Door Opening for Medicare Managed Care Doctors to Earn Bonuses

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By Mindy Yochelson

Doctors serving Medicare managed care patients could see bonus payments coming their way several years ahead of schedule, if the Medicare agency follows through on a recent proposed rule.

The push is on to allow doctors to use their Medicare managed care services to qualify for a 5 percent bonus and be relieved of quality reporting requirements under Medicare’s physician payment program. But a demonstration program could move this process ahead of program requirements.

A proposed rule issued this summer (82 Fed. Reg. 30,010, 6/30/17) by the Centers for Medicare & Medicaid Services said the agency is considering using doctors’ contractual arrangements with Medicare Advantage (managed care) plans to count toward their qualifications to be part of an advanced alternative payment model. This could make things easier for doctors to get the bonus, because about one-third of Medicare patients are in MA plans. However, there may be some pushback from plans about opening their physician contract informationto the public as part of this process.

Doctors who qualify to participate in such a model have perquisites unavailable to their peers. They don’t have the burden of submitting measures under the CMS’s quality reporting program, known as the Merit-Based Incentive Payment System (MIPs). If the model meets CMS’s criteria, participants get a 5 percent incentive payment on their fee-for-service Medicare (Part B) doctor service claims.

The goal of a model is to pay clinicians for the value, not volume, of their services. In exchange, doctors who participate in the model are required to use electronic health records, base payment on quality measures, and bear “more than a nominal financial risk for monetary losses.”

A final rule is expected this fall from the Medicare agency.

The agency in the proposed rule estimated that between 180,000 and 245,000 doctors and other clinicians will get between $590 million to $800 million in incentive payments based on their performance in 2018.

Demonstration Model Participation

To qualify for participation in advanced alternative payment models, doctors this year and next must demonstrate that 25 percent of their traditional Medicare Part B payments or 20 percent of their patients are through an advanced alternative payment model. The thresholds increase dramatically each year. However, the payments and patients have to come from care delivered only through fee-for-service Medicare, not from Medicare Advantage. Revenue received through MA risk contracts doesn’t count toward a practice’s payment and patient thresholds.

That can be a problem for practices, according to a representative of an organization of health plans and provider groups.

Some practices are heavily involved with Medicare Advantage “and their Part B revenue is an increasingly smaller part,” Howard Shapiro, director of public policy for the Washington-based Alliance of Community Health Plans, told Bloomberg BNA Aug. 8.

Overall, MA has grown to cover one-third of beneficiaries. Insurers that have the highest MA enrollment are United Healthcare, Humana, Anthem, Aetna, and Cigna, according to Bloomberg Intelligence.

Law Began This Year

The alternative payment model system and MIPS, the quality reporting program, were created under the Medicare Access and CHIP Reauthorization Act (MACRA), the 2015 physician payment law that took effect Jan. 1.

MACRA will allow claims from other payers—MA, Medicaid, and commercial insurers—to count toward the APM thresholds, but not until the 2021 payment year.

Medicare Advantage supporters have been urging the CMS not to wait until then to count doctors’ arrangements with MA risk contracts as part of the payment and patient thresholds. They want the same incentives to be offered across all of Medicare health care options. They’ve argued that many MA plans have similar quality and risk requirements for their doctor organizations as advanced alternative payment models under MACRA.

A group of two dozen bipartisan House members agreed with them. In a July 10 letter, the group, led by Reps. Tom Reed (R-N.Y.), Tony Cardenas (D-Calif.), Larry Bucshon (R-Ind.), and Earl Blumenauer (D-Ore.), urged Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma to count certain Medicare Advantage contracts for purposes of qualifying as an advanced model.

Medicare Door Opening

The CMS’s 2018 proposed quality payment rule opened the door to a possible earlier inclusion of MA claims in the advanced payment models than contemplated in MACRA.

The agency said it is considering “creating a way for those participating or who could participate in Advanced APMs that include Medicare Advantage to receive credit for that participation” toward the patient and payment thresholds. The CMS said it wants to hear from the public on whether it should use its waiver and demonstration authorities to be include MA revenue.

Comments on the proposed rule are due Aug. 21.

Medical group CAPG was “thrilled to see that the agency is considering how to use its authority to count Medicare Advantage risk contracts in the Medicare component of that threshold,” Mara McDermott, vice president of federal affairs for CAPG, said during an Aug. 7 webinar. CAPG represents medical groups and independent practice associations that operate under managed care and has been the main proponent for MA inclusion.

The group in Aug. 8 comments asked the CMS to design a voluntary demonstration project through its innovation center that would allow physician groups with MA contracts to qualify for model participation. Doctors would then receive the 5 percent bonus and be exempt from MIPS.

All-Payer Combination Option

Whether the CMS will create a demonstration isn’t known.

MACRA’s “All-Payer Combination Option” will eventually let doctors’ reimbursements from MA, Medicaid, and commercial insurers count toward their eligibility. This is expected to allow clinicians with lower levels of Medicare payments to join an advanced APM. Doctors’ payments in 2021 are based on their performance in 2019.

The proposed Medicare doctor rule for 2018 lays out timetables for Medicare health plans, Medicaid, and other payers to submit information to the CMS to apply for alternative payment model inclusion.

Medicare plans and their doctors may submit data documenting their qualifications between April and June 2018. They have to prove they accept risk beyond a nominal amount.

Contract Revelations

Some question, however, whether MA plans will be eager to reveal their contractual arrangements with providers, information regarded as proprietary.

“You can imagine how willing MA plans are to make known their contractual terms to the public,” David Introcaso, senior director for regulatory and public policy for AMGA, said. AMGA is a trade association for multispecialty medical groups and other organized systems of care.

Another “hiccup” is that the bonus money goes to the physician, Introcaso said. There’s nothing in it for the plans, he said.

The quality payment program will have difficulty gaining traction unless “MA plans want to fully engage and make transparent these risk relationships” with doctor practices, Introcaso said.

Limited Disclosures

One downside of opening up this information is that rival plans could lure desirable network practices with a better deal, Shapiro said.

McDermott of CAPG said her organization would like the final CMS rule to limit the documents the agency collects. Full contracts shouldn’t be necessary for the agency to make a determination on eligibility, McDermott said. There’s a “great deal of sensitivity,” about disclosing proprietary arrangements, she said. “More limited disclosure would encourage more participation,” she said.

John Feore, a director at Avalere, a Washington-based consulting company, told Bloomberg BNA Aug. 8 that it remains to be seen whether plans “feel comfortable that any final requirements will insulate them” from having their competitive information available to the public.

Keeping Doctors Happy

Nonetheless, some plans may want their network clinicians to earn a bonus and they may motivate these plans to get involved, Feore said.

Similarly, Shapiro said MA plans should want to ensure that physicians have as much incentive to participate in MA as they do in traditional Medicare,

The process is still in the proposal stage so there’s time for the CMS to accept payer input, Feore said.

To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Kendra Casey Plank at

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