May 9, 2015

2 good signs: Momentum building & mechanisms appearing

You’ll be pleased to hear about two developments that are good signs for the transition away from the fee for service payment model in healthcare and towards payment for outcomes.  Buy-in among healthcare CEOs is clearly growing, and Congress just passed MACRA — a new law will increase the mechanisms available to support value-based healthcare reimbursement, particularly for physicians. See below for more details on these two developments.

But first:  If you believe that a FUNDAMENTAL purpose of healthcare services is to enable people to participate as fully as possible in life –which for most working age people includes earning a living — then ability to function & work should be on the list of accountable health outcomes.  Thus, it is CRITICAL to ensure that SOMEONE is sitting at the table advocating for those outcomes — when the nitty-gritty details of the new mechanisms called for in MACRA are worked out!  As you read on, consider what you can do to increase the likelihood that someone IS sitting there.

First, a recent survey of healthcare CEO’s revealed that the VAST majority of them LIKE the idea of value-based payment – even though a substantial fraction of them predict difficulties and revenue reductions as a result.   Almost 8/10 of them said this statement best reflected their attitude:   “Value-based reimbursement models should play the dominant role in healthcare reimbursement with fee-for-service medicine playing a declining and minor role.” The CEO’s also predict that value-based reimbursement will improve quality of care (93% agree).  Overwhelmingly, they think the pace of change is NOT going too fast (91% agree).  NOTE:  Almost all of the CEO’s think we can’t throw away the existing CPT-based payment system entirely – because physicians need an incentive to work hard, and because the metrics that underlie value-based payment don’t work well when there are statistical challenges (unusual  conditions, rare events, low practice volumes, and other reasons for small numbers and high variability).

In another development, while repealing the dreaded Medicare fee cuts called for under the SGR legislation (Sustainable Growth Rate), Congress opened the door to some (potentially) HUGE changes in physician payment.   MACRA – the Medicare Access and CHIP Reauthorization Act of 2015 – lays out a general plan for changes in CMS’ physician reimbursement methods.   MACRA replaces the uncertainty about SGR and its draconian 21 percent cut to physician fees this year with tiny but predictable payment increases for the next four-and-a-half years. Then, starting in
2019, MACRA removes some irritating and burdensome penalties and gives physicians two ways to earn performance based incentive payments, either by participating in a new Merit-based Incentive Payment System or an Alternative Payment Model, like a Patient-Centered Medical Home.

Here’s how the White House blog portrayed this legislative achievement.  And here is a brief summary of the key features from the point of view of the American College of Physicians (the ACP) which also provided a more detailed discussion of the law’s provisions concerning physician payment   And here is a one page handout summarizing these provisions of MACRA prepared by ACP for its member physicians.

Lots more to come on this!

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