Thoughts on this CMS payment model and its impact on independent physicians

The Medicare and CHIP Reconciliation Act of 2015 is a new set of regulations put in place by CMS to reform the Medicare payment model, further shifting reimbursements from a traditional quantity-based payment model to a value based, or Quality Payment Program. Proposed rules were released earlier this year with a program start date of January 01, 2017.

According to the Centers for Medicare and Medicaid Services (CMS), MACRA was enacted in 2015 to make three important changes to the Medicare payment model:

  1. Ending the Sustainable Growth Rate (SGR) formula for determining Medicare payments to providers.
  2. Creating a new framework to reward health care providers for providing better care not just more care.
  3. Combining existing quality programs into one new system.

MACRA will move the healthcare system closer to CMS’ goal of tying 50% of Medicare reimbursements to alternative payment models by 2018 and essentially eliminates fee-for-service reimbursement as we know it by 2021.

Although this shift represents a first step to a fresh start for a better, smarter Medicare that fosters healthier patients and a sustainable ecosystem, it will have significant and long-reaching impact on independent providers. To be reimbursed under MACRA, physicians must choose one of two paths linking payments to quality. Physicians may either participate in a Merit Based Incentive Payment System (MIPS) or be part of an Advanced Alternative Payment Model (APM), like an ACO.

MIPS combines parts of existing CMS quality programs including the Physician Quality Reporting System (PQRS), the Value Modifier (VM) and the Medicare Electronic Health Record (EHR) program to create one single program under which eligible providers will be measured on:

  • Quality
  • Resource Use
  • Clinical practice improvement
  • Meaningful use of EHR technology

Many experts feel that MIPS represents a credible threat to independent providers, likening it to the Wild West. Smaller providers and health networks, in particular, will be heavily impacted as they struggle to fend for themselves in an unpredictable, and potentially inhospitable, environment.

Raising the stakes even further, the final rules are due in November, 2016, leaving providers with just two months to familiarize themselves and make necessary preparations before the program takes effect on January 01, 2017. Many healthcare leaders are lobbying for a start date of July 01, 2017 or later, but the final decision rests with CMS.

Regardless of start date, some analysts predict that as many as 87 percent of smaller practices could face penalties and loss of income under MACRA.

Most practices will not have the time or the technical and managerial resources needed to navigate changes on their own. As such, independent physicians’ longevity and success will depend on their alignment choices now more than ever.

By engaging reputable Healthcare Management Companies or joining stable Independent Practice Associations (IPAs) providers can maintain their independence while also accessing the larger group resources, expertise, technology and programs they need to adapt and prosper in this shifting healthcare landscape. Providers should look for organizations with a proven track record of supporting independent practice success as well as established technology and quality-driven programs.

For over 25 years, MedPOINT Management, Inc., has been helping providers thrive during unprecedented healthcare reform. Email us at to learn more about how we can support your practice during times of reform.