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Radical Changes to Medicare Reimbursements – Keystone Elder Law – Mechanicsburg PA

Radical Changes to Medicare Reimbursements

Health care providers’ traditional method of billing Medicare has been fee-for-service, under which they receive a set payment based on specific services which have been rendered. This type of system potentially promotes an increased utilization of services in order for a provider to improve revenues.  For example, a physician may shorten appointments so that more patients can be seen per day, or a patient in the hospital may receive additional tests “just to be sure” (as long as these tests are considered generally reasonable for the situation).

Last fall, final regulations were revealed for the reform of this approach to billing. The Medicare Access and CHIP Reauthorization Act (MACRA) changes the focus of Medicare reimbursement from strictly fee-for-service to a quality payment program.  Under the new regulations, adjustments to Medicare reimbursement rates will be made based on provider performance.  The goal of this new approach is to increase the focus on the outcomes of care.  Reimbursement rates will be determined by the Centers for Medicare & Medicaid Services based on specific data submitted by providers.  Hence, different providers may be paid different rates for the same services.

In order to participate in a quality payment system, a provider must bill Medicare more than $30,000 per year and provide care for more than 100 Medicare patients per year. Providers can choose between two different tracts within the quality payment system.

Under the Merit-Based Incentive Payment System (MIPS), providers must show “proof of high quality efficient care supported by technology” by the submission of data in three areas in 2017. Quality measures will comprise 60% of a provider’s overall effectiveness, and the provider must choose six specific measures from a list of over 270 and report data for a minimum of 90 days.  Advancing care information will comprise 25%, and includes measures such as e-prescribing and the provision of patient specific information.  The third area is improvement activities, which focuses on measures of care coordination and beneficiary engagement (people actively involved in managing their own health).  Improvement activities will count toward 15% of the provider’s overall effectiveness.  Beginning in 2018, these percentages will be readjusted as a cost category will be added to the calculation.  If a provider does not participate in MIPS or the other program tract, a negative 4% payment adjustment will automatically apply.  Otherwise, the amount of the payment adjustments will reflect the quantity of data which is submitted and the results which are demonstrated by that data.

The second tract within the quality payment system is the Advanced Alternative Payment Model (APM), in which incentive payments are provided for participation in creative payment plans (such as several providers across various settings who receive a single bundle payment for all services provided to a specific patient).   These payment plans will be based on treatment for a specific diagnosis, care episode, or population.  In order to participate in this model, a provider must receive at least 25% of Medicare payments or see at least 20% of Medicare patients under this model.  The first incentive payments of 5% will be made in 2019, and this percentage may increase in future years.

The collection of performance data officially started on January 1st, but providers are allowed a grace period this year and can choose to start any time prior to October 2nd.  They are required to submit data by the end of March, 2018, and will begin to see changes to their reimbursement rates in January of 2019.

In thinking about the relationship between payment rates and health outcomes, concern may arise that providers may be less willing to care for complex, high risk patients. Medicare is attempting to address these concerns with new policies which provide more lucrative payments for services such as chronic care management, assessment of cognitive impairment, indirect patient care (such as consulting with specialists, review of medical records, or speaking with the caregiver of a patient), and collaboration with behavioral health specialists.  In addition, the APM of the quality payment program provides incentives for providers to assume risk with regard to the type of patients they treat.

Will you notice a difference in the care you receive when you visit a health care provider? That remains to be seen. As with any new system, there will be varying opinions, adjustment to the change in status quo, and kinks to resolve.  Hopefully, this new system will encourage improved provider-patient and provider-provider communication, ease transitions between levels and types of care, promote more informed decision-making by patients, and reduce costs by streamlining services.  But ultimately, when considering your own health, no amount of system overhaul can replace personal responsibility.

Karen Kaslow, RN