Medicare What's Buzzing

Traditional Medicare is changing

Written by Diane Archer

The New York Times reports that Medicare has finalized a new rule under which traditional Medicare is changing its provider payment system. The goal is to improve care for patients while reducing costs. Instead of paying doctors exclusively based on the number of services they perform, the “fee-for-service” model, traditional Medicare will adjust its payments based on what it deems to be the quality of care patients receive.

MACRA, the Medicare Access and CHIP Reauthorization Act, signed into law by President Obama in 2015–with support from Congressman John Boehner and Congresswoman Nancy Pelosi–offers two new provider payment models, the Alternative Payment Model and the Merit-Based Incentive Payment System. For now, doctors will be able to choose between the models. Each model is supposed to reward doctors based on the quality of care they deliver and the savings they deliver to the health care system.

But, there’s a lot of skepticism about how well these models can possibly work. The Health Care Blog’s Kip Sullivan makes a compelling argument that “measuring cost and quality accurately at the individual doctor level is not possible.” Sometimes results are outside the doctor’s control and other times it’s impossible to attribute a good or bad outcome to a particular doctor when multiple doctors are involved. Sullivan calls MACRA “an unworkable mess.”

How will the Centers for Medicare and Medicaid Services attribute a fair rating to the cost and quality of services of a particular doctor?What if patients have multiple chronic conditions that make it hard to treat their illness? Will doctors avoid them so as not to hurt their ratings?  Notwithstanding the challenges of answering these questions in a fair manner, change is afoot.

Medicare expects that as many as 120,000 doctors will accept the Alternative Payment Model that requires them to be part of an Accountable Care Organization (ACO) or other health care group rewarded financially for keeping people healthy. These doctors can benefit from cost savings if their patients have good health outcomes. It also requires the doctors to report quality measures and use electronic medical records. It’s worth noting here that ACOs to date are at best saving a tiny amount of money and have mixed quality results.

Up to 640,000 doctors are expected to participate in the Merit-Based Incentive Payment System. They will not take as much risk as doctors who participate in the Alternative Payment System. But, they will also be rewarded financially based on their performance and will be accountable for the quality of care they provide.

Another 380,000 or so doctors will not participate in these new payment systems because they see too few Medicare patients. The CMS chief said that about half of doctors in small practices, with fewer than 10 doctors, will not participate.

Here’s more from Just Care:



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