Physicians participating in many existing alternative payment models (APMs)—including most Medicare accountable care organizations (ACOs)—will not qualify to receive future Medicare pay increases under proposed rules issued by CMS last week.
The proposed rules would implement changes through the unified framework called the Quality Payment Program, which includes two paths:
- The Merit-based Incentive Payment System (MIPS)
- Advanced Alternative Payment Models
(Administration takes first step to implement legislation modernizing how Medicare pays physicians for quality, DHHS, April 27, 2016)
The proposed rules detailed how physicians will be paid under Medicare starting in 2019; it identified the APMs that will qualify participating physicians for bonus payments:
- Comprehensive Primary Care Plus (CPC+) [see iProtean blog/newsletter April 20, 2016]
- Next Generation ACO
- Medicare Shared Savings Program (MSSP) Tracks 2 and 3
- Oncology Care Model with two-sided risk
- Comprehensive ESRD Care (for large dialysis organizations)
No bundled payment programs and Track 1 MSSP ACOs were included in the initial list, although CMS noted it will continue to add to the list of qualifying APMs.
Ninety-five percent of the 434 MSSP ACOs are in Track 1, and participating physicians would not qualify under the proposed rules, according to a CMS official. Additionally, physicians participating with about 800 hospitals in the newly launched Comprehensive Care for Joint Replacement (CJR) model also would not qualify for APM payments. (“Many Existing APMs Excluded Under Proposed Physician Pay Rules,” HFMA Weekly, April 29, 2016)
A Healthcare Financial Management Association (HFMA) official noted that a leading concern for physician practices “appears to be the relatively small number of APMs it designated as qualifying participating physicians for bonus payments.” (“Many Existing APMs Excluded Under Proposed Physician Pay Rules,” HFMA Weekly, April 29, 2016)
The Department of Health and Human Services’ news release noted that:
“Medicare clinicians who participate to a sufficient extent in Advanced Alternative Payment Models – would be exempt from [The Merit-based Incentive Payment System] MIPS reporting requirements and qualify for financial bonuses. These models include . . . Alternative Payment Models under which clinicians accept both risk and reward for providing coordinated, high-quality care.
“Many clinicians who participate to some extent in Alternative Payment Models may not meet the law’s requirements for sufficient participation in the most advanced models. The proposed rule is designed to provide these clinicians with financial rewards within MIPS, as well as to make it easy for clinicians to switch between the components of the Quality Payment Program based on what works best for them and their patients.”
(Administration takes first step to implement legislation modernizing how Medicare pays physicians for quality, DHHS, April 27, 2016)
The proposed rule established three criteria that APM participants will need to meet to satisfy MACRA’s nominal financial risk requirement:
- Marginal risk of at least 30 percent
- Minimal loss rate of no more than 4 percent
- Total potential risk of at least 4 percent of expected expenditures
Health policy experts noted the proposed rules mark a significant shift from what was expected. The appeal of APMs for many physicians focused on the 5 percent annual bonus that provides a more generous inflation update through 2024 than is available through MIPS—potentially a “real financial difference,” said one expert.
Another noted that the APMs require providers to both forgo revenue through a lower volume of services while investing millions in redesigning care, representing a significant risk to providers. “Not including Track 1 ACOs and bundled payment programs [in the proposed rules] could lead physicians to leave APMs and return to fee-for-service payment,” the expert noted. (“Many Existing APMs Excluded Under Proposed Physician Pay Rules,” HFMA Weekly, April 29, 2016)
Comments on the proposed rule will be accepted through June 26.
To read the full news release from DHHS, click here.
iProtean subscribers, the advanced Finance course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman, is in your library. Jennings and Grauman discuss the onset of alternative payment models within the context of population health management, and the levels of risk associated with these models.
For a complete list of iProtean courses, click here.
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