COUNTERING PAY-FOR-PERFORMANCE'S UNINTENDED CONSEQUENCES BY RETHINKING THE PHYSICIAN'S DUTY TO DISCLOSE.

Author:Dick, Mariah
 
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  1. INTRODUCTION II. UNDERSTANDING MACRA'S KEY FEATURES AND VULNERABILITIES A. Design Elements Common to All Health Care Pay-for-Performance Models B. MACRA's P4P Design Elements C. Examining MA CRA's Potential Vulnerabilities to Unintended Consequences 1. Influenza Vaccines 2. High Blood Pressure 3. Sinusitis III. UNINTENDED CONSEQUENCES ASSOCIATED WITH PAY-FOR PERFORMANCE COMPENSATION MODELS A. Negative Effects Associated with Non-Health Care Pay-for Performance Models B. Unintended Consequences Associated with Health Care P4P Models IV. PHYSICIAN DISCLOSURE STANDARDS AND THEIR ROLE IN COUNTER BALANCING P4P'S UNINTENDED CONSEQUENCES A. Background on Informed Consent B. History of Informed Consent as a Legal Doctrine 1. The Purely Professional Standard of Physician Disclosure 2. The Reasonable Patient Standard of Physician Disclosure 3. Modern Standard for Physician Disclosure C. Adopting the Reasonable Patient Standard of Disclosure in All Jurisdictions V. CONCLUSION I. INTRODUCTION

    Beginning in the early 2000s, pay-for-performance compensation models started garnering more attention as more individuals expressed dissatisfaction with the fee-for-service model then in place. (1) At the same time that pay-for-performance models began gaining traction in the health care industry, they were also being implemented in the corporate sector. (2)

    Though researchers studying pay-for-performance models in the health care industry have focused mainly on the efficacy of these programs, a slew of scandalous headlines in the corporate sector have clued us into the inherent flaws present in the pay-for-performance compensation model. In September 2016, Wells Fargo employees, in response to an incentive compensation structure, opened millions of new customer accounts without permission. (3) Wells Fargo has since eliminated the performance goals that inspired the scandal. (4) Incentive compensation schemes, like pay-for-performance, have also been identified as a root cause of the 2008 credit crisis and the UBS tax fraud scandal. (5) But, these ill-effects have not been relegated to the corporate sector. In 2013, thirty-five school district employees in Atlanta were indicted based on accusations that they conspired to cheat on state standardized tests. (6) Teachers and administrators allegedly inflated scores to meet performance metrics and to receive financial rewards tied to meeting those goals. (7)

    These scandals, and others like them, point to an inherent flaw present in all pay-for-performance models: though pay-for-performance models are often ineffective in achieving their stated goals, they are very effective motivators of undesirable and unethical behaviors. (8) Reviewing the unintended effects of pay-for-performance compensation models is particularly timely because the Medicare Access and CHIP Reauthorization Act of 2015 ("MACRA") switched Medicare providers to a pay-for-performance compensation model in 2017. (9) If this pay-for-performance compensation model in the health care sector leads to the same unintended and unethical behaviors that have occurred in the corporate and education industries, it would be wise to adopt counterincentives aimed at re-enforcing professional values and behaviors. This Note proposes counter-incentives that should provide an effective safeguard against what appears to be the most common negative behaviors associated with pay-for-performance models.

    Part II of this Note begins with an overview of MACRA. This section will explain MACRA's key features and identify those attributes that make it vulnerable to the same types of unintended behaviors that have plagued pay-for-performance models in other industries. Part III begins with an examination of the unintended consequences associated with pay-for-performance in non-health care industries. This section will also discuss the research on unintended consequences present in non-MACRA health care pay-for-performance models, and ultimately makes the argument that the small negative consequences observed in the health care sector are symptoms of a systemic disease in pay-for-performance generally. Part IV identifies physician disclosure standards as an area of law where counter-incentives could be particularly effective in safeguarding against these negative behaviors. This section provides a brief history of the evolution of physician disclosure standards in malpractice law, before suggesting that all courts and states adopt a reasonable patient standard designed to incentivize patient-centered care and patient autonomy--even in the face of countervailing financial incentives.

  2. UNDERSTANDING MACRA'S KEY FEATURES AND VULNERABILITIES

    1. Design Elements Common to All Health Care Pay-for-Performance Models

      In order to better understand MACRA's incentives and structures, it is helpful to first understand the design elements present in most health care pay-for-performance compensation models ("P4P"). Pay-for-performance compensation models in health care aim at "improving the quality, efficiency, and overall value of health care." (10) In theory, they accomplish these goals by providing health care providers with financial incentives for carrying out quality improvement activities and achieving more beneficial outcomes for patients. (11) Because P4P programs alter the way in which health care providers are paid, they are primarily payment programs as opposed to quality improvement-programs. (12) Though there have been many P4P experiments in health care, (13) all of them have the same three central design elements: 1) performance measurement, 2) incentives, and 3) transparency and consumer engagement. (14)

      Performance measures used in P4P programs in the health care world fall into three distinct categories: 1) structure, 2) process, and 3) outcome. (15) Structural measures focus on a health care provider's capacity, systems, and overarching processes. (16) Process measures indicate the steps that a provider takes to maintain or improve the health of patients. (17) And, outcome measures reflect the overall effect of the service rendered on the health status of patients. (18) In other words, structural measures describe what a particular health care practice looks like, process measures describe what the provider actually does during a patient consultation, and outcome measures describe what happens to the patient after an encounter with the provider. P4P programs usually use a combination of structural, process, and outcome performance measures. (19)

      The incentives associated with a P4P program can be either positive or negative. (20) Positive financial incentives can take a variety of forms, but always involve the award of additional funds as a result of provider compliance with performance measures. (21) Negative financial incentives, however, result in a loss of income due to the provider's failure to achieve the performance objectives. (22) While positive financial incentives appear more common generally, Medicare demonstrations that experimented with P4P often included negative financial incentives as well. (23)

      Lastly, P4P programs also, through transparency and consumer engagement activities, try to incentivize patients to choose high-quality providers. (24) Transparency and consumer engagement efforts focus on presenting cost and quality evidence to patients in an easy-to-understand manner so that patients will switch from low-quality providers to high-quality providers. (25)

    2. MACRA's P4P Design Elements

      MACRA institutionalizes P4P concepts on a nationwide scale by requiring Medicare-eligible providers who meet certain criteria (26) to participate in the Merit-Based Payment Incentive System ("MIPS"). (27) In doing so, MACRA utilizes all three of the major components of P4P programs--performance measurement, incentives, and consumer engagement and transparency. (28)

      Physicians participating in MIPS are graded on data that they report to the Center for Medicare and Medicaid Services. (29) Following this reporting, providers are assessed a final score that is used to determine whether the physician receives a positive or negative financial incentive. (30) Under the MIPS framework, providers are graded based on their performance relative to other providers. (31) In addition to relative grading, MIPS implements a zero-sum financial incentive system where the total dollar amount of positive financial rewards paid out to high-quality providers cannot exceed the total dollar amount subtracted from the income of low-quality providers. (32) It is also possible that a provider's compensation will not be altered by his MIPS score if that provider achieves an absolutely average score. (33)

      The MIPS framework implemented by MACRA also relies on consumer engagement and transparency efforts to incentivize provider performance and improve overall health care quality. (34) Providers are assigned quality ratings that correspond to their final scores, and these quality ratings are published to the general public. (35) MIPS, then, is a comprehensive P4P program that rewards and penalizes providers both financially and in the public eye based on adherence to pre-determined performance measures.

    3. Examining MACRA's Potential Vulnerabilities to Unintended Consequences

      Though performance measures are a necessary component of all P4P compensation models, quality measures or clinical guidelines used as performance measures are particularly vulnerable to unintended consequences. (36) An examination of some of MACRA's quality measures demonstrates their potential pitfalls. Though the quality measures are usually supported by clinical evidence, these guidelines are not infallible, and there are reasonable clinical alternatives that providers, without MACRA's incentives, may choose to use instead, were MACRA not providing them a reward to do otherwise. Pointing out alternative clinical options to those incentivized by the P4P program demonstrates one...

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