Continuing its work on repealing SGR and replacing it with
new payment models, the US House Energy and Commerce Committee late last week
released draft
legislation for comment. This is the
second time the committee has released draft legislation, with all indicators
pointing to a true commitment to ending Medicare physician reimbursement as we
know it.
So what would reimbursement look like if this legislation
passed? The bill splits physicians into
two categories, and intends to pay them differently based on a choice that they
make. What is the choice? First, physicians can choose to remain in fee
for service reimbursement. But this will
not be business as usual. Staying in
fee-for-service means that you will now be judged by new “competency measures”
to determine the quality of the care you are providing and even the delivery
process you choose. The federal
government, with the assistance of national and state medical and specialty
societies, will come up with a list of core measures for each medical specialty. You choose what specialty group you want to
be measured with, and then the measurement begins.
Right now, there are two possibilities for how the
“competency measures” will work:
(1) The first is a “benchmark”
method, which will set standards you will try to meet, with the better
achievers getting better reimbursement updates; (2) The second is a “percentile” method, which
will not set a definite benchmark but rather will compare all physicians within
a specialty against each other, with the highest percentile physicians getting
better reimbursement. At the end of what
is called a “performance year” your Medicare fee-for-service reimbursement will
be adjusted up or down depending on how well you do.
Physicians do have another choice under this proposed law,
and that’s to enter into what the US House is calling “Alternative Payment
Models.” If you engage in this program,
you are not subject to the fee-for-service updates. Instead, you will be able to choose from a
list of approved payment models, or develop one on your own (as long as you can
get it approved!). CMS will even give
your practice de-identified claims data to use in the development of new
payment ideas. Suggestions right now for
the type of payment models that would be approved under the Alternative Payment
Model format include accountable care organizations, bundled or episode-of-care
payments, gain-sharing arrangements, and the patient-centered medical home
model.
Two things are clear right now in the midst of the murky
waters of Medicare payment reform. The
first is that fee-for-service is not going away, but quality measures are going
to start having a more significant impact on reimbursement. The second is that policymakers are trying to
incentivize physicians to step out of fee-for-service and into new payment
models. What is the incentive? Basically, the House bill goes down a road of
making fee-for-service a losing proposition, while alternative payment models
have the possibility of upside.
Here’s why. If you
ignore the “competency measures” and try to continue fee-for-service as we know
it, then you are going to get dinged every year with reimbursement penalties
and decreases. If you comply with the
“competency measures,” this means you are likely reducing your volume,
increasing practice expense to enhance quality, and perhaps seeing a slight
percentage increase for your efforts (which may not cover the reduced volume
and increased practice expense). On the
other hand, if you enter into an alternative payment model, you have the
potential to share the savings you are creating by reducing volume and
enhancing quality. There is no mechanism
in the fee-for-service option to get access to these dollars; these dollars are only available in the
alternative payment models.
So, SGR may finally be abolished. But a new horizon means new choices for
physicians, neither of which are business as usual. Stay tuned for more coverage of this issue
along with analysis of new payment models and the pros and cons for physicians.
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