Thanks to factors such as advocacy, the IRIS registry, and allowing physicians to choose between two reimbursement plans, penalties have been reduced in the shift from volume-to-value based payments.
Reviewed by Jessica Peterson, MD, MPH
About a decade ago, Congress and the Centers for Medicare and Medicaid Services (CMS) began to nudge physicians toward a payment model that rates value over volume—but in the process often seems to shift emphasis from patient care to burdensome reporting requirements.
The most recent significant change along the road from value to volume came in the form of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which repealed the sustainable growth rate formula—widely considered to be flawed—and is moving the medical profession further into the new payment approach, said Jessica Peterson, MD, MPH, the American Academy of Ophthalmology (AAO) manager of quality and HIT policy, Health Policy Department, Washington, DC.
Tracing the history of this paradigm shift in Medicare payments, Dr. Peterson cited findings from the 2017 Medicare Trustees Report projecting that the Supplementary Medical Insurance Fund, from which physician services are paid, will grow from 3.6% of gross domestic product today to 5.6% in 2040, while the Hospital Insurance Fund will be insolvent by 2029.
“There has been this feeling of urgency by policymakers, in CMS, in Health and Human Services, that we really need to do something before we don’t have any money to take care of our elderly,” Dr. Peterson said.
The traditional fee-for-service reimbursement model ran into trouble with Congress and CMS over the perception that it had built-in incentives for physicians to focus on volume of services and thus was unsustainable, Dr. Peterson said.
This conclusion set in motion the effort to both lower healthcare costs and improve patient outcomes through value-based care programs.
Medicine, including the AAO, worked with CMS over the past decade to make sure the design and implementation of new quality and value-based models happened in “baby steps,” Dr. Peterson said.
Their efforts succeeded in making the physician quality reporting system (PQRS) launched in 2007 voluntary at first before it switched to mandatory reporting with a bonus/penalty system in 2012.
The next big step on the path to a value-based payment model was linking quality to value. A provision in the Affordable Care Act mandated a value-based payment modifier applicable to Medicare fee for service payments starting in 2015; this was phased in by practice size and applied to all physicians effective in 2017. On the positive size, advocacy by the academy and other medical organizations resulted in lowering of the 2018 penalties from a proposed maximum of 4% to a reduced 2% penalty (1% for small practices), Dr. Peterson said.