OMB Reviewing Proposed Medicare Doctor Pay Rule

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Mindy Yochelson

March 28 — The White House Office of Management and Budget is reviewing a highly anticipated proposed regulation that will change the way doctors are reimbursed for services to Medicare beneficiaries.

The proposed rule (RIN 0938-AS69), which will establish the details for the new value-based payment system, was received by the OMB March 25. Centers for Medicare & Medicaid Services officials have said that the proposal would be released in the spring.

Begins in Three Years

Starting Jan. 1, 2019, the new system would implement a two-track payment method.

One track, the Merit-Based Incentive Payment System (MIPS), would score medical professionals based on performance.

MIPS will consolidate the current performance-based payment programs known as the Physician Quality Reporting System, the Value-Based Modifier and the Electronic Health Records Incentive Program into one.

Under MIPS, doctors and other Part B clinicians would receive a performance score that would lead to cuts or increases to Medicare reimbursements of up to 4 percent in 2019, 5 percent in 2020, 7 percent in 2021 and 9 percent in 2022.

APM Criteria

For the second track, the rule would establish criteria for alternative payment models (APMs) that would allow providers to avoid the scoring and receive a 5 percent bonus if they join an eligible entity. APMs are provider payment structures that are expected to take the form of accountable care organizations, bundled payments and advanced primary care medical homes. Qualifying APM participants must have a specified amount of their Medicare expenditures or patients through an eligible APM.

The two new tracks were called for in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which replaced the sustainable growth rate, a formula that led to yearly cuts in Part B provider payments that were subsequently overridden by Congress.

A final rule is expected to be out by Nov. 1.

Details on New Process

Medical professionals and lawmakers have been anxious to hear the details of how the new system will be implemented, particularly criteria for APMs.

CMS Chief Medical Officer Patrick Conway told a House subcommittee in March that many APMs might not meet eligibility requirements and be able to offer participants annual bonuses and exemptions from performance scoring .

Mara McDermott, vice president of federal affairs at CAPG, told Bloomberg BNA March 28 that once the proposed rule emerges from OMB review, the focus will be on which APMs will qualify for the 5 percent bonus. “CMS has indicated that a narrow set of models will qualify as bonus-eligible APMs,” she said, and “I think everyone wants to know what those will be.”

As for MIPS, she said CAPG, which represents physician groups that use risk-based coordinated care, is “watching for how many and what types of measures will be encompassed in the four components of MIPS.” The four parts are quality, resource use, clinical practice improvement activities and meaningful use of certified technology.

“If MIPS is very onerous, does the APM path become more attractive, and vice versa?” she asked.

Need for Education

Wanda Filer, president of the American Academy of Family Physicians, told Bloomberg BNA March 28 that, as she travels around the country, she has found that there will be a need for education on the new system. For many family physicians, the acronyms MACRA, MIPS and APMs are “Greek,” she said.

Similarly, an official with the American College of Physicians told Bloomberg BNA, “I think most of our members have no idea what is coming or what will impact them.”

Preference for APMs

Filer, however, said she believes that most family physicians will choose the APM track where there is an “upside to funding without the downside risk.”

A little less than half of AAFP members have already made the transformation to a patient-centered medical home, which uses team-based care, and want the opportunity to get back some of the funds they've invested in the transformation, including electronic health records, she said.

Once the proposed rule is posted, Filer said she'll be most interested in making sure that providers receive prompt and useful feedback from the CMS on their claims data. She said she also wants to know about reporting requirements for both MIPS and APMs, which can be a “nightmare” for practitioners, and how requirements will differ based on practice size.

Preference for MIPS

On the other side of the two tracks, Katie O. Orrico, director of the Washington office of the American Association of Neurological Surgeons/Congress of Neurological Surgeons, told Bloomberg BNA that, at least initially, MIPS will likely be most relevant to her members.

Neurosurgeons have not yet developed any specialty-specific APMs, she said, although work is under way to investigate a variety of APM options.

“Within the MIPS programs, we certainly are concerned how CMS will construct the payment scoring methodology, detailed requirements for meeting the four MIPS categories, and issues related to attribution and compliance,” she said.

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

To contact the editor responsible for this story: Janey Cohen at

Request Health Care on Bloomberg Law