A Consumer’s Guide To Medicare’s New Rules On Doctor Pay

The federal government has issued final regulations that reform the way Medicare pays doctors. If the new rules achieve their intended goal, all Americans — and not just Medicare enrollees — could see improvements in the quality of their care.

The regulations, which were issued last month, stem from legislation Congress passed in April 2015 in an unusually strong bipartisan vote. The new payments will begin in 2019, but they will be based on quality measures physicians report starting in 2017.

Overall health care costs are a target of the law, too, and the rate of growth in costs could decline if the law’s mechanisms succeed. But it may be years before the government and researchers know if it is succeeding.

The previous payment formula was ineffective at motivating doctors to practice better medicine at lower cost. At the same time, it angered doctors because nearly every year it threatened to slash their reimbursements.  Congress regularly intervened to prevent that from 2002 to 2015.

Here’s a quick rundown on what the new rules mean for you.

What’s the biggest change? 

The new reimbursement system pegs part of doctors’ fees under Medicare to the quality and efficiency of the care they deliver. It also rewards doctors and other clinicians (physician assistants, nurse practitioners, etc.) who join or create larger organizations that will increasingly be paid overall fees for patient care instead of piecemeal “fee-for-service” payments.

That line item approach may work for car repairs, but in medicine it’s wasteful and promotes excessive and unnecessary care that can actually be harmful, the government contends, and most experts agree.