Medicare payment policies have increased the cost of seeing a doctor, are inherently inflationary and need to be reformed, a congressional study says.
A report by the congressional Office of Technology Assessment said Thursday it is time Congress devised a new formula to pay doctors` fees and to discourage more costly health care for the elderly.
”Medicare`s payment methods have fueled increases in expenditures for physican services, which are now one of the most rapidly growing parts of the federal budget,” the report said.
”The method of (using) customary, prevailing and reasonable charge payments is inherently inflationary and contains incentives for providers to use additional and more expensive services.”
Similar fault was found with Medicare`s policy of paying fees for each medical service performed, and the report criticized the policy of basing the cost of services on what doctors have charged in the past.
The report suggested a number of changes, including payment based on a fixed-fee schedule and payment for packages of services.
It said Congress also should consider a commission to examine and help implement alternative payment reforms for doctors` services.
”Past policies regarding health insurance coverage and payment methods have also played a major role in rising medical expenditures,” the report said. ”In general, health insurance dulls the sensitivity of consumers, physicians and other providers to the financial implications of using medical care.”
Since 1980, total Medicare expenditures for doctor services have risen 16 percent each year, and will reach an estimated $19 billion in 1987.
The cost of providing Medicare to 29 million older Americans has come under repeated scrutiny by the administration because it takes such a big chunk of the federal budget.
President Reagan`s fiscal 1987 budget calls for increasing premiums and cutting some payments to save money–a proposal already under fire by advocates for the elderly. Reagan`s budget proposal calls for $4 billion in cuts next year from the current $70 billion Medicare budget
