CMS unveils new Medicare payment proposal

On April 27, The Centers for Medicare and Medicaid (CMS) released, for public comment, proposed changes to how Medicare will pay providers.

The proposed rule for the Medicare Access and CHIP Reauthorization Act (MACRA), enacted a year ago by Congress, eliminates the Sustainable Growth Rate (SGR) formula for setting reimbursement rates and simplifies many of the reporting requirements for doctors regarding quality metrics and use of electronic health records (EHRs). Parts of these programs would be put into the new one.

The plan is thick, more than 950-pages, but it would replace a hodgepodge of programs that currently regulate how Medicare pays physicians with a new Merit-based Incentive Payment System (MIPS), that essentially is designed to reward providers for the quality of the care they deliver – not the quantity.

The new system would consolidate components of three existing programs: The Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM) and the Medicare Electronic Health Record (HER) Incentive Program for Eligible Providers.

MIPS would look at four performance categories: cost, quality, how providers use and share electronic health record (EHR) technology with other providers, and what other actions providers take to improve care.

Physicians who receive high scores can receive adjustments to their Medicare reimbursements – up to 4 percent in the first year and as much as 9 percent is 2022. By the same token, those who score lower will see their reimbursements go down. CMS estimated that MIPS could affect up to 1.2 million clinicians.

There is another payment option under the new plan. Dubbed Alternative Payment Models (APM), these advance payment systems reward some providers with a lump-sum incentive payment for quality improvement and costs savings. The annual bonus would be 5 percent of their reimbursement from 2019 to 2024, and provides that their fee schedule rates grow 0.5 percentage points faster than those of MIPS in 2026 and beyond. Providers who choose this option would be exempt from MIPS reporting requirements.

CMS has said it expects that in the first year of the program most providers will choose the MIPS path.

Comments on the proposal are being accepted until June 26, with CMS expected to issue a final rule this fall. While the program wouldn’t go into effect until 2019, the first performance period would begin on Jan. 1, 2017.

As we stated, the document is lengthy and complicated. The Health Law Offices of Anthony C. Vitale can assist you in understanding these proposed changes and what they might mean to your practice. Give us a call at 305-358-4500.