Gaurav Dhanda, PharmD
MediMedia Managed Markets

Gaurav Dhanda, PharmD is a Clinical Services Manager at MediMedi Managed Markets and a former community pharmacist.

A few weeks ago, the U.S. Department of Health and Human Services made a final rule on a policy that implemented incentive payment provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This rule, which takes effect January 2017, has huge potential to change the health care market.

The current system is based on a sustainable growth-rate formula which is very confusing and does not help cut costs where physicians are able to charge on a fee-for-services basis. This means that prescribers get paid more for more services that they provide. However, the services that they provide aren’t of the highest quality and cost of health care has been rising. According to the PBS newswire, the cost per person for health care is projected to exceed $10,000 per person this year. With costs increasing and quality diminishing, a change had to be made.

The final rule incorporated two different reimbursement pathways for physicians to participate in which are a merit-based incentive payment system (MIPS), and an advanced alternative payment model (APM). These new methods create incentive for physicians to provide quality care in order to receive annual bonuses and avoid penalties.  

According to CMS, under MIPS, clinicians would be paid based on performance in four categories of quality, cost, improvement activity, and “advancing care information,” which is the use of health information technology. For physicians that are included in this system, they would be eligible to receive plus or minus 4% reimbursement in 2019 and will possibly go up to 9% in 2022.

Physicians who choose to opt out of MIPS must join an APM. These APMs are based upon partnerships between clinicians who may treat a specific population or a certain condition. Physicians under APMs are excluded from MIPS reporting requirements and payment adjustments, given that they adequately take part in an APM. APMs have requirements which include the use of electronic health records, service quality measures, and others. CMS is making many changes to the scope of Accountable Care Organizations (ACOs), which are considered to be APMs. Health care professionals who are a part of an APM are qualified for a 5% incentive payment.

CMS estimates that 70,000 to 120,000 clinicians will join APMs in 2017 as well as 500,000 clinicians participating in MIPS. Clinicians do not have to start gathering data by Jan. 1, 2017, but must choose a start date between Jan. 1 and Oct. 2, 2017. Data must be sent by March 31, 2018 and the first payment adjustment will go in effect on Jan. 1, 2019.

The goal of these new pathways seems to focus on quality of care. I feel that the pressure is now on clinicians and health care groups to provide quality care, not quantity care. It may be a while until we see the effects of the ruling and if cost of health care does go down.