New Medicare Payment System Beats Old Hands Down, Says ACP

A whole new set of choices related to payment plans are emerging now that the sustainable growth rate (SGR) for Medicare payments has expired.

The changes will affect the way practitioners are paid by Uncle Sam, according to policy experts here at the American College of Physicians (ACP) Internal Medicine 2015.

The old formula was designed to reduce payments every time they exceeded the growth in per capita gross domestic product, so Robert Doherty, senior vice president of governmental affairs and public policy for the ACP, said he and his colleagues are not sad to see it go.

"One of the many problems with the SGR was that it penalized physicians; no matter how efficient you are, or your quality, you got cut the same," he said during a news conference outlining what internists and general practitioners can expect under new payment systems.

"The SGR created a huge amount of uncertainty for us in practice, and it was perennial," said Nitin Damle, MD, from an internal medicine practice in Wakefield, Rhode Island, who is president-elect of the ACP.

The roller-coaster ride of legislative changes to and patches of the SGR left gaps in payments and played havoc with practice cash flow, Dr Damle reported.

All that ended on April 16, when President Obama signed into law the Medicare Access and Children's Health Insurance Program Reauthorization Act, a bill that met with exceedingly rare bipartisan support in both houses of Congress.

New Payment System

Under the new law, there will be annual increases in payments of 0.5%, beginning July 1 and continuing until the end of 2019.

Starting in 2019, existing Medicare quality-reporting and incentive programs, including the Physician Quality Reporting System, Value-Based Payment Modifier, and Meaningful Use, will be consolidated into a single program, dubbed the Merit-based Incentive Payment System.

At the end of 2018, current penalties for failure to report quality measures, to implement an electronic health record, and to provide adequate value-based care will be eliminated. As of January 1, 2019, physicians will be paid according to Merit-adjusted payment rates.

Under this system, physicians will get credit for quality-improvement initiatives, and there will be strong incentives to transition to the patient-centered medical home model of care, Doherty explained.

It will also be possible for high-performing physicians to earn additional payments from a pool of up to $500 million per year from 2019 to 2024. Doherty pointed out that these funds are new to the Merit-based Incentive Payment System and don't exist under the current Medicare incentive or reporting programs. There will also be a pool of $20 million annually specifically to help smaller practices.