May The Era Of Medicare’s Doc Fix (1997-2015) Rest In Peace. Now What?

The New Deal

So what has been conjured, then, as the solution to the failures of the doc fix era? Before we bury the SGR under spilled champagne, we should consider what Congress is actually replacing it with. Having spent several years engineering it, there’s a lot to unpack.

For all of our sakes, I’m going to pass for now on the so-called “extenders” and other appended policies, though I’ll return to them briefly in a bit, so we can focus on the parts that will govern physician payments going forward.

First and probably most importantly, the formulaic approach to setting base payment rates is gone, replaced with automatic increases for all doctors from 2015 through 2019. For six years after that, in what I’d like to style the Liminal Phase, no automatic increases will be provided and doctors’ respective rates will be altered based on their performance under a Merit-Based Payment Incentive System (MIPS).

The MIPS is basically a consolidation of three pay-for-performance programs already underway and the addition of another. To bring back the weight of historical context, one of those preexisting programs, the Physician Quality Reporting System (PQRS), was created by our friend “Trisha” in 2006. Current penalties under these programs are repealed, though, and the new incentive structure would be budget neutral. For every doctor that makes more from the MIPS, there will be one who makes less. A true zero sum game, if you will.

Assessments will be based on four categories of metrics: (1) quality; (2) resource use (or efficiency); (3) meaningful use of electronic health records (sound familiar?); and (4) clinical practice improvement activities. The poorest performing doctors, determined by their composite score drawn from relevant aspects of all four categories, will see their payments cut by up to nine (nine!) percent.

Here’s a curious thing: In lieu of the existing mandate that quality measures be endorsed by the National Quality Forum (NQF) or the like, the Centers for Medicare and Medicaid Services (CMS) itself must pursue publication of “evidence-based” measures in a peer-reviewed journal. NQF’s multi-stakeholder process for endorsing measures can be lengthy, for sure, but the mandate that they be submitted for publication (though not necessarily published) is a debatable substitute for gaining meaningful clinical and consumer support.

Futurists all, Congress here would also set payments for the years 2026 and beyond. Then, the degree to which an individual doctor’s pay is increased will be dictated by their participation in so-called Advance Payment Models (APMs). Right now, that means accountable care organizations (ACOs), medical homes, bundled payment models, and the like. What that’s going to mean in 2026, I can’t say. What I can say is, god willing, I won’t be writing about it by then.

Accommodations are made for doctors practicing in rural areas or in specialties that may not appear ripe for an APM approach. There is a significant front-loading of incentives too, intended to urge docs to get in the game and to cover some of their start-up costs. From 2019-2025, physicians participating in an APM will get paid five percent more than their peers.

It is also worth noting that additional funding is allocated for quality measure development, with a plan for this effort due from CMS by May 1, 2016, and annual progress reports thereafter. The SGR deal also codifies the recent institution of Medicare payment for chronic care management activities – the “behind the scenes” work that physicians must do to take care of patients with ongoing health needs. Historically, the fee-for-service payment system did not account for these important strategies.

Another aspect of the bill that swims with the recent tide of CMS activity is the requirement that the agency publish information regarding physician payments and resource utilization. This type of information was recently published stand-alone (causing a bit of a stir) but must be integrated into thePhysician Compare website by 2016. Additional distribution of de-identified Medicare claims data is also permitted to enhance quality improvement and related activities.

There are some additional important provisions, including fairly robust reform of Medicare audits and other program integrity activities, but we’ll defer those items to another day. Here we’ve covered the most significant provisions governing physician payments themselves.