Medicare Finalizes New Physician Payment System Rules for MIPS & MACRA

Last week, the Centers for Medicare & Medicaid Services (CMS) released a final rule implementing a new Medicare physician payment system, which replaces the flawed sustainable growth rate formula and marks the most significant change to Medicare physician reimbursement in 20 years. Beginning in 2017, physician practices can choose between two payment tracks – the Merit-Based Incentive Payment System (MIPS) and risk-based alternative payment models (APMs). At the outset, there are relatively few APM opportunities, and CMS estimates that more than 90% of physicians will participate in MIPS, making it the default track.

MIPS increases or decreases physician Medicare reimbursement rates based on performance on measures in four categories: quality, cost, EHR use, and clinical practice improvement activities. Payments in 2019 will be adjusted based on 2017 performance, and the cost category will not be counted in 2017. 2017 will be a transition year and physician practices will have four options for engaging in MIPS: 

  1. Report all required measures for at least 90 consecutive days and be eligible for a bonus payment; 
  2. Report more than one quality measure, more than one improvement activity, and the required EHR measures for at least 90 consecutive days and be eligible for a small bonus payment; 
  3. Report one quality measure, one improvement activity, or the required EHR measures and avoid a penalty; or
  4. Do nothing and receive a 4% payment penalty in 2019. 

Population Health Management; A Strategy and Delivery Model

It’s clear that healthcare reform, population health management and  value-based payment trends are leading payors, hospitals, health systems and medical groups to consider new delivery models and strategies to enhance their capabilities in providing value-based care, reducing cost  and improving quality and efficiency.

CMS and payors are looking to accelerate the transition from volume to value and population health through targeted incentives. Going forward, healthcare leaders need to understand population health management concepts and should pay close attention to evolving federal and commercial payment structures so they can position their organizations for financial success in the new value-based world.

A refined and comprehensive population health management strategy can advance important goals for an anesthesia group and their affiliated health care organization:

  • Enhancement of quality of care and improvement of patient outcomes;
  • Promotion of safe medical practices;
  • Sharing of best clinical practices;
  • Increased efficiency in care delivery;
  • Facilitation of appropriate utilization of services; and
  • Alignment of financial incentives.

Mastering these population health concepts will be a must for anesthesia groups that want to stay in sync with their hospital administrators, who are looking to position their organizations for success in this new value-based world.