The fatal flaw of Medicare’s fee-for-service reimbursement system

“In Medicare’s upside-down reimbursement system, hospitals and doctors who order unnecessary tests, provide poor care or even injure patients often receive higher payments than those who provide efficient, high-quality medicine.

‘It’s the exact opposite of what you would expect,’ said Mary Brainerd, chief executive officer of HealthPartners, a nonprofit health plan based in Bloomington, Minn. Her Medicare HMO ranked among the top 10 in the nation last year for quality but was paid thousands of dollars less per patient by Medicare than lower-performing plans.

‘The way Medicare is set up,’ Brainerd said, ‘it actually punishes you for being good.'”