Reimbursement

reimbursement hub home

SGR Out; Value In

1
Select your area of interest
2
Contact details

We are always interested in engaging with you.

Let us know how we can help.

1
2
Contact details

May 3, 2016

 

The traditional way of updating Medicare payment rates for physicians—called the Sustainable Growth Rate formula, or SGR—will soon be history, replaced by a system that links payment updates to the value and quality of care physicians provide Medicare patients. The Centers for Medicare & Medicaid Services (CMS) recently proposed the change as a result of the 2015 law that repealed the SGR formula, which had often resulted in proposals for deep payment cuts that Congress routinely overturned.

 

In its place, CMS is proposing a two-part payment update program that is intended to reward physicians based on value rather than volume. Physicians can select either of the following:

 

  • Merit-based Incentive Payment System (MIPS): This system would consolidate and streamline the current Medicare quality and value-based payment programs for physicians, including value-based purchasing and the Medicare Electronic Health Record Incentive program. It would allow physicians to select from a variety of quality and performance measures they believe are most appropriate for the type of care they provide. Using these measures, CMS would then judge performance in four overall categories: cost, quality, clinical practice improvement, and use of EHR technology. Physicians would receive positive, negative, or neutral adjustments in their payment levels. In the first year, the adjustments would be limited to 4%, either up or down. In later years, this would grow to 9%. CMS would begin measuring physician performance in 2017, with payment adjustments beginning in 2019.
  • Advanced Alternative Payment Models (APMs): Instead of participating in MIPS, physicians can choose to participate in Advanced Alternative Payment models and qualify for a 5% annual incentive payment, which would begin in 2019. These models include patient-centered medical homes that have been expanded under Medicare, including the recently proposed Comprehensive Primary Care Plus (CPC+) program. They also include those Medicare accountable care organizations that accept both financial risk and reward for providing coordinated, high-quality, and efficient care. These include the Track 2 and Track 3 Shared Savings ACOs and Next Generation ACOs.

 

The proposed regulations are open for comment until June 27, 2016. See Medicare fact sheet on the proposals.

Our site can best be viewed with the latest version of Microsoft Edge, Google Chrome or Firefox.