The new Quality Payment Program is the result of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and replaces the flawed Sustainable Growth Rate (SGR) basis for calculating the rate at which eligible providers (EPs) are paid for services to Medicare patients. The SGR was put in place as part of the Balanced Budget Act of 1997 replacing the previous Medicare Volume Performance Standard (MVPS) for calculating reimbursements on the physician fee schedule.
The MVPS was a volume-based fee-for-service reimbursement program which may have led to excessive ordering of services by some less-than-totally-ethical providers. The SGR was an attempt to curtail the increasing payments by relating the reimbursement rate to growth rate of the national economy, the GDP. Since this did not work that well following the 2002 recession, congress has had to enact legislation each year to keep from reducing physician payments called the “doc fix”.
Even so, since it was based on a fee for service model, it rewarded the quantity of services provided, not the quality; the volume of services, not the value of those services for the patient. Consequently, some unscrupulous providers took advantage of the program and ordered products and services that were not necessary for the welfare of the patient, and in some cases may have even been detrimental.
The Quality Payment Program is designed to correct that problem and reward the value of the care provided in effecting a positive outcome for the patient. It provides two pathways for providers to achieve that reward. The first is the Merit-based Incentive Payment System (MIPS), and the second is the Advanced Alternative Payment Model.
According to the CMS’s NOTICE OF PROPOSED RULE MAKING for MACRA, the MIPS pathway is designed to replace the “patchwork of programs, including the Physician Quality Reporting System, the Value Modifier Program, and the Medicare Electronic Health Record (EHR) Incentive Program.”
The total of the MIPS score comes from those now defunct programs, plus one new one:
- 50% from the Physician Quality Reporting System (PQRS),
- 10% from the cost component of the Value Modifier Program,
- 25% from Meaningful Use (MU) of the Medicare EHR Incentive Program, and
- 15% comes from clinical practice improvements which may include participation in alternative payment models and patient-centered medical homes.
In regard to the Advanced Alternative Payment Model pathway, the CMS says that they are the “Innovation Center models, Shared Savings Program tracks, or statutorily-required demonstrations where clinicians accept both risk and reward for providing coordinated, high-quality, and efficient care.”. More specifically, they would include:
- Comprehensive ESRD Care Model (Large Dialysis Organization arrangement)
- Medicare Shared Savings Program—Track 3
- Next Generation ACO Model
- Comprehensive Primary Care Plus (CPC+)
- Oncology Care Model Two-Sided Risk Arrangement
- Medicare Shared Savings Program—Track 2 (available in 2018)
Reimbursement under the Quality Payment Program begins in 2019, but is based on participation levels as of January 1, 2017. According to this September statement by Acting Administrator of CMS, Andy Slavitt, providers can avoid having a negative payment adjustment in 2019 by at least providing some data, can qualify for a positive payment adjustment by providing data for part of the year and up to a 5% increase by reporting for the entire year. So it is imperative that physicians be ready to participate, at least minimally, by January 1, 2017.
For more information on the various participation levels read this previous Pick Your Pace blog.
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