There are big changes coming to the Medicare incentive programs as we know them. Beginning on January 1, 2017, the new Quality Payment Program (the “Program”) will replace all existing Medicare incentive programs with a comprehensive incentive model. The Program will involve a modified set of EHR Meaningful Use requirements, new quality of care metrics, new cost efficiency goals and “clinical practice improvement activities” (for which physicians will be rewarded for care coordination, beneficiary engagement and patient safety). The Program will also have a separate track for incentive payments associated with participation in Advanced Alternative Payment Models (such as Accountable Care Organizations) (“APMs“).
Congress provided for the development of the Program in the 2015 Medicare Access and CHIP Reauthorization Act (the “MACRA”). Under the MACRA, the Program must be “budget-neutral” each year. In other words, the rewards paid by Medicare to well-performing physicians and practices must be equally offset by the penalties levied against poor-performing providers. The rewards will continue to take the form of payment adjustments to the Medicare Physician Fee Schedule. The first year of payment adjustments will be 2019, based on data from the 2017 reporting year. For 2019, the reward paid to (or penalty levied against) any provider may not exceed a 4% adjustment to the Medicare Physician Fee Schedule. However, in subsequent years, the limits are set to increase, reaching a maximum of 9% in 2022.
The potential for substantial penalties under the Program has led to concerns that the Program will make it difficult for smaller practices with higher numbers of Medicare patients to be financially viable. Foreseeing these economic issues, Congress earmarked $100 million over five years to help small practices successfully participate in the Program.
In June, the U.S. Department of Health and Human Services (“HHS”) announced that the first $20 million of these earmarked funds will be awarded by the end of 2016. The recipients of the funding will be organizations that provide education, training and consultation on the Program to small practices. In particular, these organizations will assist small practices in understanding what quality measures, EHR options and clinical practice improvement activities are most appropriate for their practices. The organizations will also help small practices evaluate their options for joining an APM. HHS has not announced when the organizations will begin training and educating small practices.
While the intention behind such training and education is laudable, it does not lay to rest the concern that small practices serving substantial Medicare populations will be under greater pressure and financial strain to continue to operate independently. After all, the Program itself must remain budget-neutral. If practices improve their compliance and quality of care metrics, payment adjustments will have to be reduced or compliance standards raised. In the long-term, this may lead to small practices being forced to join an APM in order to continue to serve Medicare patients.
Stay tuned for updates on the Program from CMS, including details on the final regulations for the Program. If you have specific questions about how the Program may affect your practice, be sure to contact a knowledgeable healthcare attorney.