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CMS Releases Final Rule on Controversial New Payment Program for Physicians

For your convenience:

MACRA = Medicare Access and CHIP Reauthorization Act

QPP = Quality Payment Program

APMs = Alternative Models

MIPS = Merit-based Incentive Payment System



CMS has issued the much-anticipated final rule to implement the controversial Medicare Access and CHIP Reauthorization Act of 2015. MACRA replaced the sustainable growth rate formula for Medicare physician payments, redirecting the focus to a quality and value-oriented approach.


The Quality Payment Program was introduced in the proposed rule in April; it garnered thousands of public comments. (“CMS Issues Final Rule on New Medicare Payment Program for Physicians, AHLA Weekly, October 14, 2016)


Last month, CMS announced that under the QPP, physicians would be able to “pick their pace of participation” during the transition from a fee-for-service system to alternative payment models (APMs) that reward quality, not quantity, of services.


2017 is a transition year for the new program. During this time, clinicians will have four options for participating in the QPP—three flexible options for submitting data to MIPS and a fourth to join Advanced APMs. The options are outlined below:


  • Remaining on the fee-for-service path subject to the Merit-based Incentive Payment System (MIPS), which consolidates the three existing programs:
  1. Physician Quality Reporting System
  2. Physician Value-based Payment Modifier
  3. Medicare Electronic Health Record Incentive Program for Eligible Professionals,
  • Participating in Advanced APMs, with the potential for bonuses and higher updates. APMs can apply to a specific clinical condition, a care episode, or a population.

(Quality Payment Program Executive Summary, Department of Health and Human Services, October 14, 2016)


CMS noted that 2018 may also be “transitional in nature to provide a ramp-up of the program and of the performance thresholds.” CMS plans to propose the parameters of the second transition year in rulemaking next year. (“CMS Issues Final Rule on New Medicare Payment Program for Physicians,” AHLA Weekly, October 14, 2016)



To review an executive summary of the final rule, click here.


To review a copy of the final rule and other agency fact sheets, click here.



Other Items of Note


Hospital Readmissions Reductions Program


The Healthcare Financial Management Association reported that new research “challenges the fairness and accuracy of the government’s quality measures and penalties for exceeding hospital readmissions standards and suggest changes are warranted.”


Researchers noted that although the readmission program was based on an assumption that hospitals should be responsible for post-discharge care coordination, there actually is no empirical evidence that supports the use of a 30-day readmission interval for assessing “hospital-modifiable” quality. They said it’s not clear whether hospitals can practicably affect care for such a long period after discharge.


Others have noted, “hospital care determines outcomes only within a week or two of discharge. After that period, health outcomes reflect other aspects of patient lives.”


Commercial ACOs


New research shows that accountable care organizations (ACOs) operated through commercial insurers are “considerably leaner” organizations than their Medicare and Medicaid counterparts. However, all types of ACOs have far to go in critical areas such as restructuring physician compensation and tracking financial performance.



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For more information about iProtean, now part of Veralon, click here.