« Government Hears Fro... | Main | Telehealth Is Family... »

Wednesday Dec 23, 2015

End of Medicare Bonuses Underlines Need for New Payment Models

More than just the calendar year will end on Dec. 31. The New Year also will mark the end of the Primary Care Incentive Program (PCIP).

The PCIP, created in 2010 as part of the Patient Protection and Affordable Care Act, pays family physicians and other primary care providers bonuses equal to 10 percent of the amount Medicare paid them for primary care services if they met certain conditions. This bonus was an overdue step toward recognizing the value of primary care.

The program paid $664 million to primary care practices in 2012, but how much it will be missed depends somewhat on whom you ask. A survey of primary care physicians found that half were unaware of the program's existence.(kaiserfamilyfoundation.files.wordpress.com) Some physicians "boutique" their practices, limiting their number of Medicare patients. But many practices in rural and underserved areas can't do this, and they benefited greatly from the bonus payments. Practices with large Medicare panels certainly will feel the hit. Qualifying primary care physicians received an average of nearly $4,000 a year.

Although the AAFP and other primary care advocates fought for an extension of the program, Congress showed little interest in prolonging a bonus program based on the fee-for-service model. As we have seen in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) -- the law passed earlier this year that repealed the flawed Medicare sustainable growth rate formula -- legislators are more interested in linking increased physician payments to certain quality and performance standards.

If you haven't already, I strongly encourage you to start making yourself familiar with the alternative payment models and the merit-based incentive payment system (MIPS) described in the new law. By 2019, all physicians participating in Medicare will fall into one category or the other.

MIPS, while attempting to promote quality and added value, still is based on fee-for-service. And as we have seen, that model continues to be a popular target for spending cuts. A multi-year federal budget agreement led to a 2 percent cut to Medicare payments in 2013 and further incremental reductions for several years, and Congress allowed the Medicaid parity program -- a provision of the ACA that raised Medicaid physician payments in line with Medicare -- to expire in December 2014.

The 2016 physician fee schedule called for a modest 0.5 percent increase in the physician payment conversion rate. However, other legal mandates made even that minimal increase too tall a task for CMS because it failed to identify and adjust a required percentage of overvalued CPT codes. As a result, the Medicare physician fee schedule will see a fractional decrease in the conversion factor in 2016, rather than a half-percent increase.

What it boils down to is that alternative payment models are the path forward that will provide stability and give our practices the greatest opportunity to thrive. One-third of family physicians already are pursuing value-based payments.

The AAFP recently submitted detailed responses to 126 questions as part of a CMS request for information on how to implement new payment models associated with MACRA. Early in 2016, the Academy will be rolling out materials that will help family physicians better understand the choices, deadlines and challenges that MACRA presents. Stay tuned.

Robert Wergin, M.D., is Board Chair of the AAFP.

Posted at 01:51PM Dec 23, 2015 by Robert Wergin, M.D.

« Government Hears Fro... | Main | Telehealth Is Family... »

SIGN UP


Subscribe to receive e-mail notifications when the blog is updated.

FEEDS

OUR OTHER AAFP NEWS BLOG

Fresh Perspectives - New Docs in Practice

DISCLAIMER

The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.