Landmark Rule Transforms Medicare Physician Reimbursement: What to Know

October 14, 2016Articles

Today, the Department of Health & Human Services (HHS) issued its Final Rule implementing a landmark new payment system for Medicare clinicians. The Quality Payment Program (QPP), which is part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), reforms how clinicians are paid for Medicare Services by changing the way Medicare incorporates quality measurement into payments. Clinicians will now be rewarded for delivering high-quality patient care, as opposed to high-quantity patient care. “It’s time to modernize the Medicare physician payment system to be more streamlined and effective at supporting high-quality patient care,” said Andy Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS).

The QPP offers two tracks for clinicians to participate in. Track 1, called the Advanced Alternative Payment Models (APMs), gives clinicians the opportunity to be paid more for participating in innovative payment models like Accountable Care Organizations. When clinicians get better health results and reduce costs for the care of their patients, the clinicians receive a portion of the savings. Clinicians who participate in the Advanced APMs track could earn a 5 percent Medicare incentive payment in 2019. CMS estimates that up to 120,000 clinicians will be eligible for Advanced APMs in the first year.

Track 2, called The Merit-based Incentive Payment System (MIPS), gives clinicians the opportunity to earn a performance-based payment adjustment for better care and investments that support patients. Clinicians who decide to participate in traditional Medicare, rather than Advanced APM, will participate in MIPS. Clinicians who participate in MIPs will see a positive, neutral, or negative payment adjustment of up to 4 percent that will fluctuate depending on how much performance data the clinician submits and the quality results. This adjustment percentage could grow to a potential of 9 percent in 2022. CMS estimates approximately 500,000 clinicians will be eligible for participation in MIPS in the first year.

Clinicians can choose to start collecting performance data anytime between January 1, 2017 and October 2, 2017. Clinicians are then required to send the performance data to Medicare by March 31, 2018. After the performance data is received, Medicare will provide the clinician feedback on their submission. Subsequently, Medicare will begin issuing adjustments on January 1, 2019. Note that if 2017 is the clinician’s first year participating in Medicare, they are not required to participate in the QPP.

According to HHS, the QPP Final Rule is “informed by a months-long listening tour with nearly 100,000 attendees and nearly 4,000 comments.”With many of the comments relating to small group practices, the QPP provides options designed to make it easier for small group practices to report on performance and qualify for incentives; including a reduced reporting burden, increased usability of technology, and stepped-up technical assistance. In addition, MACRA provides $20 million each year for five years to fund training and education for Medicare clinicians in individual or small group practices and those working in underserved areas.

In light of the considerable implications of the QPP, clinicians should take the time to review the options and determine which track best fits their particular practice. Clinicians should consider their practice size, specialty, location, and patient population, among other things. The Final Rule, which provides over 2,400 pages of guidance, should be reviewed in detail to fully understand the various options and obligations. HHS also suggests that clinicians seeking assistance with the QPP should access HHS’s interactive Quality Payment Program website.

If you have any questions regarding the QPP, how this will affect you or your practice, or need guidance on what track best suits your practice, contact Jennifer Mitchell at Dinsmore & Shohl, LLP.

For those wishing to provide comments to the Final Rule, there is a 60 comment period to solicit input on how to improve the QPP goals.

HHS’s Press Release regarding the QPP Final Rule can be found here.