The decade-long political saga of Medicare physician pay increases is finally over! For those familiar with the Sustainable Growth Rate (SGR) formula debates, we know for years now physicians and Medicare Advantage (MA) plans were often on the edge of their seat to see if physician pay, and therefore MA rates, would take a hit if Congress did not suspend payment reductions year by year and infuse the Medicare system with temporary cash. But in 2015, Congress finally did the right thing and scrapped the old system in favor of a quality based reimbursement system – in a bipartisan move no less!
Now the system will not be without its detractors and political meddling we are sure. The SGR system, where doctor payments were supposed to live within a set growth rate each year or doctors would face rate reductions, was never really implemented given the congressional actions and promoted the inefficient transaction-based system.
The new system is much like the Medicare Advantage plan quality bonuses. Doctors now will be rated based on performance indicators and their pay tied to quality outcomes and efficiency. The rating starts in 2017 and the results impact 2019 payments. They will apply to doctors not in larger Fee-For-Service (FFS) reforms, such as Accountable Care Organizations (ACO). The new program builds on reporting programs already in place. The measures start slowly and should become more rigorous over time.
With the traditional Medicare FFS system likely to live long into the future, it is the type of medicine that is needed. It, like some of the FFS reforms in ACA, should be cultivated not chopped. The doctor pay will promote use of primary care and preventive services. It should also enhance care management in the FFS system.
Doctors who don’t join alternative payment reforms or refuse to submit quality measures face a 4 percent reduction in their payments. Good providers could see their pay increased by 4 percent. These bonuses increase over time to as much as 9 percent in 2022 and later. Those who join other reforms should see 5 percent increases.
No doubt the proposal will need to be tweaked over time as the details come in. Detractors fear that the sickest populations could be hurt because doctors will be reticent to take on hard-to-impact populations. But there are ways to account for this, much as has been done in the Star program for Special Needs Plans and those with a concentration of dual eligibles.