“Moving from volume to value” is health care reform’s latest mantra. Policymakers hope to replace fee-for-service systems with value-based approaches that reward improved outcomes achieved at lower cost. Ground zero in these efforts is the Medicare Physician Fee Schedule (MPFS).
What payment reformers often fail to recognize is that the specific MPFS payment rates have important implications for Medicare and its beneficiaries. The relative payment levels for the thousands of service codes and the absence of payment for other activities powerfully influence how physicians spend their time — and their tendency to perform unneeded tests and procedures. The mix of services that physicians provide under a particular fee schedule can affect value at least as much as any improvements derived from rewarding physicians on the basis of quality measures — the approach Congress took in the Medicare Access and CHIP Reauthorization Act of 2015.
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