The Roadmap To Physician Payment Reform: What It Will Take For All Clinicians To Succeed Under MACRA

Mark McClellan, Frank McStay, and Robert Saunders – August 30, 2016

As the largest change in Medicare physician payment since the Sustainable Growth Rate formula, the Medicare Access and CHIP Reauthorization Act (MACRA) will affect up to 836,000 clinicians and allocate more than $1.2 billion in payment bonuses and penalties in its first year alone. Reflecting the importance of this policy, the 962 page proposed rule for its implementation generated thousands more pages of comments, with nearly 4,000 organizations and individuals submitting formal comment letters to the Centers for Medicare and Medicaid Services (CMS).

The proposed rule has been summarized by CMS, and there have been several Health Affairs Blogposts on MACRA. A major focus of the proposed rule is on the two main pathways for physician payments: the Merit-Based Incentive Payment System (MIPS), which adjusts fee-for-service (FFS) payments based on a composite measure of quality and value, and alternative payment models (APMs) that move away from FFS payment. How these features of the legislation are implemented will have a major impact not only on clinician payment but also on further developments in health care organizations, the way that they deliver care, and potentially the cost of care.

In this post, we highlight several big-picture policy questions raised by the proposed rule. More details on these topics are included in our comment letter to CMS.

What Alternative Payment Models Will Be Available To Clinicians?

One of the law’s key goals is to encourage movement from the traditional fee-for-service payment system to alternative payment models (APMs) focused more directly at the patient and population level. As an incentive for this shift, MACRA provides a 5 percent bonus to providers who participate in “advanced” APMs. The legislation sets a bar that envisions most clinicians would not qualify without significant payment change — it requires eligible providers to bear more than “nominal” financial risk for the costs of care they provide, to use quality measures similar to MIPS, and to use electronic records to coordinate and improve care.

There are few existing Medicare APMs that meet these criteria. If implemented as proposed in the rule, less than 10 percent of eligible clinicians would be participating in an advanced APMs. Several of the advanced APMs are accountable care organization (ACO) models with significant downside risk on total cost of care, which effectively limits availability to large consolidated provider organizations with substantial financial capital. Another is the Comprehensive Primary Care Plus (CPC+) pilot, which will be available to only some primary care providers and may not be permanent. The original CPC model also still needs to demonstrate overall program cost savings and quality improvement to be expanded nationally.

Some new options for certain specialists have become available since the MACRA rule was published. CMS proposed a larger set of mandatory episode bundles for hospital-based procedures and conditions, which expands the initial joint replacement bundled payment pilot to bypass surgery as well as heart attack and hip fracture care. CMS noted that physicians who provide enough of their care in collaboration with hospitals implementing these bundles can also qualify for advanced APM status.



Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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