Written by Brooke Haycraft, CEMC, CFPC, CPC-H, CPC
On Tuesday, April 14th, the Senate overwhelmingly passed the long-awaited Medicare Access and CHIP Reauthorization Act of 2015 with a 92 to 8 vote. This vote will repeal the flawed Sustainable Growth Rate (SGR) and dispose of a 21% Medicare payment cut that was originally to take effect earlier in April. This bill was then signed into law by President Obama on Thursday, April 16th.
So, what does this new bill mean for health care providers in the coming months and years beyond? Under the new legislation, the payment rate in the Medicare physician fee schedule is due to rise .5% on July 1, 2015 and then an additional .5% each year thru 2019. Beginning in 2020, this increased payment rate will then stay at a 0% update through 2025. Finally, in 2026, the fee schedule will divide into two sectors; one to represent physicians who participate with the alternative payment models (APM) and the others who do not.
Physicians who participate in APM will be entitled to extra reimbursement through shared savings for accountable care organizations (ACOs), shared savings for patient-centered medical homes, or care management fees. Providers may also be rewarded an additional 5% bonus each year from 2019-2024 if they receive a significant portion of their earnings through an APM structure.
To expedite the shift from quantity to quality based payments, a merit-based incentive payment system (MIPS) will be implemented in 2019 and will continue through 2024. MIPS is designated to replace previous government incentive programs and will score providers on quality, resource use, clinical practice improvement activities, and meaningful use of certified electronic health record technology. Physicians with superior performance scores will be rewarded with additional reimbursement while providers that score poorly may be subject to decreases in government reimbursement of up to 9% by the year 2022.
Now that SGR has officially been discarded, health care providers will now be able to shift towards models of care that focus on quality, patient-centered care that encourages care coordination rather than the past, ‘fee-for-service’ system that rewarded volume/quantity rather than quality of care. Models of this nature include accountable care organizations (ACOs), ‘bundled’ provider payments, and patient-centered medical homes.