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Medicare to Unveil Overhauled Requirements for Doctor Pay Soon

By Kerry Young, CQ Roll Call

March 17, 2016 -- Medicare within months will unveil its draft proposal for carrying out a major overhaul of its payments for physicians, with agency officials on the hook to make myriad decisions about judging the quality of service provided to the nation’s elderly and disabled.

Patrick Conway, the chief medical officer for the Centers for Medicare and Medicaid Services (CMS), on Thursday told a House Energy and Commerce panel that the draft will be released this spring. Doctors and others with an interest in Medicare policy will then have 60 days to comment on the rule. Medicare spent $69.2 billion in 2014 for the services of about 576,000 physicians and 315,000 nurse practitioners, physician assistants, therapists, chiropractors, and other professionals, according to a recent report from the Medicare Payment Advisory Commission.

The CMS rule will be a key tool for carrying out the payment changes mandated by last year’s overhaul (PL 114-10) of physician reimbursements, considered one of the most significant recent federal health laws. The measure stopped what had been a near Sisyphean task for Congress every year of overriding a previous budget law’s mandate for cuts in physician pay through a series of often hastily passed "doc fix" bills that held at bay payment reductions.

"It is a little bit surreal to be here discussing the implementation of this Medicare provider payment reform," Rep. Michael C. Burgess, R-Texas, a doctor, said at the hearing. "So many times we were here worried about how we were going to keep the dire wolf away from the door for yet one more time, to stop a substantial double-digit cut."

Burgess and other lawmakers on the Energy and Commerce Health Subcommittee told Conway that they will watch closely as his agency brings forward the new payment system. Because the draft is not yet public, there was little cause for argument between the lawmakers and Conway at the hearing.

Medicare in recent years already had begun to tie some quality measure to payments for doctors in its traditional fee-for-service system. The stakes tied to judgments made via quality measures rise under the new payment framework created by Congress.

The new framework, known as a merit-based incentive payment system, takes effect in 2019. Physicians will see their Medicare reimbursement rise or fall based on how well they score in the new system. Cuts are generally limited to 4 percent in 2019, rising to 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022. Doctors also have the option of working with Medicare outside of the MIPS program by participating in alternative payment models such as accountable care organizations. These programs already seek to tie reimbursement to judgments about quality.

At the hearing, Conway reminded lawmakers the agency already has met a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to alternative payment models, a level that it earlier expected to reach later in the year.

Not all doctors are enthusiastic converts to alternative payment systems. The overhaul of Medicare payments will be highly disruptive, Burgess said. Many physicians would prefer having fewer demands attached to their Medicare reimbursement. Burgess said many of his fellow doctors are nervous about how the changes will affect them, and prefer they not take place. Still, he conceded a broad shift in attitude about what Medicare can demand in return for its payments.

"If I had been able to do this the way I would have wanted, I would have simply directed CMS to pay whatever bills come in over the transom and stop bothering everybody," Burgess said of the reimbursement overhaul at the hearing. "We all know that wasn’t a realistic approach."

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