(Editor's note: This is the first of two parts. Part 2 can be found here.)

In our July column, we reported that Senator John Rockefeller (D-WV), introduced legislation designed to elevate the Medicare Payment Advisory Commission (MedPAC), currently an advisory body, to executive branch status with the power to implement its evidence-based recommendations.

Warning that health care costs are spiraling out of control, Rockefeller reasoned that "Payment reforms, particularly in Medicare, are the cornerstone for driving quality improvement and improving the efficiency of our health care system." Elevating MedPAC would likely streamline new policy implementation.

One frequently debated policy issue centers on changing Medicare fee-for-service to reimbursement based on successful outcomes. Spending research suggests that quantity of tests and procedures doesn't necessarily translate to the highest quality results.

Mayo Clinic, for example, is often cited as a role model in producing the highest levels of capability and quality, yet falling in the lowest fifteenth percentile of Medicare spending.

We contacted Robert A. Berenson, MD, FACP, a current commissioner on MedPACs 17-member agency, to ask him about the probability, irrespective of legislation adoption, for Medicare reimbursement revision and subsequent implications for health information professionals.

 "There are a lot of proposals for changing the payment structures," Dr. Berenson explained, "going to bundled payments, going to capitated payments, going to shared savings, going to pay-for-performance. I mean a lot of those things are in play, and I certainly don't have any insight as to what's likely to come out. But clearly there will be something new. How much of it gets built into the basic way things are done and how much will be done as pilots and demonstrations is unclear, but there's a lot of potential for change."

Dr. Berenson commented on new demands for HIM professionals as reforms in health care might play out. "Clearly the critique of fee-for-service is that it just pays for volume and doesn't pay for performance or quality," he commented. "And so to the extent that payment changes, information ... the information content of the visit, or of the encounter, or of the procedure ... there will be a demand for that kind of information. It will require information experts to be able to respond to this sort of general demand for paying for performance."

We asked Dr. Berenson to comment on whether he believes implementing the DRG-based system was an effective payment method for health care delivery. It is his belief that the DRG system at its time was very helpful. "I think it's fair to say that what tends to happen is that whether it's DRGs or RBRVS, they're not sort of tie traded and fine tuned over time, enough, that they should be."

 "Most every other country has gone to a DRG-based system. They've moved away from just putting hospitals on budgets, to actually providing the incentives that are within the DRG payment system. So it clearly has helped reform the health care system.

 "The challenge now is to fine tune the categories enough so that it does a better job of measuring case mix; and, that somebody, then, has to address the incentive within a DRG system to have, perhaps, unnecessary hospitalizations in order to get a whole new payment. So it needs to be fine tuned. I think there are ways to protect against that, but they are currently not in the system."

Commenting on how bundling might play a part in physician fee-for-service payment reform, Dr. Berenson suggested that it is likely different concepts will be tested. He sited the readmission rate statistic as an example where we might see potential change.

"I've suggested that for readmissions, instead of actually measuring every hospital's readmission rate, you simply say that for a readmission within 15 days, we're going to pay 60 percent of the DRG, which is sort of an estimate of the variable cost of that admission," he explained.

"You just build it into the basic payment system, and you suddenly change the incentives around doing a better job for discharging patients.

 "So I think there are things that can be done to sort of extend ... to provide some period of time after the hospitalization ... that that gets built into the DRG payment itself," he speculated.

 "I think it's more challenging to actually bundle the payments for doctors and hospitals together, which is what's being talked about a lot. That strikes me as having to deal with different cultures and, in some places, overt animosity right now. But, I think that's going to be tested as well. So there are different forms of bundling, but I think the DRG system works pretty well."

Lynn Lyons is public affairs director, Laguna Medical Systems Inc.