The Medicare Payment Advisory Commission told Congress that out-of-control Medicare costs are partly due to the program’s fee-for-service payment system, which rewards more — even redundant — care, but doesn’t provide incentives for improving care.
“Medicare’s payment systems do not embody incentives for providers to produce appropriate, high-quality care at an efficient price. Rather, incentives induce providers to provide more care, without encouraging cooperation or rewarding quality,” MedPAC chairman Glenn Hackbarth wrote in the cover letter to the nearly 300-page “Improving Incentives in the Medicare Program” report, submitted to Congress June 15.