IOM recommends pay-for-performance for Medicare physician payments

A recent report from the Institute of Medicine (IOM) recommends that Congress require the Centers for Medicare & Medicaid Services to cut its physician payments and pool the money to award those who demonstrate "high-quality, patient-centered and efficient care," reported Modern Healthcare (9/25/2006). The IOM left the decision of how much to reduce payments to Congress and also noted that the amount would have to be large enough to prompt physicians into action.

The recommendation is likely to be a hard sell for physician groups who have been working hard to fight a 5.1% cut in Medicare reimbursements scheduled to take effect next year. Despite the flak from medical groups, Robert Reischauser, president of the Urban Institute and a co-chairman on the IOM panel that made the pay-for-performance recommendation, believes that this model could be accepted by physicians "as long as it's done right."