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Five New(ish) Acronyms That Are Changing Physician Payment

How They Will Affect You

Avitzur, Orly, MD, MBA, FAAN

doi: 10.1097/01.NT.0000481849.13827.59
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ARTICLE IN BRIEF

The article provides a guide to five acronyms for reimbursement models in place since the Medicare Access and CHIP Reauthorization Act of 2015 was voted into law.

It's time to say goodbye to fee-for-service as we know it. Historically, we've been paid on the basis of volume: the harder we work (the more patients we see or more services we perform), the more we (or our departments) are paid. But in the new era of value-based health care, the rules are changing. Here is your guide to the new alphabet-soup list of reimbursement terms, some of which will have an impact on how providers will be paid in 2019 based on your performance as soon as next year.

1. MACRA: The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed into law on April 16, 2015, by President Obama, amended title XVIII of the Social Security Act to repeal the Medicare sustainable growth rate (SGR) and strengthen Medicare access. It makes significant changes to the way that Medicare pays physicians, accelerating Medicare's shift toward value-based payments.

How it will affect your paycheck: Regardless of your practice setting — private practice, university- or hospital-based — the new MACRAnomics will change both how you practice and what you're paid. The clock has already started to tick: beginning in the second half of 2015 and extending through 2019, the Medicare Physician Fee Schedule (PFS) payment rates will increase by 0.5 percent annually. The law then freezes payment rates for the five-year period from 2020-2025. There will be two tracks from which physicians and other eligible providers are required to choose. Beginning in 2026, payment rates will be updated either by 0.25 percent annually for providers participating in the Merit-Based Incentive Payment System (MIPS); or by 0.75 percent annually for providers participating in the Alternative Payment Models (APMs) track.

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2. MIPS: The Merit-Based Incentive Payment System can be thought of as a revamped fee-for-service (FFS) model and will replace three current Medicare quality and payment programs: the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBPM), and the Medicare EHR Incentive Program (Meaningful Use). Yes, contrary to rumors, meaningful use is not dead, only resurrected in a new form called MIPS. (Those rumors may have started circulating in January, when CMS Acting Administrator Andy Slavitt told attendees at the J.P. Morgan Annual Health Care Conference: “We have to get the hearts and minds of physicians back. I think we've lost them.”)

MIPS combines into a single consolidated program the efforts of these three programs: Meaningful Use of Certified EHR Technology (25 percent); Quality (30 percent); Resource Use (30 percent); as well as a new element called Clinical Practice Improvement Activities (15 percent) borrowed from MOC, or maintenance of certification — an acronym that triggered a physician revolt. (See Neurology Today's “AAN's Call for Repeal of MOC Part IV Awaits Action from Credentialing Board”: http://bit.ly/NT-MOC.)

How it will affect your paycheck: Because MACRA is a budget-neutral system, there will be winners and losers. Like current Medicare quality programs, MIPS will incorporate penalties and bonuses, which will be based on performance scores that are either above or below annual thresholds. But the upside gain can be a boon for high performers. In addition to the base payment adjustment, MIPS legislation defines an “exceptional performance bonus” of up to 10 percent for MIPS-eligible professionals who exceed the 25th percentile of all MIPS scores above the threshold.

In each performance year starting in 2017 — with the usual two-year lag, 2017 will determine how you are paid in 2019 — CMS sets a “performance threshold” or PT — the number of points at which a provider earning PT points receives no adjustment to their Medicare Part B payments. If the provider's PT equals 50, he or she will get no payment adjustment. A provider earning 51 points or above will earn an incentive, whereas one achieving only 49 points or below will be assessed a penalty. These payment adjustments grow linearly until maximum incentives or penalties are reached.

In 2019, the maximum adjustment to reimbursements will be (+/-) 4 percent and will increase until 2022 to (+/-) 9 percent. After 2022, the program will continue incentives and penalties at the (+/-) 9 percent rate. This rate would then be multiplied by Medicare's scaling factor, which could be up to three times the reimbursement increases. This means that a provider receiving a 9 percent increase in reimbursement based on a high MIPS score could theoretically receive a 27 percent increase. (The level of effort required to achieve this windfall is likely extraordinary, however.)

3. APMs: Alternative payment models, the alternative track under MACRA, allow providers to opt out of MIPS. To qualify as an APM participant, providers must meet increasing thresholds for the percentage of the revenue they receive through qualifying APMs, defined as those which require participating providers to take on “more than nominal” financial risk; report quality measures; and use certified EHR technology. (The financial risk or downside may include not only incurring the expenses of hiring additional personnel, data or health services research expertise and investing in information technology infrastructure, but also potential losses if the cost of providing services exceeds payments.) The AAN is creating APMs around neurologic conditions for our members to use.

How it will affect your paycheck: From 2019 to 2024, providers qualifying for the APM track will receive a 5 percent annual lump sum bonus on PFS payments. From 2019-2020, 25 percent of Medicare revenue must be received through APMs; from 2021-2022, 50 percent of Medicare revenue or 50 percent of all-payer revenue along with 25 percent of Medicare revenue must be received through APMs; in 2023 and beyond, 75 percent of Medicare revenue or 75 percent of all-payer revenue along with 25 percent of Medicare revenue must be received through APMs. In addition to the 5 percent lump sum, providers may also qualify to receive shared savings or bonus payments for positive APM performance

4. ACOs: Accountable care organizations — networks of doctors, hospitals, and other health care providers that coordinate patient care and become eligible for bonuses when they deliver that care more efficiently — are mostly centered now around primary care physicians. (In private ACOs, insurers can also play a part). ACOs make providers jointly accountable for the health of their patients, and provide them with financial incentives to cooperate and save money by avoiding unnecessary tests and procedures; but they may also assume financial risk, such as the cost of investments to improve care if they fail, or financial penalties if so designed and the ACO fails to meet performance and savings benchmarks.

How it will affect your paycheck: If you participate in a qualified ACO, you may be eligible to opt out of MIPS and use the APM track. As specialists, we will typically need to abide by the decisions — bylaws, access to specialists, and compensation distribution, for example — made by the leaders who govern the ACO. That's why it's so important to be part of these organizations, much as we participate in our other interdisciplinary teams.

5. VBM or VM: The Value-Based Payment Modifier Program adjusts Medicare PFS payments to a physician or group of physicians (as identified by their Taxpayer Identification Number, or TIN), based on the quality and cost of care furnished to their Medicare FFS beneficiaries.

How it will affect your paycheck: Beginning January 1, 2015, the Value Modifier was applied to physician payments under the Medicare PFS for physicians in TINs with 100 or more eligible professionals, based on 2013 as the performance year. As of January 1 of this year, the VM began to be applied to physician payments for 10 or more eligible professionals, based on 2014 as the performance period. Beginning January 1, 2017, the VM will be applied to physician payments for physician solo practitioners and physicians in groups with two or more eligible professionals, based on their 2015 performance.

For more information about MACRA, stop by the Real World of Neurology MACRA exhibit during the AAN Annual Meeting in Vancouver, and stay posted as the details of MACRA's execution unfold; more information is expected later this month.

Dr. Avitzur is chair of the AAN Medical Economics and Management Committee, an associate editor of Neurology Today, and the editor-in-chief of Neurology Now. She has a private practice in Tarrytown, NY, and holds academic appointments at Yale University School of Medicine and New York Medical College.

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•. For more information about MACRA, APMs, MIPs and ACOs, see http://aan.com/view/macra.
    © 2016 American Academy of Neurology