Two payment tracks replace several reporting programs
The Centers for Medicare and Medicaid Services recently described changes to the way it will implement new health care payment models. Acting Administrator Andy Slavitt published a policy update in response to concerns about the Medicare Access and CHIP Reauthorization Act of 2015. The law changes how the federal government reimburses health care providers and creates two reimbursement tracks beginning in the 2019 calendar year.
The main track is the Merit-Based Incentive Payment System, or MIPS. Providers in MIPS continue to receive traditional fee-for-service payments. Those payments may increase or decrease based on physician performance measures and reported data.
MIPS combines and replaces three older federal reporting initiatives: the Physician Quality Reporting System, the Meaningful Use Program, and the Value-based Modifier Program.
The other track involves participation in an Advanced Alternative Payment Model. Highly structured Accountable Care Organizations are examples of these models. Physicians who qualify for this track receive their standard fee-for-service reimbursement and do not have to meet the MIPS reporting requirements or face its potential penalties.
Why the initial reporting period created pressure
The financial adjustments do not begin until 2019, but the government bases them on earlier performance data. Under the original plan, data collected beginning January 1, 2017, would be used to calculate later payment rates.
That schedule caused concern among small medical practices and rural providers. Many independent physicians said they did not have the technology or staff required to meet the reporting deadline. The issue involved more than selecting a payment track. Practices also needed processes for collecting and submitting the information that would determine future payment adjustments.
Federal regulators responded with a temporary approach for providers in MIPS. Slavitt described three reporting options for the first year. The options leave the reporting system in place, but give practices control over how much data they submit as they develop or update their internal systems.
Three ways to report under MIPS
The first option allows a physician to submit only part of the required MIPS performance data. A provider who chooses this option will not qualify for an upward performance bonus. The provider can avoid the negative payment adjustment that could apply to a practice that fails to comply.
The second option applies to practices that are ready to report but need additional time to put their systems into operation. Physicians may submit all required MIPS data for a period shorter than a full calendar year. Providers using this option remain eligible for a smaller, prorated performance bonus.
The third option is for practices that already have data systems capable of handling the requirements. These providers may submit every required MIPS measure for the full 2017 calendar year. Full-year reporting makes them eligible for the maximum available bonus based on their final performance scores.
The options set different reporting requirements. A practice may submit limited data and avoid a negative adjustment. It may report for part of the year and retain the possibility of a smaller bonus. It may also report for the entire year and seek the maximum bonus.
Strict eligibility limits the alternative track
Providers have another way to meet the federal requirements by formally joining an Advanced Alternative Payment Model. Physicians who qualify avoid the MIPS reporting requirements and potential penalties, but the eligibility standard is narrow.
Estimates put the share of physicians who would not qualify for the advanced track in 2017 at as much as 90 percent. The statutory requirement calls for an advanced payment model to carry a specified degree of downside financial risk. Participating providers must be responsible for monetary losses when patient care costs exceed predetermined benchmarks.
That condition excludes many existing care coordination models. Providers in Track 1 of the Medicare Shared Savings Program do not qualify because that track does not include the required downside financial risk. Providers in Tracks 2 and 3 do carry that risk and therefore meet the applicable standard.
Eligibility rules can determine whether a payment option is available to a particular provider in practice. The same issue can arise with drug coverage. A plan may list a GLP-1 on its formulary but deny a request that fails to meet its documentation and prior authorization requirements. For the criteria plans actually apply, see the guide to GLP-1 coverage with insurance.