Medicare : physician incentive payments by hospitals could lead to abuse : report to the Chairman, Subcommittee on Health, Committee on Ways and Means, House of Representatives

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United States. General Accounting Office

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Summary

During the past year, two physician incentive plans offered by hospitals have come under investigation for possible violation of Medicare law, one by the Department of Justice and the other by the ...

During the past year, two physician incentive plans offered by hospitals have come under investigation for possible violation of Medicare law, one by the Department of Justice and the other by the Department of Health and Human Services' Office of Inspector General. These two cases have raised questions about the adequacy of the Medicare statute to deter abuses that may arise under the incentives of the Medicare prospective payment system for hospitals. At the request of the Chairman, Subcommittee on Health, House Committee on Ways and Means, GAO obtained information on existing and proposed physician incentive plans and analyzed the plans to assess their legality under current law and determine the potential abuses that could arise under them in view of the changed incentives under prospective payment. This report discusses operational and proposed incentive plans offered to physicians by hospitals and the features of such plans that could increase the risk of them having detrimental effects on quality of care for Medicare patients suggeswted are possible modifications to Medicare law that might deter physician incentive plans from providing too strong an incentive to undertreat patients.

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