Evolving Physician Reimbursement Structures: Moving the Medical Group to Value-Based Success

Abstract

With passage of the Medicare Access and CHIP Reauthorization Act, what changes can physicians expect with regard to payment incentive models?Repeal of the Medicare SGR formula and passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) are bringing about significant changes to the Medicare physician fee schedule and reimbursement methodology (Centers for Medicare & Medicaid Services [CMS], 2015). MACRA established annual positive or flat fee updates for 10 years and implemented a two-track fee update thereafter. In addition, MACRA created MIPS and consolidated the current Medicare fee-for-service incentive initiatives. The law also provides a mechanism for physicians to participate in alternative payment methods, including the patient-centered medical home model and others to be defined. In repealing the SGR and passing MACRA, Congress's intent was to move away from the fee-for-service payment methodology and toward a value-based payment system.In preparation for changes to current fee-for-service incentive models, physicians and physician groups should be aware that 2016 is the last reporting period under the current Physician Quality Reporting System (PQRS) methodology. The 2016 reporting period will affect 2018 reimbursement, meaning that providers who do not meet reporting and participation requirements in 2016 will experience a 2% reduction in Medicare reimbursement in 2018 (CMS, 2016b). Satisfactory participation currently includes reporting on nine measures in three quality domains, as defined by CMS. Changes for 2016 include adding measures where gaps exist and eliminating measures that have topped out, are duplicative, or have been replaced by more robust measures.Legislative changes to the Electronic Health Record (EHR) Incentive Program are leading to a stricter definition of certified EHRs. These changes will align with the Office of the National Coordinator for Health Information Technology and govern the requirements for information and how it can be submitted. In addition, the current Meaningful Use (MU) program will be restructured and consolidated into MIPS.CMS will continue a phased approach to public reporting on the Physician Compare website. In addition to providing access to all individual- and group-level reported measures, Physician Compare will post scores for providers who report satisfactory performance on the new PQRS Cardiovascular Prevention measures and received a positive adjustment for the Value-Based Payment Modifier (VBPM) program. By including the downloadable VBPM database, Physician Compare will provide consumers with information regarding performance (i.e., high, low, or neutral on cost and quality) and indicate if a provider or group did not report data on these measures.Implementation of MACRA will drive the consolidation of the current incentive plans. Beginning in 2017, MACRA will include elements of each of the three programs (PQRS, MU, and VBPM) as well as a fourth-clinical practice improvement activities (CPIA)-currently under development. These programs will be rolled together and result in a composite score for practitioners and practices. Each provider or practice will receive a positive, neutral, or negative adjustment in reimbursement on the basis of the score in relation to a threshold. The incentive or penalty will be based on reporting and performance 2 years earlier, meaning the 2019 incentive or penalty will be based on reporting and performance in 2017. Providers or groups above the threshold will receive positive adjustments, whereas those below the threshold will receive negative adjustments. The payment adjustments will gradually increase from 4% in 2019 to 9% in 2022. CMS projects that this system will be budget neutral, meaning poor performers will pay for above-average performers. In the event that everyone is above the threshold, CMS has built in an additional $500 million in funding for the top performers between 2019 and 2024. …