The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is due for final rule this fall, yet a recent survey of 600 physicians through the Deloitte Center for Health Solutions suggests that half of non-pediatric physicians have never even heard of MACRA. The news is disconcerting considering the big impact the ruling is slated to have on physician reimbursement beginning in January of 2017.
Under pending MACRA legislation, future physician payment models will stem from two new programs:
- MIPS (Merit-Based Incentive Payment System)
Payment bonuses or penalties issued based on physician performance relative to all other physicians on set quality and value measures.
- Advanced APM (Alternative Payment Model)
Payment bonuses issued initially with higher annual base updates than MIPS when physicians earn significant revenue or see sufficient patient percentages through qualifying Medicare or payer models, requiring the acceptance of some financial risk if spending surpasses targets.
For the purposes of physician compare, MIPS melds three former payment programs (physician quality reporting, the meaningful use incentive program, and the value-based payment modifier) into new annual Composite Performance Scores (CPS) based on:
- Quality of care provided – 30% (in 2021 and beyond)
- Resource use – 30% (in 2021 and beyond)
- Meaningful use of EHRs –25%
- Clinical practice improvement activities (decided on by the Secretary) – 15%
Beginning in January of 2019, 4% of a medical professional’s revenue generated through Medicare fee-for-service payments will be redistributed under MIPS, growing to nine percent by 2022 and remaining there going forward (barring revised legislation). The law provisions for $500 million each year from 2019 to 2024 to award “exceptional performance” bonuses to MIPS providers with the highest CPS.
Advanced APM extends physicians a fixed 5% bonus for each of the first six years of MACRA plus higher base payment rate updates than MIPS from 2026 onward. Bonuses or penalties are based on quality and cost performance under their respective Advanced APM contracts, with no requirement to be budget neutral (unlike MIPS).
APMs currently established as meeting the “Advanced” designation include:
- Medicare Shared Savings Program ACOs, Tracks 2 and 3
- Medicare Next Generation ACOs
- Comprehensive Primary Care Plus (CPC+) Model
- Oncology Care Model (two-sided risk)
- Comprehensive End-Stage Renal Disease Care Model (Large Dialysis Organization arrangement)
Whether physicians rely on revenue or patient volume indicators and whether the model factors in just Medicare or all payers represent payment model differentiators. Partially qualifying APM providers can opt out of MIPS reporting altogether, guaranteeing they receive neither a penalty nor bonus that year. APMs not designated Advanced may still qualify as MIPS.
CMS projects that only 4% to 11 % of Medicare providers will qualify for the Advanced APM approach in its first year due to relatively strict standards.
MACRA predictions also show the majority of physicians in small groups (<10) likely suffering penalties with larger groups and practices expected to see higher reimbursement returns. Many suggest the financial risk smaller physician practices may see under MACRA will lead them to seek employment by hospitals and large physician networks. Higher degrees of consolidation in the physician market are anticipated.
About 58% of physicians in Deloitte’s survey said they would join a larger organization to diminish their financial risks. 80% of respondents expected MACRA to prompt physicians to join larger organizations or networks.
New clinically integrated networks are cropping up to offer smaller-scale physicians and practices options beyond hospital or physician-consolidator employment. Carolinas HealthCare System recently worked with local physicians to determine areas of focus for an alliance, finally partnering with a group of nine physician practices to form a network that will include 2,300 physicians across 12 counties.
Central Georgia Health Network (CGHN) and Stratus Healthcare have partnered to offer data exchange to doctors in and around the Macon, GA area. CGHN’s 650 physicians, along with their Navicent Health facility partners, serve communities across more than 15 counties in Georgia.
Incentives for clinicians to enter more risk-bearing care models could generate opportunities for health systems and payers to partner with physicians under Medicare in new ways. With MACRA launch dates looming and physician star-ratings data poised for inevitable release, physician markets will undoubtedly see ample movement in the coming months.
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