GAO: Physician profiling could help CMS monitor Medicare spending

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The Government Accountability Office (GAO) Monday released a report outlining how profiling physicians to give them confidential feedback on their Medicare spending could potentially save money for the Centers for Medicare & Medicaid Services (CMS).

The report’s primary focus was on four specialties: cardiology, diagnostic radiology, internal medicine and orthopedic surgery in four metropolitan areas chosen for their geographical diversity–Miami, Phoenix, Pittsburgh and Sacramento, Calif. Using a risk adjustment model, the GAO regulated beneficiary health conditions so the data would not be misrepresented, as sick beneficiaries go through more resources than healthy beneficiaries. The study was restricted to physicians participating in Medicare fee-for-service (FFS).

The office issued the report due to recent concerns surrounding rising healthcare costs.

“Physicians play a central role in the generation of healthcare expenditures, through both the services they provide and the services they order, including hospital admissions, diagnostic tests, and referrals to other physicians,” said the GAO. “The evidence suggests that some of the spending for services provided and ordered by physicians may not be warranted.”

Using a per capita approach, the analysis investigated practice patterns of the physicians in the aforementioned specialties and how resources were utilized. Also studied was the extent to which the feedback reports influence a physicians’ future behavior.

The GAO concluded that specialist physicians demonstrated stability in their resource use, despite a high patient turnover rate. The per capita method was also determined to be useful in distinguishing patterns of resource use according to the various types of services provided by the specialists. This method does not reflect the population of the physicians’ patients in a given year.

While the confidential feedback reports were determined to have no more than a moderate influence on physicians’ behavior, the analysis suggests that CMS could use profiling to improve the effectiveness of Medicare. Congress has instructed the Medicare program to begin profiling physicians, as it has already been adopted by some private insurance companies as a means to improve competent resource use.

In support of the report's findings, previous reports conducted by the GAO on physician profiling reached parallel conclusions – that profiling could help improve the success of Medicare.  Moreover, consistent patterns were found across specialties in varying metropolitan areas. Stability in resource use on part of the physicians over time was also revealed – if physicians demonstrated a high resource use in one year, it remained high the next year, and conversely, if physicians demonstrated a low resource use, it remained low the next year.

“We recommended that the Administrator of CMS develop a profiling system to identify individual physicians with inefficient practice patterns and provide incentives for physicians to improve the efficiency of care they provide,” the report stated.

CMS largely agreed with the conclusions in the report, according to the GAO.