Analysis : Merit-Based Incentive Payment System

Pay-for-performance payment model – healthcare payment systems that offer financial rewards to providers who achieve, improve or excel their performance on specified quality of care and cost measures (HealthCare Incentives Improvement Institute, N.D.)

First implemented in 1985 by Aetna (previously U.S. Healthcare), P4P programs were used to reward top performers and improve outcomes (Bruno, 2012). The incentives were meant to improve the quality of patient care by basing incentives on patient outcomes. Conversely, fee-for-service reimbursements are based on the treatments and set limits on the amount reimbursed for services. Because of these limits, incentives for use of pharmaceuticals and non-invasive procedures can impact how physicians practice.

A mixed payment system combined with physician monitoring, will provide physicians with incentives to consider costs and benefits of different treatment options, which will lead to an efficient level and quality of care. (1,2)

With enactment of the Medicare Modernization Act (MMA) in 2003, Medicare began moving toward value-based payments, and the introduction of Affordable Care Act (ACA) in 2010 meant that Medicare accelerated its use of value-based payments as a means of improving outcomes and managing overall costs (Wofford, 2015).

Now a statute, the physician/hospital pay for quality, not quantity, public law number: 114-10 signed April 16, 2015 also referenced as H.R.2 —1st Session of 114th Congress (2015-2016), sometimes called the “Permanent Doc Fix” 04/14/2015 : Passed Senate; 03/26/2015 : Passed House (Medicare Access and CHIP Reauthorization Act of 2015, 2015), which defines the payment and reimbursement reform to doctors treating patients with Medicare. This extensive reform includes the CHIP program insuring children and those families that don’t qualify for Medicare but are unable to afford private insurance and is funded by the federal government and individual states.

As a consequence of such far reaching scope, doctors don't need to gather out-of-pocket installments specifically from patients and will rather get them as repayments from wellbeing arranges. Because of the ACA's individual command and development of secured administrations, doctors can hope to see an ascent in their repayments because of a more noteworthy flood of patients, particularly those of the more youthful era, searching them out for their

This was placed to be presented at the Federal Register on July 7, 2016. It updates payment policies, payment rates, and other requirements for healthcare services provided under the Medicare Physician Fee Schedule (PFS) on or after Jan. 1, 2017. It is one of the several proposed rules that present a broader Administration

The final score can rank between 0 and 70. For example, zero points result in a 4 percent deduction, 3 points result in no payment adjustment, between 4 and 69 points result in a small positive payment adjustment and 70 or more results in a modest positive payment adjustment and a performance bonus (Hayden and Coffin, 2017). Therefore, this educational program will explain how to accumulate points and the exact math behind it, as well as what quality measures are needed by the administrators in order to give their physicians the highest reward. The program will also explain to the administrators what quality measures they should report on in order to give their physicians the greatest amount of points. For example, if our group has a high Adenoma Detection Rate then our administrator should report it as one of our 6 measures. Consequently, the greater score our facility receives, the higher the reimbursement will be, as well as the possibility of receiving a bonus.

Medicare has started to make adjustment related to productivity in payments of hospital in fiscal year 2012.

The imposed cuts to Medicare’s fees schedule for physicians, known as Medicare Sustainable Growth Rate (SGR) formula, were permanently ended as part of new legislation called the Medicare Access and CHIP Reauthorization Act of 201, aka the “doc fix” bill, was signed on April 16, 2015. The new bill would replace the current reimbursement schedule with a five year plan to provide automatic pay increases to physicians. The focus of the new payment system is value, accountability and quality and would become a Merit-Based Payment Incentive System (MIPS). A physician’s assessment for reimbursement would be based on four core metrics; quality, clinical practice improvements, resource use, and meaningful use of EHR. The lowest performing physicians would have their reimbursements cut by nine percent. (Wynne, 2015)

MIPS is intended to measure the performance of Medicare Part B providers in four different performance areas (30% by VBM-measured resource use (claims data), 30% by VBM-measured quality (PQRS data), 25% by Meaningful Use (EHR data), and 15% by a newly introduced “clinical practice improvement” measure). Providers will then be given a score between 0 and 100. These scores will impact practices in a couple of different ways:

The ebb and flow in the healthcare industry regarding payment systems and arrangements for practicing physicians has been especially pronounced in the last twenty years. With the constant rise in

As Vladeck stated in his article, Medicare accounts for as much as 40 percent of the income of the average U.S. hospital. The reason for this is that Medicare makes payments to providers of services, not directly to beneficiaries. Physicians who provide care to Medicare patients have to decide whether or not to accept the Medicare allowable fee as payment in full for the services provided. To get the bills paid for the services provided, physicians often use balance billing. Using balance billing, physicians bill a patient for the difference between the physician’s usual charge for a service and the maximum charge allowed by the patient’s health plan. However, physicians complain that the Medicare allowable fee is below their average cost of providing medical services, so a common practice is cost shifting to private patients. A part of the income for the hospitals, especially teaching hospitals, is the prospective payment system (PPS). This kind of payment is determined prior to the provision of services. It is a

Ex. Setting a benchmark of 100 percent and if it is exceeded the provider will end up being penalized. Reason being is to cut down on overpayments and retain high quality and low-cost payment for individuals who have Medicare.

The truth is that when CMS Acting Administrator Slavitt made his announcement, he channeled the ghost of Mark Twain, who famously said that "the reports of my death is greatly exaggerated." Sure enough, Mr. Slavitt, in the CMS blog a week later, did a complete one-eighty and took back his words. Unfortunately, MU remains alive and well which means that if left as is, the penalty for not meeting MU stage 3 (MU3) will be catastrophic to many family medicine practices. Even though MIPS won 't kick into high gear until 2019, with up to 4 percent penalty and higher in subsequent years, for all intents and purposes, these practices will need to meet these requirements by the end of 2017 since data reporting will be mandatory for all providers in 2018. For low-margin family medicine practices, essentially what Mr. Slavitt had done was to subtitle the MU3 final rules with Alan