Federal regulators proposed a rule Wednesday that will adjust hundreds of thousands of physicians’Medicare payments to reward or penalize them based on how healthy they keep their patients.
The announcement by the Department of Health and Human Services comes a year after Congress passed a law that was known as the “doc fix” bill and prevented a huge cut in Medicare payments. It also authorized HHS to come up with more streamlined ways of paying doctors that emphasize quality over quantity of services.
CMS Administrator Andy Slavitt, speaking to reporters Wednesday, noted that “often we don’t pay physicians for the best care they can give.”
The announcement is not just another incremental development associated with the Affordable Care Act’s mission to reverse the health care system’s tendency to authorize unnecessary tests and procedures. It will encourage doctors to try new ways to keep people healthier, such as with home visits or help with housing – things that fall outside of traditional forms of reimbursable medicine.
Unlike much of healthcare, the doc fix bill was supported by a bipartisan majority along with patient groups and medical associations.
“We are working with the medical community to advance our collective vision for Medicare payment reform,” said Patrick Conway, a physician who is CMS’ acting principal deputy administrator and chief medical officer. “By proposing a flexible, rather than a one-size-fits-all program, we are attempting to reflect how doctors and other clinicians deliver care and give them the opportunity to participate in a way that is best for them, their practice, and their patients.”
The proposed rule is expected to encourage all physicians to try innovative ways to keep their patients healthy. That could include hiring a nurse to connect patients with social services in the community or helping them get home-based services instead of going to a rehabilitation hospital.
Steven Stack, a physician who is president of the American Medical Association, applauded the proposal, noting that it appeared CMS was listening to doctors’ concerns about the complexity in quality reporting and payment.
“It is hard to overstate the significance of these proposed regulations for patients and physicians,” Stack said in a statement.
When Congress passed the doc fix law last year, Stack says “lawmakers signaled that they wanted to transform Medicare by promoting flexibility and innovation in the delivery of care, changes that could lead to improved quality and better outcomes for patients.”
Hospitals participating in CMS’ various pilot projects and alternative payment models have found that keeping people in housing or even just getting them an air conditioner can save money by keeping them out of the hospital.
The proposed rule seeks to streamline a variety of Medicare payment programs. Performance would be measured starting in 2017 and payments would be based on those measures starting in 2019.