within several years of quitting, Dr. Davis said.

In a statement, CMS Administrator Mark McClellan, M.D., encouraged smokers on Medicare who were starting to experience heart or lung problems, or high blood pressure “to take advantage of this new help–and more is coming.” The agency noted that Medicare's upcoming prescription drug benefit will cover smoking cessation treatments that are prescribed by a physician.

The American Lung Association supported the effort but had concerns that comparable benefits weren't available to younger patients.

The group “applauds anything that will help anyone stop smoking,” spokeswoman Diane Maple told this newspaper. However, a recent study showed that only 10% of employer-sponsored health plans cover smoking cessation programs that combine medications with counseling, she said.

The lung association hopes that private plans will follow Medicare and develop similar programs in the future, she said.

Other caregivers in comments to the agency wanted more details about the program's requirements. Only individuals trained in tobacco counseling and cessation may provide the counseling to beneficiaries, but “how will this training be accredited?” Steven White, a physician assistant, asked. “Will having a general knowledge of smoking and its risks be sufficient?”

The comment period for the proposed coverage decision closed in late January. CMS now has 60 days to review the comments and issue a final policy.

Medicare is investigating ways to help its beneficiaries quit smoking.

The Centers for Medicare and Medicaid Services proposed to extend smoking cessation coverage to beneficiaries who smoke and have been diagnosed with a smoking-related disease–or who are taking certain drugs whose metabolism is affected by tobacco use.

The hope is that Medicare's decision to pay for smoking cessation counseling “will encourage and help seniors quit smoking once and for all,” Ronald Davis, M.D., trustee to the American Medical Association, said in a statement.

Of the 440,000 Americans who die annually from smoking-related disease, 300,000 are aged 65 and older, according to the Centers for Disease Control and Prevention. More than 9% of those 65 and older smoke cigarettes. The CDC in 2002 estimated that 57% of smokers aged 65 and older reported a desire to quit smoking.

The proposed coverage decision specifically applies to patients whose illness is caused or complicated by smoking, such as heart disease, cerebrovascular disease, lung disease, weak bones, or blood clots–diseases that account for the bulk of Medicare spending, according to CMS.

Beneficiaries are also eligible for counseling if they take drugs whose effectiveness is complicated by smoking, including insulins, and medicines for high blood pressure, seizures, blood clots, or depression.

Minimal counseling is already covered at each evaluation and management visit for beneficiaries. Beyond that, Medicare is proposing to cover two cessation attempts per year. “Each attempt may include a maximum of four intermediate or intensive sessions, with the total annual benefit covering up to eight sessions in a 12-month period,” the proposal stated.

CMS estimates the program will cost $11 million annually, a number it expects will be offset by fewer hospitalizations and health problems related to smoking.

In addition to heart disease, emphysema, and stroke, seniors who smoke cigarettes are also more likely to develop problems associated with older age, such as hip fractures, eye cataracts, and facial skin wrinkles. Seniors who try to quit smoking are 50% more likely to succeed than other age groups, and those who quit can reduce their risk of death from heart disease to that of nonsmokers within several years of quitting, Dr. Davis said.

In a statement, CMS Administrator Mark McClellan, M.D., encouraged smokers on Medicare who were starting to experience heart or lung problems, or high blood pressure “to take advantage of this new help–and more is coming.” The agency noted that Medicare's upcoming prescription drug benefit will cover smoking cessation treatments that are prescribed by a physician.

The American Lung Association supported the effort but had concerns that comparable benefits weren't available to younger patients.

The group “applauds anything that will help anyone stop smoking,” spokeswoman Diane Maple told this newspaper. However, a recent study showed that only 10% of employer-sponsored health plans cover smoking cessation programs that combine medications with counseling, she said.

The lung association hopes that private plans will follow Medicare and develop similar programs in the future, she said.

Other caregivers in comments to the agency wanted more details about the program's requirements. Only individuals trained in tobacco counseling and cessation may provide the counseling to beneficiaries, but “how will this training be accredited?” Steven White, a physician assistant, asked. “Will having a general knowledge of smoking and its risks be sufficient?”

The comment period for the proposed coverage decision closed in late January. CMS now has 60 days to review the comments and issue a final policy.

WASHINGTON — A federal advisory panel wants to raise the bar on quality and use of imaging services.

The Medicare Payment Advisory Commission is calling for national standards for physicians who bill Medicare for the interpretation of diagnostic imaging services, and for any provider who bills Medicare for performing such services. MedPAC advises Congress on Medicare payment issues.

At a recent commission meeting, MedPAC analyst Ariel Winter cited evidence of variations in the quality of physician interpretations and reports. “Ensuring that only qualified physicians are paid for interpreting imaging studies should improve diagnostic accuracy and treatment,” he said.

Standards for physicians would be based on education, training, and experience required to properly interpret studies. Private organizations would be charged with administering the standards, Mr. Winter said.

Several MedPAC commissioners questioned whether Medicare should get involved in credentialing or accrediting physicians for interpreting imaging studies. Medicare would be taking on responsibilities that previously fell to licensing boards, specialty society certification, or other private sector organizations, said MedPAC commissioner Sheila Burke, R.N., of the Smithsonian Institution.

Mr. Winter acknowledged that some providers might not be able to meet the standards, might have to invest in newer equipment or higher credentialed technicians, or might have to obtain additional education.

Measuring physicians' use of imaging services should be part of MedPAC's broader effort to profile fee-for-service physicians on their use of all services, Mr. Winter said. Radiologists can influence which tests physicians order, but physicians are important because “they determine whether a test is appropriate,” he said.

Under the MedPAC recommendations, CMS could develop measures of imaging volume for a patient seen by a physician, and could compare these measures to peer benchmarks or clinical guidelines, he said. The agency could then provide this information to the physician in confidence.

“The goal is to encourage physicians who order significantly more tests than their peers to reconsider their practice patterns,” Mr. Winter said.

The panel also voted that the Department of Health and Human Services improve Medicare's coding edits that detect unbundled diagnostic imaging services, and reduce the technical component payment for multiple imaging services performed on contiguous body parts.

Better coding will help Medicare pay more accurately for imaging services and control rapid spending growth, Mr. Winter said. Providers who bill for unbundled or multiple imaging procedures would experience a decrease in Medicare payments.

MedPAC also proposed to strengthen the rules in the Ethics in Patient Referral Act (Stark law), which restrict physicians' investment in the imaging centers to which they refer Medicare or Medicaid patients. The panel voted to include nuclear medicine and positron emission tomography procedures as designated health services under the Stark law. Investment in facilities that provide nuclear medicine services is associated with higher use, creating financial incentives to order services and refer patients to facilities in which the physician is an investor. This undermines fair competition, Mr. Winter said.

Not according to Michael J. Wolk, M.D., president of the American College of Cardiology, who criticized MedPAC for recommending “restrictive tactics” to ratchet down the use of PET scans, CT, and MRI.

Studies that support these recommendations are biased, and specifically exclude examination of these procedures, he said.

In a statement, Dr. Wolk asked that policy makers take more time to look at this issue and evaluate the long-term health benefits of this technology, in addition to the immediate costs.

WASHINGTON — A federal advisory panel wants to raise the bar on quality and use of imaging services.

The Medicare Payment Advisory Commission is calling for national standards for physicians who bill Medicare for the interpretation of diagnostic imaging services, and for any provider who bills Medicare for performing such services. MedPAC advises Congress on Medicare payment issues.

At a recent commission meeting, MedPAC analyst Ariel Winter cited evidence of variations in the quality of physician interpretations and reports. “Ensuring that only qualified physicians are paid for interpreting imaging studies should improve diagnostic accuracy and treatment,” he said.

Standards for physicians would be based on education, training, and experience required to properly interpret studies. Private organizations would be charged with administering the standards, Mr. Winter said.

Several MedPAC commissioners questioned whether Medicare should get involved in credentialing or accrediting physicians for interpreting imaging studies. Medicare would be taking on responsibilities that previously fell to licensing boards, specialty society certification, or other private sector organizations, said MedPAC commissioner Sheila Burke, R.N., of the Smithsonian Institution.

Mr. Winter acknowledged that some providers might not be able to meet the standards, might have to invest in newer equipment or higher credentialed technicians, or might have to obtain additional education.

Measuring physicians' use of imaging services should be part of MedPAC's broader effort to profile fee-for-service physicians on their use of all services, Mr. Winter said. Radiologists can influence which tests physicians order, but physicians are important because “they determine whether a test is appropriate,” he said.

Under the MedPAC recommendations, CMS could develop measures of imaging volume for a patient seen by a physician, and could compare these measures to peer benchmarks or clinical guidelines, he said. The agency could then provide this information to the physician in confidence.

“The goal is to encourage physicians who order significantly more tests than their peers to reconsider their practice patterns,” Mr. Winter said.

The panel also voted that the Department of Health and Human Services improve Medicare's coding edits that detect unbundled diagnostic imaging services, and reduce the technical component payment for multiple imaging services performed on contiguous body parts.

Better coding will help Medicare pay more accurately for imaging services and control rapid spending growth, Mr. Winter said. Providers who bill for unbundled or multiple imaging procedures would experience a decrease in Medicare payments.

MedPAC also proposed to strengthen the rules in the Ethics in Patient Referral Act (Stark law), which restrict physicians' investment in the imaging centers to which they refer Medicare or Medicaid patients. The panel voted to include nuclear medicine and positron emission tomography procedures as designated health services under the Stark law. Investment in facilities that provide nuclear medicine services is associated with higher use, creating financial incentives to order services and refer patients to facilities in which the physician is an investor. This undermines fair competition, Mr. Winter said.

Not according to Michael J. Wolk, M.D., president of the American College of Cardiology, who criticized MedPAC for recommending “restrictive tactics” to ratchet down the use of PET scans, CT, and MRI.

Studies that support these recommendations are biased, and specifically exclude examination of these procedures, he said.

In a statement, Dr. Wolk asked that policy makers take more time to look at this issue and evaluate the long-term health benefits of this technology, in addition to the immediate costs.

WASHINGTON — A federal advisory panel wants to raise the bar on quality and use of imaging services.

The Medicare Payment Advisory Commission is calling for national standards for physicians who bill Medicare for the interpretation of diagnostic imaging services, and for any provider who bills Medicare for performing such services. MedPAC advises Congress on Medicare payment issues.

At a recent commission meeting, MedPAC analyst Ariel Winter cited evidence of variations in the quality of physician interpretations and reports. “Ensuring that only qualified physicians are paid for interpreting imaging studies should improve diagnostic accuracy and treatment,” he said.

Standards for physicians would be based on education, training, and experience required to properly interpret studies. Private organizations would be charged with administering the standards, Mr. Winter said.

Several MedPAC commissioners questioned whether Medicare should get involved in credentialing or accrediting physicians for interpreting imaging studies. Medicare would be taking on responsibilities that previously fell to licensing boards, specialty society certification, or other private sector organizations, said MedPAC commissioner Sheila Burke, R.N., of the Smithsonian Institution.

Mr. Winter acknowledged that some providers might not be able to meet the standards, might have to invest in newer equipment or higher credentialed technicians, or might have to obtain additional education.

Measuring physicians' use of imaging services should be part of MedPAC's broader effort to profile fee-for-service physicians on their use of all services, Mr. Winter said. Radiologists can influence which tests physicians order, but physicians are important because “they determine whether a test is appropriate,” he said.

Under the MedPAC recommendations, CMS could develop measures of imaging volume for a patient seen by a physician, and could compare these measures to peer benchmarks or clinical guidelines, he said. The agency could then provide this information to the physician in confidence.

“The goal is to encourage physicians who order significantly more tests than their peers to reconsider their practice patterns,” Mr. Winter said.

The panel also voted that the Department of Health and Human Services improve Medicare's coding edits that detect unbundled diagnostic imaging services, and reduce the technical component payment for multiple imaging services performed on contiguous body parts.

Better coding will help Medicare pay more accurately for imaging services and control rapid spending growth, Mr. Winter said. Providers who bill for unbundled or multiple imaging procedures would experience a decrease in Medicare payments.

MedPAC also proposed to strengthen the rules in the Ethics in Patient Referral Act (Stark law), which restrict physicians' investment in the imaging centers to which they refer Medicare or Medicaid patients. The panel voted to include nuclear medicine and positron emission tomography procedures as designated health services under the Stark law. Investment in facilities that provide nuclear medicine services is associated with higher use, creating financial incentives to order services and refer patients to facilities in which the physician is an investor. This undermines fair competition, Mr. Winter said.

Not according to Michael J. Wolk, M.D., president of the American College of Cardiology, who criticized MedPAC for recommending “restrictive tactics” to ratchet down the use of PET scans, CT, and MRI.

Studies that support these recommendations are biased, and specifically exclude examination of these procedures, he said.

In a statement, Dr. Wolk asked that policy makers take more time to look at this issue and evaluate the long-term health benefits of this technology, in addition to the immediate costs.

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb, Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible, inefficient, and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to garner federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Projects Take on Health Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission on disparities in medical care. The commission has established four committees to examine the health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information on the commission is available at

www.ama-assn.org/go/healthdisparities

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb, Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible, inefficient, and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to garner federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Projects Take on Health Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission on disparities in medical care. The commission has established four committees to examine the health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information on the commission is available at

www.ama-assn.org/go/healthdisparities

More Talk, Fewer Errors

Most physicians have witnessed medical mistakes—but few are willing to talk about it, results of a study of more than 1,700 physicians, nurses, and clinical care staff indicated. Specifically, 84% of physicians and 62% of nurses and other clinical care providers have seen coworkers taking shortcuts that could be dangerous to patients, and 88% of physicians work with people who show poor clinical judgment. Yet fewer than 10% of providers address problem behavior by colleagues, which routinely includes trouble following directions, poor clinical judgment, or taking dangerous shortcuts. The study was cosponsored by the American Association of Critical-Care Nurses (AACN), and VitalSmarts, a company that specializes in organizational performance and leadership training. “The truth is we must build environments that support and demand greater candor among staff if we are to make a demonstrable impact on patient safety,” AACN President Kathy McCauley, R.N., said in a statement.

Get Sick, Go Bankrupt

It doesn't pay to get sick: Medical problems contributed to about half of all bankruptcies involving 700,000 households in 2001, according to a study published as a Web-exclusive article by the journal Health Affairs. More than 2 million people are directly affected by medical bankruptcies annually. “When medical debts and lost income from illnesses leave families facing a mountain of bills, bankruptcy is their last chance to stop the collection calls and try to put their lives back on track,” said study coauthor Elizabeth Warren, the Leo Gottlieb, Professor of Law at Harvard University, Boston. Most who have been bankrupted by medical problems had health insurance. Among those with private insurance, one-third had lost coverage at least temporarily by the time they filed for bankruptcy. The researchers obtained their information by surveying 1,771 bankruptcy filers and reviewing their court records.

Health Savings Accounts = Debt?

Nearly half of all insured adults who have a high deductible health plan have medical bill problems or debts, compared with less than one-third of those with lower-deductible plans, according to a study from the Commonwealth Fund. “Health savings accounts (HSAs) coupled with high deductible health plans have potential pitfalls, especially for families with low incomes or individuals with chronic health conditions, who are at greater risk of accruing burdensome medical debts and facing barriers to needed health care,” said Commonwealth President Karen Davis. Individuals with high-deductible plans also struggle with access problems, such as not filling a prescription, or skipping a medical test or treatment, due to cost. To prevent medical access problems and debt, Ms. Davis suggested some legislative fixes for HSAs, such as reducing deductibles for lower-income families and requiring provider discounts for uninsured, low-income families.

New HHS Chief and Medicaid

Medicaid reform will be high on the agenda for new Health and Human Services Secretary Michael O. Leavitt. “Medicaid is not meeting its potential,” Mr. Leavitt, former governor of Utah and former head of the Environmental Protection Agency, said at health care congress sponsored by the Wall Street Journal and CNBC. “It's rigid, inflexible, inefficient, and, worse yet, not financially sustainable. We need to have a serious conversation about Medicaid.” Among the ideas he's considering are negotiating reductions in the prices Medicaid pays for prescription drugs and closing loopholes relating to coverage for long-term care. He also wants to stop states from manipulating Medicaid rules to garner federal matching funds. President Bush in the meantime focused on medical liability reform and health savings accounts in his State of the Union address, asking Congress to move forward on tax credits to help low-income workers buy insurance, and on establishing community health centers in impoverished counties.

Older Patients and the Internet

Online health information has the potential to become an important resource for seniors “but it's not there yet,” the Kaiser Family Foundation reported in a survey of 1,450 adults aged 50 and older. Of the 583 respondents aged 65 and older, less than a third had ever gone online. But more than two-thirds of the next generation of seniors (50-64 years) has done so, indicating that online resources may soon play a much larger role among older Americans. Seniors whose annual household income is under $20,000 a year are much less likely to have gone online (15%) as opposed to those with incomes of $50,000 or more (65%). “We know that the Internet can be a great health tool for seniors, but the majority are lower-income, less well-educated, and not online,” said Drew Altman, the foundation's president and chief executive officer.

Projects Take on Health Disparities

The American Medical Association has teamed up with the National Medical Association and the National Hispanic Medical Association to create a commission on disparities in medical care. The commission has established four committees to examine the health care system and work to improve patient care. Two projects are underway: a survey of physicians about health care disparities and the factors causing them, and a promotion of selected training programs that use case study work, self-assessment activities, and video vignettes to increase physicians' cultural competency. More information on the commission is available at

www.ama-assn.org/go/healthdisparities

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission has recommended.

In light of challenges facing Medicare, “nothing is more important” than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting. “Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation.”

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality. At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

“Physicians are ready for a pay-for-performance program,” Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said. These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

“Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients,” she said. “This is true for primary care and especially for patients with chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care.”

Considering that it's the only information collected on physicians, Ms. Milgate noted that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. “However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician.”

Because these actions would redistribute resources already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, Ms. Milgate pointed out.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be “another irritation, rather than an incentive.”

Are all physicians equally ready for such a system? “I'm not sure that's true,” he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner representing the American College of Physicians, said in an interview. “However, the insistence of payers for incentives to promote quality is something that can't be ignored.”

Although a differential payment system that rewards higher quality “is almost certainly in our future,” Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments “seem to apply more to primary care physicians than other specialties,” observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. “The question is how we would differentiate the rewards for different specialties even on the structural measures.

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but “providers could find such a requirement to be overly burdensome,” MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care. “Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care,” Ms. Milgate said.

Rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies who manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners.

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission has recommended.

In light of challenges facing Medicare, “nothing is more important” than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting. “Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation.”

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality. At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

“Physicians are ready for a pay-for-performance program,” Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said. These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

“Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients,” she said. “This is true for primary care and especially for patients with chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care.”

Considering that it's the only information collected on physicians, Ms. Milgate noted that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. “However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician.”

Because these actions would redistribute resources already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, Ms. Milgate pointed out.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be “another irritation, rather than an incentive.”

Are all physicians equally ready for such a system? “I'm not sure that's true,” he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner representing the American College of Physicians, said in an interview. “However, the insistence of payers for incentives to promote quality is something that can't be ignored.”

Although a differential payment system that rewards higher quality “is almost certainly in our future,” Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments “seem to apply more to primary care physicians than other specialties,” observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. “The question is how we would differentiate the rewards for different specialties even on the structural measures.

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but “providers could find such a requirement to be overly burdensome,” MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care. “Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care,” Ms. Milgate said.

Rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies who manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners.

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission has recommended.

In light of challenges facing Medicare, “nothing is more important” than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting. “Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation.”

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality. At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

“Physicians are ready for a pay-for-performance program,” Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said. These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

“Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients,” she said. “This is true for primary care and especially for patients with chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care.”

Considering that it's the only information collected on physicians, Ms. Milgate noted that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. “However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician.”

Because these actions would redistribute resources already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, Ms. Milgate pointed out.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be “another irritation, rather than an incentive.”

Are all physicians equally ready for such a system? “I'm not sure that's true,” he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner representing the American College of Physicians, said in an interview. “However, the insistence of payers for incentives to promote quality is something that can't be ignored.”

Although a differential payment system that rewards higher quality “is almost certainly in our future,” Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments “seem to apply more to primary care physicians than other specialties,” observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. “The question is how we would differentiate the rewards for different specialties even on the structural measures.

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but “providers could find such a requirement to be overly burdensome,” MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care. “Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care,” Ms. Milgate said.

Rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies who manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners.

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission recommended.

In light of the challenges facing Medicare, "nothing is more important" than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting.

"Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation," he said.

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality.

At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

"Physicians are ready for a pay-for-performance program," Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said.

These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

"Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients," she said.

"This is true for primary care and especially for patients who have chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care," she commented.

Considering that it is the only information collected on physicians, Ms. Milgate pointed out that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. "However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician."

Because these actions would redistribute resources that are already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, she indicated.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be "another irritation, rather than an incentive."

Are all physicians equally ready for such a system? "I'm not sure that's true," he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner who represents the American College of Physicians, said in an interview.

"However, the insistence of payers for incentives to promote quality is something that can't be ignored," he told this newspaper.

Although a differential payment system that rewards higher quality "is almost certainly in our future," Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments "seem to apply more to primary care physicians than other specialties," observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. "The question is how we would differentiate the rewards for different specialties even on the structural measures."

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but "providers could find such a requirement to be overly burdensome," MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care.

"Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care," Ms. Milgate said.

Financial rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies that manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners at the meeting.

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission recommended.

In light of the challenges facing Medicare, "nothing is more important" than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting.

"Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation," he said.

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality.

At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

"Physicians are ready for a pay-for-performance program," Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said.

These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

"Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients," she said.

"This is true for primary care and especially for patients who have chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care," she commented.

Considering that it is the only information collected on physicians, Ms. Milgate pointed out that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. "However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician."

Because these actions would redistribute resources that are already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, she indicated.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be "another irritation, rather than an incentive."

Are all physicians equally ready for such a system? "I'm not sure that's true," he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner who represents the American College of Physicians, said in an interview.

"However, the insistence of payers for incentives to promote quality is something that can't be ignored," he told this newspaper.

Although a differential payment system that rewards higher quality "is almost certainly in our future," Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments "seem to apply more to primary care physicians than other specialties," observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. "The question is how we would differentiate the rewards for different specialties even on the structural measures."

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but "providers could find such a requirement to be overly burdensome," MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care.

"Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care," Ms. Milgate said.

Financial rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies that manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners at the meeting.

WASHINGTON — Congress should establish a quality incentive payment policy for Medicare physicians, the Medicare Payment Advisory Commission recommended.

In light of the challenges facing Medicare, "nothing is more important" than distinguishing between providers based on performance, MedPAC Chairman Glenn Hackbarth said at a commission meeting.

"Providers are not all created equal—there's abundant evidence that some providers do a better job than others. To continue to pay them as if they're all performing equally well is a tragic situation," he said.

And that was just one of several of the commission's recommendations aimed at establishing a pay-for-performance system across health care channels, using information technology in Medicare initiatives to financially reward providers on the basis of quality.

At press time, the recommendations were scheduled to appear in MedPAC's March report to Congress.

"Physicians are ready for a pay-for-performance program," Karen Milgate, a MedPAC research director said at the meeting.

Those participating in such a program could use various facets of information technology to manage patients, such as registries to track patients and identify when they need certain preventive services, or systems for detecting drug interactions, Ms. Milgate said.

These types of information have the potential to improve important aspects of care, and increase physician ability to assess and report on their care.

"Without information technology, it would be difficult for physicians to keep up with and apply the latest clinical science and appropriately track and follow up with patients," she said.

"This is true for primary care and especially for patients who have chronic conditions. But [it is] also true for surgeons and other specialists, to ensure follow-up after acute events and coordination with other settings of care," she commented.

Considering that it is the only information collected on physicians, Ms. Milgate pointed out that claims-based measures could be used to determine whether beneficiaries received appropriate follow-up care.

The claims-based process puts no burden on physicians and research shows it's widely available for a broad group of beneficiaries and physicians, she said. "However, the depth of information on each kind of physician is unclear and we do know that claims based measures are not available for every single type of physician."

Because these actions would redistribute resources that are already in the system, they would not affect spending relative to current law, although they may increase or lower payments for providers, depending on the quality of their care, she indicated.

Nicholas Wolter, M.D., a MedPAC commissioner from Billings, Mont., cautioned that physicians may be reluctant to embrace yet another change that would limit their revenue, after the sustainable growth rate. Pay for performance might be "another irritation, rather than an incentive."

Are all physicians equally ready for such a system? "I'm not sure that's true," he added.

Smaller practices in particular may not be ready to provide the clinical information necessary for a mature pay-for-performance initiative, Alan Nelson, M.D., a commissioner who represents the American College of Physicians, said in an interview.

"However, the insistence of payers for incentives to promote quality is something that can't be ignored," he told this newspaper.

Although a differential payment system that rewards higher quality "is almost certainly in our future," Medicare should proceed with caution on this initiative, taking care to not increase the administrative burden—and always being aware of unintended consequences, Dr. Nelson said.

Most of these information technology developments "seem to apply more to primary care physicians than other specialties," observed commissioner William Scanlon, Ph.D., a health policy consultant from Oak Hill, Va. "The question is how we would differentiate the rewards for different specialties even on the structural measures."

He suggested that Congress create a project to test these rewards on an ongoing basis, to accumulate evidence that it was working effectively among the various specialties.

Mandating use of information technology could accelerate use, but "providers could find such a requirement to be overly burdensome," MedPAC analyst Chantal Worzala said. Such requirements could become appropriate as the health care market develops.

The panel also recommended that prescription claims data from Medicare's Part D program be available for assessing the quality of pharmaceutical and physician care.

"Linking prescription data with physician claims could help identify a broader set of patients with certain conditions, and help determine whether they filled or refilled a prescription and received appropriate pharmaceutical care," Ms. Milgate said.

Financial rewards could also be given to providers who improve outcomes in care for their patients in other settings, such as physicians whose patients do better in hospitals, or home health agencies that manage their patients' care transition to nursing homes, MedPAC analyst Sharon Bee Cheng told commissioners at the meeting.

WASHINGTON — Physicians should be reimbursed retroactively for any payment miscalculations that occurred under the new system that Medicare is using to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The "average sales price" (ASP) is something federal regulators "are concocting, and they don't know how accurate it's going to be," said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said. PPAC is an independent panel that advises CMS on physician payment issues.

The average sales price was authorized by the Medicare Modernization Act of 2003 to replace the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%, although in 2006, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process.

CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis. Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

"Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100," she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April—and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said. As a result, the agency may end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

"GAO has always said that everything's going to be fine" with the ASP, Dr. McAneny said. Nevertheless, "we need a plan B in case they're wrong."

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered. Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

"This will be very helpful to the physician community—not just oncology—but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from," Dr. McAneny said.

WASHINGTON — Physicians should be reimbursed retroactively for any payment miscalculations that occurred under the new system that Medicare is using to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The "average sales price" (ASP) is something federal regulators "are concocting, and they don't know how accurate it's going to be," said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said. PPAC is an independent panel that advises CMS on physician payment issues.

The average sales price was authorized by the Medicare Modernization Act of 2003 to replace the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%, although in 2006, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process.

CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis. Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

"Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100," she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April—and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said. As a result, the agency may end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

"GAO has always said that everything's going to be fine" with the ASP, Dr. McAneny said. Nevertheless, "we need a plan B in case they're wrong."

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered. Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

"This will be very helpful to the physician community—not just oncology—but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from," Dr. McAneny said.

WASHINGTON — Physicians should be reimbursed retroactively for any payment miscalculations that occurred under the new system that Medicare is using to reimburse for in-office infusions, the Practicing Physicians Advisory Council recommended.

The "average sales price" (ASP) is something federal regulators "are concocting, and they don't know how accurate it's going to be," said PPAC member Barbara L. McAneny, M.D., an oncologist from Albuquerque, N.M., who drew up the recommendation.

For that reason, the Centers for Medicare and Medicaid Services should establish a correction factor for each quarter it updates pricing on the ASP, to prevent physicians from treating patients at a loss or being put in the position of denying treatment, she said. PPAC is an independent panel that advises CMS on physician payment issues.

The average sales price was authorized by the Medicare Modernization Act of 2003 to replace the former system of overpayments for drugs and underpayments for their administration. The intent was to make fair payments for both services.

This year and next, Medicare will pay physicians the ASP plus 6%, although in 2006, physicians will have the option of obtaining the drugs directly from a supplier selected by Medicare through a competitive bidding process.

CMS officials told the panel that the agency would update pricing for the ASP on a quarterly basis. Dr. McAneny countered that this wouldn't allow for any mistakes in pricing made along the way.

"Suppose the ASP is set at $60 for a drug, but you can only purchase that drug for $100," she later said in an interview. This means physicians would be getting paid only $60 for that drug from January through April—and losing $40 every time they administer the drug.

CMS might be able to correct the price on April 1, but that doesn't compensate for the losses physicians incurred over the first quarter of the year, Dr. McAneny said. As a result, the agency may end up getting complaints from half the physicians in the country about the cost of a drug.

By putting in a correction mechanism, the agency can make the change retroactive, she recommended.

A report from the Government Accountability Office indicated that physicians may not get shortchanged under the ASP. Medicare payments for cancer drugs may decline next year, but payments are actually expected to exceed physicians' costs by 6% on average, the GAO found.

The American Society of Clinical Oncology responded that the study underreported some costs and the report's methodology was flawed.

"GAO has always said that everything's going to be fine" with the ASP, Dr. McAneny said. Nevertheless, "we need a plan B in case they're wrong."

The ASP replaces the average wholesale price, a number that drug makers had been giving to the government for each drug administered. Medicare in the past paid physicians 95% of the average wholesale price for in-office administration of a drug to a Medicare beneficiary; however, the physician was not paid an administration fee.

The ASP system comes with mixed benefits: Physicians now will get paid an administration fee but they won't be getting paid as much for the drugs themselves as they were under the average wholesale price system.

PPAC also requested that physicians be allowed Internet access to a list of drugs that CMS compiled by manufacturer to determine ASP.

"This will be very helpful to the physician community—not just oncology—but for everybody who wants to purchase drugs … under the average selling price, and [to] know who they can purchase these drugs from," Dr. McAneny said.