My post earlier this week on the pending changes to provider reimbursement resulted in a few emails from colleagues looking for clarification and more detail. So, here goes.
Well, everyone agreed that the Medicare doc payment program known as Sustainable Growth Rate (SGR) that had been in place for decades was not working. Details here.
And, CMS – as well as pretty much everyone in health policy not tied to a specialty medical society – wanted increased reimbursement for cognitive services, and lower payments for procedures – surgeries, imaging, etc.
So, in 2015 Congress repealed SGR and replaced with Medicare Access and CHIP Reauthorization Act (MACRA) (you can now forget what MACRA stands for. The highlights are, MACRA;
- Still uses CPTs and reimbursement based on RBRVS system
- Tosses out the old quality evaluation metrics and methodology, replacing it with one that seems more doc-friendly.
- The evaluation system is MIPS – Merit-based Incentive Payment System, and includes a value-based payment modifier, physician quality reporting system, and meaningful use of Electronic Health Records
- MIPS goes into effect in 2019, using data from 2017 and 2018 to evaluate provider performance. CMS expects docs who score high will get bonuses of 4 – 9% over the next five years.
- Provides for an annual payment increases of 0.5% thru 2019, then frozen till 2026
- Then .75% increase for APM providers (see below) and .25% for others
While those increases may seem pretty small, it’s important to understand that these are on the margin. That is, the extra payments may well double – or even triple, the profit margin for providers. Conversely, for providers that don’t meet standards, profits (or margins for not for profits) may hit zero.
What is the hoped for result?
With APM reimbursement going into effect in 2019, MACRA is intended to drive docs from fee for service (FFS) into a merit-based, quality-driven reimbursement system. However, participation in the Alternative Payment Model s not mandatory; and CMS’ expectation is the vast majority of docs will NOT be in APMs, even though APMs (which include) Medical Homes, ACOs, etc) can get lump sum bonuses of 5% from 2019 – 2024; after that reimbursement increases 0.75% annually.
What does this mean for workers’ comp?
RBRVS stays around, which is key as almost all provider fee schedules are based on RBRVS.
Providers are going to work very hard to meet CMS’ quality standards, regardless of whether they choose to stay with MIPS or go to APM. They have to; their financial viability is dependent on it.