A study published in the Archives of Internal Medicine found that 88 percent of physicians accepted new privately insured patients in 2008, down from 93 percent in 2005.  The authors cited low reimbursement rates and significant administrative burdens as possible reasons for the decline.  The study also notes that rate of acceptance declined less for Medicare beneficiaries, dropping from 96 to 93 percent between 2005 and 2008.

Bishop, Tara F. et. al. (2011). Declines in physician acceptance of Medicare and private Coverage. Archives of Internal Medicine, 171 (12): 1117 - 1119. doi:10.1001/archinternmed.2011.251. http://archinte.ama-assn.org/cgi/content/short/171/12/1117

Authors: Tara F. Bishop, Alex D. Federman and Salomeh Keyhani.

On July 28, the Pew Center on the States’ non-partisan non-profit news service Stateline released a primer on Medicaid financing, exploring the changes offered under the Obama Administration’s plan to “blend” rates for Medicaid and the Children’s Health Insurance Program (CHIP).  Offered as an alternative to the GOP budget plan that passed in the U.S. House on April 15, rather than convert Medicaid into a block grant program, President Obama’s proposal would blend the CHIP rate, the existing Federal Medical Assistance Percentage (FMAP) for Medicaid, and the rate set to apply to newly covered Medicaid enrollees under health reform’s 2014 expansion.  Though the Administration has yet to release details of the blending plan, the primer examines the impact of potential rate blending on states as well as initial reactions from state lawmakers.

From the report:

To states, the most significant part of Obama’s plan is a change in a few key funding formulas that determine how many federal dollars states get for Medicaid. Obama’s so-called “blended rate” would simplify the way federal money is divvied among the states. But it also would shift a greater share of Medicaid spending to the states —which has riled numerous governors and nearly everyone in the health care community. How would the blended rate proposal change Medicaid? Here’s a primer on the way Medicaid is currently financed, and the possible impacts of the administration’s plan.

Full report: Medicaid Explained: How a 'Blended Rate' Would Work

Stateline. (2011). Medicaid explained: how a 'blended rate' would work. Vestal, Christine.

On July 25, the Commonwealth Fund released a brief examining private sector accountable care organizations’ (ACO) experiences implementing shared payer-provider risk payment models.  Noting that the national health care reform law implements such a model under the Medicare Shared Savings Program, the brief posits that providers currently lack the necessary infrastructure to successfully assume and manage risk.  The authors conclude that providers need improved data and analytic capabilities to negotiate appropriate risk-sharing arrangements with payers and adequately manage risk for affected patient populations.

From the report:

The Patient Protection and Affordable Care Act is serving as a catalyst in health care for new approaches to measuring performance and value, promoting wider adoption of health information technology (HIT), and developing models for delivering and paying for care more effectively and efficiently. In particular, the Medicare Shared Savings Program created by the legislation establishes financial incentives for accountable care organizations (ACOs) to provide coordinated, well-integrated care. Anticipation of the program has caused a flurry of activity among providers, purchasers, and payers.

The Commonwealth Fund. (2011). Promising payment reform: risk-sharing with accountable care organizations.  Delbanco, Suzanne F.

On June 1, the Institute of Medicine (IOM) released a report examining geographic differences in Medicare reimbursements, noting that Medicare adjusts its fee-for-service (FFS) reimbursements to reflect regional cost disparities but arguing that the current adjustment system is flawed.  To properly address payment adjustment problems, the IOM concludes that Medicare must make significant changes to its method for assessing these cost differences.  In particular, the authors found that some of Medicare’s 89 payment areas include both expensive urban areas and less expensive outlying areas.  IOM’s report offers recommendations for adjusting those areas and improving calculations of provider costs to more accurately provide reimbursements and avoid overspending.

From the report:

Medicare is the largest health insurer in the United States, providing coverage for 39 million people aged 65 and older and eight million people with disabilities. In 2010, the program made up approximately 15 percent of the federal budget, at an estimated cost of $500 billion.

Although Medicare is a national program, it adjusts fee-for-service payments to hospitals, physicians, and other clinical practitioners according to the geographic locations in which they practice. This adjustment accounts for differences in the price of doing business, such as staff compensation and rent, that vary between urban and rural areas and by region.

Full Report: Geographic Adjustment in Medicare Payment (PDF | 307 KB)

Institute of Medicine. (2011). Geographic adjustment in Medicare payment.

On June 15, the Medicare Payment Advisory Commission (MedPAC) issued this report, offering recommendations for reforming Medicare’s payment system to improve quality and efficiency.  Among other recommendations, MedPAC suggests bundling payments for related health services and directly linking payments to health service quality.  The authors also offer recommendations for incentives to reduce excessive provision of health services under the current fee-for-service (FFS) reimbursement model.  Finally, MedPAC proposes improving dual eligibles’ care quality through more integrated and coordinated health services.

From the report:  

As part of its mandate from the Congress, each June the Commission reports on Medicare payment systems and on issues affecting the Medicare program, including changes in health care delivery and the market for health care services. In this report, we examine several issues within Medicare itself, including: 

• payments for physician services, with one chapter that considers alternatives to the sustainable growth rate (SGR) system and another on ways to improve payment accuracy and promote appropriate use of ancillary services;
• the design of Medicare’s traditional fee-for-service (FFS) benefit package and its impact on beneficiaries and the program overall; and 
• Medicare’s technical assistance to health care providers for quality improvement.

Full Report: Medicare and the Health Care Delivery System (PDF | 1.65 MB)

Medicare Payment Advisory Commission. (2011). Medicare and the health care delivery system.

From the report:  

The Congressional Budget Office (CBO) projects that, under current law, payment rates for physician services will be reduced by 29.4 percent in 2012. That large reduction called for under current law follows several years of legislative action to either maintain or increase physician payment rates under the Medicare program when those rates were otherwise scheduled to decrease under the provisions of law known as Medicare’s Sustainable Growth Rate (SGR) mechanism. Such legislative actions have overridden the SGR.

Full Report: Medicare’s Payments to Physicians: The Budgetary Impact of Alternative Policies (PDF | 127 KB)

Congressional Budget Office. (2011). Medicare's payments to physicians: the budgetary impact of alternative policies.