Understanding physician payment for 2018

Nov. 1, 2017 was a key date for nephrologists and the general physician community. The 2018 Medicare Quality Payment Program was released. The news was mixed for nephrologists who hoped to escape Medicare’s regulatory reach on how they practice medicine. Here are some of the details.

Basic intent

The 2018 Medicare Quality Payment Program (QPP) was previously called the Medicare Access and CHIP Reauthorization Act (MACRA). It was approved by Congress in 2015 with the basic intent to:

repeal the sustainable growth rate formula used to determine the level of Medicare payment for physicians each year;

change the way Medicare rewards clinicians, from a fee-for-service, volume-based system to one that supports value of care provided;

streamline multiple quality programs under the new Merit-based Incentive Payments System (MIPS); and

give bonus payments for participation in eligible alternative payment models (APMs).

For nephrologists, APMs can include participation in the ESRD Seamless Care Organizations (ESCOs) that a number of practice groups and dialysis providers have put together as part of CMS’ Comprehensive ESRD Care Model demonstration. The 5-year program requires that a nephrologist and a dialysis provider be in control of the management of a kidney patient’s care. The first year was deemed a success, with $72 million in shared savings for both the ESCOs and the Medicare program.

Twists and turns

While the goals of the QPP may be clear, the process has some twists and turns in the regulatory road, as Terry Ketchersid, MD, MBA, noted in a recent blog for Acumen Physician Solutions.

“There are literally dozens of nuances, most aimed at making the QPP ‘easier’ for eligible clinicians,” he wrote in the blog.

The 2018 final rule narrows the field for physicians in general. The low-volume threshold exclusion has been increased to 200 patients or $90,000 of Part B expenditures in 2018.

“If you are an eligible clinician that encounters fewer than 200 Medicare beneficiaries during the year, or your annual part B claims fall short of $90,000, you are excluded from the [MIPS],” Ketchersid, who is the chief medical officer for the Integrated Care Group at Fresenius Medical Care North America, wrote. “This one is worth your attention if you employ advanced practitioners.”

However, Ketchersid said this is bad news for nephrologists because MIPS is a budget-neutral program.

“It’s a zero-sum game in which participants compete across the breadth of medicine. Few nephrologists will be exempt due to low volume,” Ketchersid wrote, “and those in MIPS will now face a more competitive pool of MIPS providers – one that is likely dominated by large practices.”

Push toward integrated care

With a push toward integrated care, including legislative proposals in Congress to accelerate placement of control of these integrated care models to health care providers, it would put the squeeze on small practices that may be left in the cold.

Ketchersid said there is good news for small physician practices. The benefits, he noted, include five MIPS points for practicing in a group with 15 or fewer providers, including advanced practitioners, and Medicare raising the low-volume threshold.

Cost category

Similar to the Comprehensive ESRD Care Model demonstration, in which CMS did not tie payment to scores on quality measures in the first year, MIPS gave physicians a break on cost of care in 2017. Not so for 2018, where the cost category will make up 10% of a physician’s final MIPS score, which increases to 30% in 2019, Ketchersid noted in his blog.

“Per the final rule, CMS will score the Medicare spending per beneficiary and the total per capita cost measure in 2018. These are two of the original cost components within the recently retired Physician Value-based Payment Modifier,” Ketchersid wrote. “Thankfully, they are not going to score the episode-based measures they originally planned to count in the cost score. As a reminder, there are no data reporting requirements for the cost category of MIPS. This information is harvested by CMS from administrative claims data.”

Tracking

As 2017 was a transition year, CMS was still tracking physician performance.

“It took little work this past year to avoid the 4% MIPS haircut in 2019,” Ketchersid wrote. “If you obtain 3 points from any of the MIPS categories this past year, then you will not incur a penalty in 2019.” However, the risks for physicians are higher in 2018.

“The work you do within MIPS will impact your 2020 Medicare fee schedule. It will be a little more difficult to avoid the 5% maximum MIPS penalty in 2020,” Ketchersid noted. “To avoid the penalty, you must accumulate at least 15 points across the four MIPS categories that are scored in 2018. On a positive note, the potential upside for 2020 rises to at least 5% for those who outperform the nation in MIPS.”

Ketchersid noted little change in the final rule that will affect the Advanced Alternative Payment Models (AAPM) track. He said the expectation of CMS is such that “the number of qualifying participants in an advanced APM would increase to between 185,000 to 250,000 eligible clinicians in 2018.”

“Recall these individuals are excluded from MIPS and will collect the 5% AAPM bonus in 2020. The AAPM that is most relevant to nephrologists is the ESCO,” he wrote. -by Mark E. Neumann

References:

https://acumenmd.com/blog/qpp-2018-the-final-rule-arrives

www.cms.gov/Medicare/Quality-Payment-Program/Resource-Library/QPP-Year-2-Executive-Summary.pdf

www.cms.gov/Medicare/Quality-Payment-Program/Resource-Library/QPP-Year-2-Final-Rule-Fact-Sheet.pdf

For more information:

Terry Ketchersid, MD, MBA, is the chief medical officer for the Integrated Care Group, Fresenius Medical Care North America, based in Waltham, Massachusetts. Disclosure: Ketchersid reports no relevant finanical disclosures.