MedPAC Discusses Obstacles to New Doctor Payment System

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By Mindy Yochelson

Oct. 13 — Obstacles confronting the Centers for Medicare & Medicaid Services as it begins design of a new physician payment system could include excessive complexity and lack of participation, members of a Medicare advisory panel were told Oct. 8.

Medicare Payment Advisory Commission staff members said one part of the new system that will replace the sustainable growth rate (SGR) formula—the upcoming Merit-Based Incentive Payment System (MIPS)—could turn out to be overly complex and burdensome.

The other part—alternative payment models (APMs)—may have limited participation because of strict eligibility criteria on such issues as electronic health records. They also will need to have adequate beneficiaries involved to reliably measure spending and performance.

The CMS Oct. 1 queried the public about details of the upcoming system in a request for information.

Details Unknown

However, details of the payment system remain unknown because the CMS isn't expected to publish rulemaking until 2016.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed by President Barack Obama in April, established a two-part reimbursement methodology to replace the SGR.

Starting in 2019, the law ties annual Medicare reimbursements for doctors and other Part B professionals to value through MIPS. Payments will be cut or added on—from 4 percent in 2020 to 9 percent in 2022—based on performance measures under four components: quality, resource use, meaningful use of electronic health records and clinical practice improvement activities.

However, professionals who receive a significant share of their revenue through an alternative payment model (APM), such as an accountable care organization (ACO) that meets various criteria, will receive a 5 percent bonus each year from 2019 to 2024 and be exempt from being judged under MIPS.

Double Participation

In their first discussion of the new program, commissioners questioned whether the bifurcated system would allow for participation in both MIPS and APMs.

Medical providers “will be in one or the other,” MedPAC senior analyst Catherine Bloniarz told the commissioners. “What I don't know is whether there'll be a lot of switching back and forth year by year.”

Bloniarz said that, under MIPS, it will be difficult to measure clinicians' performance at the individual level.

“Many quality and resource use measures are not reliable at the individual level,” she said. “Based on CMS’s experience today about individual payment adjustments, most clinicians will likely look average.”

Even before Congress passed MACRA, MedPAC had doubted the CMS's ability to measure individual clinicians' performance.

In comments to the CMS over a year ago, MedPAC urged the agency not to focus on the performance of individual physicians in the agency's quality measurement programs because it “may not be worth the resources required”.

Bloniarz said MIPS “will only be able to reliably identify persistent outliers.”

Another problem with MIPS is that it combines the agency's current value measurement programs—meaningful use for EHR, physician quality reporting system and value-based modifier—under one umbrella and adds other criteria.

“The resulting system is likely to be overly complex and further burden both providers and CMS,” Bloniarz said.

APM Participation

Discussing the other side of the new system—alternative payments models or APMs—MedPAC principal policy analyst David V. Glass said that, because of the 5 percent bonus and higher updates that start in 2026, “there will be strong interest among clinicians to be considered qualified APM participants.”

However, staff members also predicted that strict criteria could limit participation. Eligible APMs must meet standards on the use of certified EHR technology, bear financial risk and have quality measures comparable to MIPS.

“Very few models are likely to meet the criteria,” Bloniarz said.

Further, Commissioner Alice Coombs, a critical care specialist and an anesthesiologist at Milton Hospital and South Shore Hospital in Weymouth, Mass., said the Pioneer ACO program experienced dropouts.

Unanswered Questions

There appeared to be number of questions that the CMS will have to address soon—with the start of the bonuses in 2019.

The agency will be using 2018 as the base year on which to measure APM bonuses, which will be delivered yearly in a lump sum based on the prior year's revenue, staff members said.

The CMS will have to determine eligibility criteria, what spending the APM is responsible for, how many APMs clinicians may be in and how to attribute beneficiaries who are in more than one APM, they said.

APMs will need sufficient numbers of attributed beneficiaries in order to reliably measure spending and performance, Glass said.

APM Standards

Commissioner Katherine Baicker, chair of the Department of Health Policy and Management at the Harvard School of Public Health, said MACRA's goal was to create a system that moves more care into models that are rewarding higher quality and better value “and away from fee-for-service without any incentives to modulate quantity and maintain quality.”

Glass, however, said the legislation did not require APMs to lower costs and increase quality and that a key question is whether they should be obligated to do so.

APMs should “hold promise of better care at lower cost to get the bonus,” Commissioner Craig Samitt, executive vice president and chief clinical officer for Anthem Inc., said. “Just to give them a reward to get them out of their fee-for-service comfort zone is not enough.”

Doctor Impact

Doctors and other Part B providers “moving forward will realize they're going to have to change some of their organizational structure and other relationships,” Commission Chairman Francis J. Crosson, a physician and former executive at Kaiser Permanente, said.

Commissioner Willis D. Gradison Jr. expressed concern about the impact of the new requirements on doctors.

Gradison, a former member of Congress and scholar in residence in the Health Sector Management Program at Duke’s Fuqua School of Business, said it could accelerate the retirement of older physicians.

Commissioner Kathy Buto, a former senior health adviser at the Congressional Budget Office and former official at the CMS, said she was disappointed over a lack of attention to the payment disparity between primary care and specialty care.

“In fact, it might make it worse because it takes the attention off of that issue ... and really focuses more on the update factor,” she said.

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

To contact the editor responsible for this story: Brent Bierman at


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