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Medicare Unveils Overhaul of Doctors’ Pay

MACRA replaces Sustainable Growth Rate

The Department of Health and Human Services (HHS) has finalized a new payment system for Medicare clinicians as part of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Most medical professionals who bill Medicare—approximately 600,000 physicians, nurse practitioners, physician assistants, and certified registered nurse anesthetists—are affected by the rules. 

MACRA’s new reimbursement system—known as the Quality Payment Program—creates two pathways that allow clinicians to choose the pace at which they want to participate in the transition from a fee-for-service health care system to one that uses alternative payment models.

The first path—the Advanced Alternative Payment Model (APM)—allows clinicians to earn an incentive payment for participating in innovative payment systems. This involves accepting both financial risk and reward for performance, reporting quality measures to the government, and using electronic health records. During the first year, this payment path provides a flexible performance period so that physicians who are ready can “dive in” immediately, but those who need more time can prepare for participation later in the year, Medicare says.

The second path—known as the Merit-Based Incentive Payment System (MIPS)—allows clinicians who decide to participate in traditional Medicare Part B to earn a performance-based payment adjustment. For example, they could be part of an accountable care organization (ACO) where clinicians come together to coordinate care for the patients they serve. When the clinicians get better health results and reduce costs for the care of their patients, they receive a portion of the savings.

MACRA provides $20 million each year for five years to train and educate Medicare clinicians in practices of 15 clinicians or fewer and those working in underserved areas. Beginning in December 2016, local organizations will offer free specialized help to small practices using this funding.

Medicare’s previous congressionally mandated payment system—the Sustainable Growth Rate (SGR)—proved unworkable. The SGR called for automatic pay cuts when spending surpassed certain levels, and lawmakers routinely waived those reductions. MACRA was intended as a new beginning.

Sources: HHS; October 14, 2016; Quality Payment Program; October 2016; and Medical Xpress; October 14, 2016.

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