As part of a larger effort to shift payment towards quality over quantity, the Obama administration rolled out a regulation to shift Medicare payments to reward quality health outcomes and implement the “doc fix” legislation passed by Congress last year.

The Department of Health and Human Services (HHS) created a web page, fact sheet and a whiteboard video to explain the program.

On April 27, 2016, HHS issued a Notice of Proposed Rulemaking to implement key provisions of the Medicare Access and Summary CHIP Reauthorization Act of 2015 (MACRA), bipartisan legislation that replaced the flawed Sustainable Growth Rate formula with a new approach to paying clinicians for the value and quality of care they provide.

The proposed rule would implement these changes through the unified framework called the Quality Payment Program, which includes two paths that go into effect in 2019, both of which seek to pay clinicians in part based on how well they treat patients.

The first path, called the Merit-Based Incentive Payment System (MIPS), would increase or decrease payments up to 4% in the first year based on how well doctors meet benchmarks that include cost; quality; how doctors use electronic health record technology in their daily practice and share that information with other providers; and activities that improve care, such as care-coordination or how much beneficiaries are engaged in their care.  

The second path, known as Advanced Alternative Payment Models (APM), would go even further in shifting toward rewarding quality, using paths that have already been put in motion by the Affordable Care Act, such as accountable care organizations, where groups of doctors come together to share in Medicare’s savings if they reduce costs and meet quality goals.

“By proposing a flexible rather than a one-size-fits-all program, we are attempting to reflect how doctors and other clinicians deliver care and give them the opportunity to participate in a way that is best for them, their practice and their patients,” said a spokesperson for Centers for Medicare and Medicaid Services, (CMS).  

As Kaiser Health News reports, currently doctors are paid for things like tests, treatments and other procedures, but not necessarily for spending time with patients to learn more about their health or develop a treatment plan. Officials say the new payment program will change that.

According to Modern Healthcare.com, CMS officials expect that most Medicare clinicians will initially participate in the MIPS program but over time will move more toward the alternative payment models. The APM path is potentially an attractive alternative to MIPS because it provides physicians with greater flexibility to make investments that otherwise wouldn't be covered, like hiring care coordinators.

Most doctors who treat patients in the traditional Medicare program, as well as other clinicians such as physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists who also provide care to Medicare beneficiaries, will be paid under either the MIPS or advanced APMs system. Clinicians can be exempted from MIPS if they are new to Medicare, have less than $10,000 in Medicare charges, or see 100 or fewer Medicare patients, or are “significantly participating” in an advanced APM.

The new rule adopts a program called Advancing Care Information, accounting for 25% of physicians' performance score, which will allow them to select the measures they report. The program emphasizes interoperability, information exchange and security measures.

Under the law setting up the changes in payment, physicians will receive a fee increase of 0.5% per year between 2016 and 2019 as the new system is developed and put into place.

In 2017, Medicare will begin measuring performance for doctors and other clinicians for the MIPS program, with payments based on those measures beginning in 2019. Under that system, payments generally won’t increase or drop by morethan 4%, risinggradually to 9% from 2022 and beyond. Doctors can earn additional bonuses for exceptional performance.

Practitioners who pursue APMs would qualify for a 5% Medicare Part B incentive payment for the years 2019 through 2024.

The law does not change payments by beneficiaries.

The CMS will solicit comments on the rule over the next 60 days. Officials said they will be listening to a wide variety of additional input before finalizing the rules. About 30% of physician payments are currently flowing through alternative payment models.

Doctors and other interest groups can now comment on the proposal until June 26, and CMS is expected to issue a final rule this fall.

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