HHS and Congress will continue to align their efforts to replace fee-for-service payments with value based alternatives.
According to Deloitte, this shift to value-based reimbursement models creates a new paradigm in which care is delivered by an entire coordinated care community sharing in the responsibility—and risk—of outcomes and costs, touching almost every part of the health care delivery operation.
While this delivery system reform has been in the works for over a decade, the 2015 passage of the Medicare Access and CHIP Reauthorization Act (MACRA) has accelerated its momentum. The concept is to drive payment reform through creating new ways to pay physicians for Medicare beneficiaries, as well as create new funding for technical assistance, while also establishing new programs and requirements for data sharing and new federal advisory groups. It also repeals the Sustainable Growth Rate (SGR) formula that was previously used by the Centers for Medicare and Medicaid Services (CMS) to control spending by Medicare for physicians.
In doing so, MACRA helps to modernize the way Medicare will pay for physician services through rewarding value over volume. This is achieved by providing bonuses and penalties that are tied to performance. In other words, providers are paid more or less depending on their performance compared to a quality and efficiencies threshold. With these incentives, providers may develop and participate in different models of healthcare delivery that were implemented under the Medicare Quality Payment Program (QPP), known as merit-based incentive payment system (MIPS) and advanced alternative payment model (APM).
Under MIPS, providers are evaluated and paid based on quality, resource use, clinical practice improvement, and meaningful use of a certified electronic health records (EHR) system. During the 2017PY, CMS has estimated that 592,000 to 642,000 providers will be eligible to participate.
APM is a payment approach that provides additional incentive payments to high quality and cost effective care. It allows physicians to earn a 5% lump sum incentive payment each year from 2019 to 2024 and avoid IRS reporting requirements and payment adjustments. In 2019, Advanced APMs will earn this 5% incentive for their 2017 participation if they meet certain requirements. This includes receiving 25% of their Medicare Part B payments through an Advanced APM in addition to seeing 20% of their Medicare Patients through an Advanced APM. To qualify for advanced APMs there are three requirements that must be met: (1) utilize certified EHR technology; (2) Base payments on quality measures comparable to MIPs; and (3) be approved by CMS.
An important element of this shift will involve developing relationships and capabilities that align with value-based priorities. This would include alignment and collaboration between payers, providers, and consumers. Integration across all sectors are required in order to make this shift effective.