With Merit-Based Raises on Horizon, Doctors Should Prepare for Change

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By Mindy Yochelson

April 21 — Although the performance-based reimbursements for physicians under the new Medicare law's payment incentive system are a few years away, providers and their professional associations need to prepare now for changes ahead, industry sources told Bloomberg BNA.

The new incentive program will impact not only doctors of medicine and osteopathy, but dentists, podiatrists, optometrists, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists.

“The clock is already ticking,” Robert Doherty, senior vice president of governmental affairs and public policy for the American College of Physicians, said April 17.

Staff at the Medical Group Management Association are working to understand the new law and will be talking to members about it over the next couple of weeks, Anders M. Gilberg, the group's senior vice president for government affairs, said. Then, he said, there will be a “shift to advocacy” to shape the program under the regulatory process.

Focus on MIPS

Much of that focus will be on the Merit-Based Incentive Payment System (MIPS), the centerpiece of the new doctor payment structure that replaced the sustainable growth rate (SGR) formula in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. No. 114-10), signed by President Barack Obama April 16.

Under MIPS, payments to professionals will be adjusted based on performance measures to be developed over the next few years. MIPS will replace the current group of incentive payment programs: the Physician Quality Reporting System (PQRS), Value-Based Payment Modifier (VPM), and Electronic Health Records (EHR) Meaningful Use (MU) Incentive Program.

With repeal of the SGR, MACRA set annual pay increases during a transition period leading up to the start of MIPS. The updates of 0.5 percent begin July 1 and stop in 2019.

Although the 0.5 percent hikes don't keep up with medical inflation, doctors at least will know they'll be no worse off, Doherty said, unlike the uncertainty each year under the SGR formula.

Harmonized System

American Medical Association Chief Executive Officer and Executive Vice President James L. Madara called MIPS a “significant improvement” over the current group of “disconnected” Medicare value measurement programs to which doctors are subject.

Lack of consistency and clinical relevance among the three incentive programs created a waste of time and effort that “dwarfed” perennial concerns about a large payment cut under the SGR, Gilberg said.

However, until 2019 when MIPS begins, providers will be operating in “two parallel universes,” Doherty said. To avoid current penalties, they will have to continue involvement in the three existing value measurement programs—PQRS, VBM, and the EHR MU—until they sunset at the end of 2018.

Practice Improvements

They also will have to prepare for performance measurement under MIPS, doctors will want to invest in practice improvements, such as patient registries, Doherty said.

A patient registry is a collection of information about a group of patients who share a condition or experience and can be used evaluate specified outcomes for a population defined by a particular disease, condition, or exposure.

Improvements and additionals such as these can help providers earn higher payment increases and avoid cuts up to 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022.

The creation of MIPS “heightens the burden on providers to track, report, and improve quality performance,” according to Lisa Bielamowicz, chief medical officer of the Advisory Board Company, a consulting company. “Providers need to ensure they are on-track to building dynamic capabilities for monitoring and analyzing quality performance,” she said in an analysis of the law.

Raises, Cuts Depend on Score

The 4 percent to 9 percent payment adjustments depend on results of a provider's composite score on a 0-100 range, based on their performance in each of four categories: quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology.

Providers who score above a threshold will be eligible for an increase, those below for a cut, and those whose composite performance score is at the threshold won't receive a MIPS payment adjustment.

Timothy P. Blanchard, health-care regulatory attorney with Blanchard Manning LLP in Orcas, Wash., told Bloomberg BNA that practices will need to have a solid electronic medical records system so they can “get a better handle on their data” and back up their codes.

Measurement Development

MACRA provides $15 million to the CMS's Program Management Account for measure development in each fiscal year between 2015 and 2019.

The measures are to fall under five “quality domains”—clinical care, safety, care coordination, patient and caregiver experience, and population health and prevention. To the extent practicable, quality measures selected for inclusion on the final list are to address all five domains.

One of the first regulatory steps is to occur by Jan. 1, 2016, when the CMS has to post a “draft measure development plan” for MIPS.

The development plan, which must be finalized by May 1, 2016, has to take into account how measures from the private sector and integrated delivery systems could be utilized in the Medicare program.

Doherty said it’s important that Medicare measures be consistent with those of private insurers, not only to reduce provider burden but to ensure that all of a provider's patients receive the same care regardless of their insurer.

Annual Measurements

Through notice and comment rulemaking, the CMS each November will establish a list of quality measures to be used in the following year.

MIPS “creates a blank canvas” onto which details of the new law will be drawn, Gilberg said. It allows eligible medical professionals to “pick measures rather than having them be mandated by the government,” he said.

With the “devil in the details,” and the “huge job” ahead for the CMS, providers need to be aware of what will be going on in the policy development process, Blanchard recommended.

For example, the performance category of “resource use” should explain how professionals who serve a sicker or poorer beneficiary population will not be scored worse under MIPS than other providers, Doherty said.

Blanchard agreed that this needs to be taken into consideration since doctors have “no way to control” whether a patient takes medicine, follows up on an appointment or has an unhealthy lifestyle.

Alternative Payment Methods

Once MIPS begins in 2019, MACRA offers a way for some providers to avoid scoring and potential 4 percent to 9 percent cuts through participation in alternative payment methods (APMs).

Medical professionals who receive a significant share of their revenues through an eligible APM that involves risk of financial losses and a quality measurement component—most typically a medical home or an accountable care organization—will receive a 5 percent bonus each year from 2019-2024 and be exempt from MIPS.

The incentives associated with the APMs are intended to move providers away from fee-for-service Medicare.

That's a “significant incentive” on top of the shared savings that providers can gain from participating in an ACO, Gilberg said.

In addition, starting in 2026, professionals participating in APMs are to receive annual updates of 0.75 percent, while those who don’t will receive annual updates of 0.25 percent.

Bielamowicz said the new incentives might be a turning point for provider participation in alternative payment models.

The CMS announced in December 2014 that there are 424 ACOs serving just 7.8 million beneficiaries.

Types of APMs

After posting a request for information, the CMS by Nov. 1, 2016, must establish criteria for APMs, including models that can be used by specialists.

APMs can also include models under the CMS's Center for Medicare and Medicaid Innovation (CMMI), Healthcare Quality Demonstration Program, or other federally-run demonstrations.

Bundled payment models can be considered an APM and could be appropriate for certain practices, Doherty said.

The CMMI is testing new delivery and payment systems, including a three-year initiative on how bundling Medicare payments for episodes of care can result in more coordinated care for beneficiaries and lower costs.

Doherty also mentioned the availability of help through the Department of Health and Human Services' Health Care Payment Learning and Action Network in which the agency will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs.

Impact on Smaller Practices

Reaction appeared to be mixed about the impact of the new payment structure on small practices.

“The MIPS program, in combination with the incentives for providers to participate in APMs, has the potential to profoundly increase the administrative burden for practicing physicians, Eric Zimmerman, a principal with McDermott+Consulting, said in an analysis.

“It is conceivable that many solo practitioners may not have the ability or perhaps even the desire to make the necessary changes to their practice that will be needed in order to continue seeing Medicare patients,” he said.

While that could be case, how MIPS will turn out is unknown at this point, Blanchard said. To prepare, doctors should consider which providers they want to deal with outside their own practice groups, he said.

Gilberg said there has been “success stories” of small practices becoming medical homes.

But the new law isn’t necessarily the “nail in the coffin” for smaller practices, depending on how the program turns out, Doherty said.

From 2016 to 2020, $20 million has been set aside annually to fund technical assistance to help practices with 15 or fewer professionals improve MIPS performance or transition to APMs. Priority will be given to practices with low MIPS scores and those in rural and underserved areas.

To contact the reporter on this story: Mindy Yochelson in Washington at myochelson@bna.com

To contact the editor responsible for this story: Ward Pimley at wpimley@bna.com


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