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Changes Needed in Medicare Payments to Physicians Under the End Stage Renal Disease Program

HRD-85-14 Published: Feb 01, 1985. Publicly Released: Feb 01, 1985.
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Highlights

GAO reviewed a new method of physician reimbursement in the End Stage Renal Disease (ESRD) program, which is administered by the Health Care Financing Administration (HCFA). Since August 1983, ESRD physicians have been reimbursed for outpatient care on the basis of a monthly capitation payment and for inpatient care on a fee-for-service basis. GAO evaluated the HCFA methodology for deriving the monthly capitation payment to determine if it accurately reflected the services provided and evaluated whether physician payments were properly determined.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Health and Human Services The Secretary of Health and Human Services should direct the Administrator, HCFA, to modify the monthly capitation payment rate taking into consideration GAO survey data on related physician involvement with home and facility patients.
Closed – Implemented
Effective August 1, 1986, The Department of Health and Human Services (HHS) modified the monthly capitation payment rate, reducing it by an average of $14. HHS referred to the GAO findings as the reason for acting.
Department of Health and Human Services If the recommendation for a total capitation system is not accepted, the Secretary of Health and Human Services should direct the Administrator, HCFA, to either: (1) eliminate the special dialysis visit procedure codes and pay physicians for the services provided to hospitalized ESRD patients during dialysis on the basis of hospital visit codes; or (2) modify the dialysis visit codes to reflect the nature and scope of physician services provided during dialysis and the amounts other physicians receive for the same or similar services.
Closed – Implemented
HCFA issued revised instructions for using special dialysis codes, but in effect no significant change was made nor will savings result.
Department of Health and Human Services The Secretary of Health and Human Services should direct the Administrator, HCFA, to develop and implement a total capitation system to reimburse ESRD physicians for all routine physician services provided to ESRD beneficiaries. Such a system should be based on the current monthly capitation payment rates adjusted for home patient care and the value of routine hospital visits, as discussed in this report.
Closed – Implemented
HHS stated that it will initiate demonstration projects to collect the data necessary to implement this recommendation. Earlier plans to conduct such projects were delayed by funding and other problems. GAO believes that it is unlikely that action will be taken.

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Topics

Health Care
Capitation (medical care)DialysisHealth care cost controlHealth care servicesHome health care servicesMedicareOverpaymentsPhysiciansUrologic diseasesOutpatient care