Medicare Physician Compensation

‘Doc fix’ fixed?

This may be the case.  Fox News reports:

The Senate overwhelmingly passed legislation permanently overhauling how Medicare pays physicians late Tuesday in a rare show of near-unanimity from Congress.

The legislation headed off a 21 percent cut in doctors’ Medicare fees that would have taken effect Wednesday, when the government planned to begin processing physicians’ claims reflecting that reduction. The bill also provides billions of extra dollars for health care programs for children and low-income families, including additional money for community health centers.

Although changing the legislation to correct for physician payment reductions that would have little chance of actually coming to fruition, according to Vox the cost of the doc fix is $141 billion over the next decade. The bill also includes other payment reforms:

  • Merit-Based Incentive Payment System (MIPS). This programs rolls three other older incentive programs into one larger one that gives doctors a quality score. If their scores are really great, doctors’ reimbursement rates will go up.
  • Alternative Payment Model. These are typically payment arrangements that require a whole group of doctors to band together and take a lump sum of money to care for a certain group of patients. If they can provide the care for less — and hit certain quality metrics — they get to keep some of the leftover cash. The hope is that these models will force doctors to be vigilant against wasteful care, since doctors have a financial incentive to spend less than their lump sum amount.

As I reported earlier, CMS aims to tie about 30% of provider reimbursement to value-based payments. This reform may just be the tip of the iceberg.

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