Out­come-based pay­ments un­der­pin new Medi­care rules

Baltimore Sun - - FRONT PAGE - Andy Slavitt, Cen­ters for Medi­care and Med­i­caid Ser­vices The As­so­ci­ated Press and Bal­ti­more Sun re­porters Mered­ith Cohn and An­drea K. McDaniels con­trib­uted to this ar­ti­cle.

Medi­care un­veiled Fri­day a far-reach­ing over­haul of how it com­pen­sates doc­tors and other clin­i­cians with the goal of re­ward­ing qual­ity, cost-ef­fec­tive care in­stead of just pay­ing piece­meal for ser­vices.

The com­plex reg­u­la­tion is nearly 2,400 pages long and will take years to fully im­ple­ment. It’s meant to carry out bi­par­ti­san leg­is­la­tion passed by Congress and signed by Pres­i­dent Barack Obama last year.

Whether it suc­ceeds or fails, it’s one of the big­gest changes in 50-year his­tory of Medi­care, the gov­ern­ment-spon­sored health in­sur­ance pro­gram for older Amer­i­cans that ac­counts for about one of ev­ery five dol­lars spent on health care in the United States. It serves about 57 mil­lion peo­ple.

While the con­cept of pay­ing for qual­ity en­joys broad sup­port, the de­tails have been a source of trep­i­da­tion for some physi­cians who worry that the new sys­tem will force small prac­tices and old-fash­ioned solo

doc­tors to join big groups. Pa­tients may start hear­ing soon about the changes from their doc­tors, but it’s still too early to dis­cern the ef­fects.

The Obama ad­min­is­tra­tion sought to calm con­cerns Fri­day.

“Trans­form­ing some­thing of this size is some­thing we have fo­cused on with great care,” said Andy Slavitt, head of the fed­eral Cen­ters for Medi­care and Med­i­caid Ser­vices.

Of­fi­cials said they con­sid­ered more than 4,000 for­mal com­ments and held meet­ings around the coun­try at­tended by more than 100,000 peo­ple be­fore is­su­ing the fi­nal rule, which gives clin­i­cians more time to com­ply. The ad­min­is­tra­tion will con­tinue to ac­cept com­ments and sug­ges­tions.

The Medi­care Ac­cess and CHIP Reau­tho­riza­tion Act, known as MACRA, cre­ates two new pay­ment sys­tems, or tracks, for clin­i­cians. The ma­jor­ity of med­i­cal pro­fes­sion­als who bill Medi­care — more than 600,000 doc­tors, nurse prac­ti­tion­ers, physi­cian as­sis­tants and ther­a­pists — are af­fected. Med­i­cal prac­tices must de­cide next year which track they will take.

Start­ing in 2019, clin­i­cians can earn higher re­im­burse­ments if they join a lead­ing-edge track that’s called Al­ter­na­tive Pay­ment Mod­els to learn new ways of do­ing busi­ness. That in­volves be­ing will­ing to ac­cept fi­nan­cial risks and re­wards for per­for­mance, re­port­ing qual­ity mea­sures to the gov­ern­ment, and us­ing elec­tronic med­i­cal records.

Medi­care said some 70,000 to 120,000 clin­i­cians are ex­pected to ini­tially take that track, which is more chal­leng­ing. Of­fi­cials hope that num­ber will grow quickly.

Most clin­i­cal prac­ti­tion­ers — an es­ti­mated 590,000 to 640,000 — are ex­pected to join a sec­ond track, called the Mer­it­Based In­cen­tive Pay­ment Sys­tem. It fea­tures more mod­est fi­nan­cial in­cen­tives, and ac­count­abil­ity for qual­ity, ef­fi­ciency, use of elec­tronic med­i­cal records and self-im­prove­ment.

Fi­nally, about 380,000 clin­i­cians are ex­pected to be ex­empt from the new sys­tems be­cause they don’t see enough Medi­care pa­tients, or their billings do not reach a given thresh­old.

“This law and this reg­u­la­tion are go­ing to need to evolve as medicine evolves,” Slavitt said.

Doc­tors in Mary­land, in­clud­ing those at Greater Bal­ti­more Med­i­cal Cen­ter and Mercy Med­i­cal Cen­ter, said that they needed time to re­view the changes be­fore they could com­ment.

Gene Ran­som, CEO of MedChi, which rep­re­sents many of the state’s doc­tors, said not hav­ing to worry about a Medi­care cut ev­ery year would be a wel­come change.

But he said most doc­tors wouldn’t qual­ify for the ad­vanced pay­ment model and wor­ried a sys­tem of value-based pay­ment might make a doc­tor’s job more com­pli­cated.

“It is mak­ing it harder to prac­tice medicine,” Ran­som said. “We un­der­stand what they are try­ing to do, but this is an­other large bur­den and an­other large cost to physi­cian prac­tices.”

Many doc­tors, how­ever, should find as­pects of the new Medi­care sys­tem fa­mil­iar, par­tic­u­larly in Mary­land.

Doc­tors al­ready par­tic­i­pate in pro­grams through pri­vate in­sur­ers that ap­proach re­im­burse­ment in much the same way as MACRA, said Jonathan P. Weiner, pro­fes­sor of health pol­icy and man­age­ment in the Johns Hop­kins Bloomberg School of Pub­lic Health.

CareFirst BlueCross BlueShield, the state’s largest in­surer, for ex­am­ple, has opened its so-called pa­tient­cen­tered med­i­cal home pro­gram to all its pri­mary care doc­tors. It pro­vides re­wards to them for co­or­di­nat­ing care with a pa­tient’s spe­cial­ists and hos­pi­tals to im­prove care and cut costs. Other groups of doc­tors co­or­di­nate care through so-called ac­count­able care or­ga­ni­za­tions pro­moted by the Af­ford­able Care Act.

Both of those struc­tures are ex­am­ples of the ad­vanced pay­ment model, Weiner said.

MACRA op­tions also are still largely fee-for-ser­vice based, only with in­cen­tives to ei­ther add pre­ven­tive ser­vices and screens or go a bit fur­ther to co­or­di­nate care, Weiner said. Even­tu­ally, he said, Medi­care could move en­tirely to a model where pay­ments hinge on a com­mu­nity of pa­tients’ out­comes rather than on piece­meal ser­vices.

For now, he said, changes to Medi­care pay­ments are “re­ally just a con­tin­u­a­tion of what’s been hap­pen­ing over the last few years. … Some­times ideas and pol­icy aren’t a per­fect match, but this is a sound pol­icy, in my opin­ion.”

Ad­vo­cates say the new sys­tem will im­prove qual­ity and help check costs.

But crit­ics say the com­pli­cated re­quire­ments could prove over­whelm­ing. The ad­min­is­tra­tion says some doc­tors will be pleas­antly sur­prised to find out that re­port­ing re­quire­ments have been stream­lined to make them eas­ier to meet.

The Obama ad­min­is­tra­tion has pushed to over­haul pay­ment not only for doc­tors, but also for hos­pi­tals and pri­vate in­sur­ance plans that serve many ben­e­fi­cia­ries.

While some qual­ity im­prove­ments have al­ready been noted, it’s likely to take years to see whether the new ap­proach can lead to ma­jor sav­ings that help keep Medi­care sus­tain­able over the long run.

Mary­land’s hos­pi­tals op­er­ate un­der an ex­per­i­men­tal re­im­burse­ment ar­range­ment with Medi­care that gives them a fixed bud­get to man­age the health of their pa­tient pop­u­la­tions. The state is only half­way through the first five years of that ex­per­i­ment, which is unique to Mary­land and is de­signed to con­trol costs and im­prove pa­tient out­comes.

Medi­care’s pre­vi­ous sys­tem for pay­ing doc­tors — man­dated by Congress — proved un­work­able. It called for au­to­matic cuts when spend­ing sur­passed cer­tain lev­els, and law­mak­ers rou­tinely waived those re­duc­tions. MACRA was in­tended by law­mak­ers as a new be­gin­ning.

“This law and this reg­u­la­tion are go­ing to need to evolve.”


Paul Tay­lor II, who works for Price­wa­ter­house­Coop­ers, takes ad­van­tage of the firm’s ben­e­fit pack­age, which helps him pay back a por­tion of his stu­dent loan.

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