Medicare Bonuses

Physician's Money Digest, March15 2004, Volume 11, Issue 5

The new Medicare reform law has goodies for justabout everyone. Although the bulk of the generalmedia coverage has revolved around the new prescriptiondrug benefit, the law also provides for bonuspayments to physicians and hospitals that meet certainperformance standards. The bill requires health careorganizations to provide quality reporting based onstandards developed by the Institute of Medicine ofthe National Academy of Sciences (www.iom.edu),which is also charged with coming up with a plan thatwould provide doctors with additional Medicare paymentsfor meeting or exceeding these performancestandards. Under the Medicare law, the new Medicareregional preferred provider organizations (PPOs) thatwill appear on the scene in 2006 must measure andreport data on quality issues. Although HMOs havemade quality statistics available, PPOs have resisteddoing so, on the basis that their looser structure madequality control more difficult.