Elizabeth Woodcock, MBA, CPC

Physicians are bracing for upcoming changes in reimbursement that may start within a few months. As doctors gear up for another wave of COVID, payment trends may not be the top priority, but some “uh oh” announcements in the fall of 2021 could have far-reaching implications that could affect your future.

The Centers for Medicare & Medicaid Services issued a proposed rule in the summer covering key aspects of physician payment. Although the rule contained some small bright lights, the most important changes proposed were far from welcome.

Here’s what could be in store:

1. The highly anticipated Medicare Physician Fee Schedule ruling confirmed a sweeping payment cut. The drive to maintain budget neutrality forced the federal agency to reduce Medicare payments, on average, by nearly 4%. Many physicians are outraged at the proposed cut.

2. More bad news for 2022: Sequestration will be back. Sequestration is the mandatory, pesky, negative 2% adjustment on all Medicare payments. It had been put on hold and is set to return at the beginning of 2022.

Essentially, sequestration reduces what Medicare pays its providers for health services, but Medicare beneficiaries bear no responsibility for the cost difference. To prevent further debt, CMS imposes financially on hospitals, physicians, and other health care providers.

The Health Resources and Services Administration has funds remaining to reimburse for all COVID-related testing, treatment, and vaccines provided to uninsured individuals. You can apply and be reimbursed at Medicare rates for these services when COVID is the primary diagnosis (or secondary in the case of pregnancy). Patients need not be American citizens for you to get paid.

3. Down to a nail-biter: The final ruling is expected in early November. The situation smacks of earlier days when physicians clung to a precipice, waiting in anticipation for a legislative body to save them from the dreaded income plunge. Indeed, we are slipping back to the decade-long period when Congress kept coming to the rescue simply to maintain the status quo.

Many anticipate a last-minute Congressional intervention to save the day, particularly in the midst of another COVID spike. The promises of a stable reimbursement system made possible by the Medicare Access and CHIP Reauthorization Act have been far from realized, and there are signs that the payment landscape is in the midst of a fundamental transformation.

Other changes proposed in the 1,747-page ruling include:
 

Positive:

• More telehealth services will be covered by Medicare, including home visits.
• Tele–mental health services got a big boost; many restrictions were removed so that now the patient’s home is considered a permissible originating site. It also allows for audio-only (no visual required) encounters; the audio-only allowance will extend to opioid use disorder treatment services. Phone treatment is covered.
• Permanent adoption of G2252: The 11- to 20-minute virtual check-in code wasn’t just a one-time payment but will be reimbursed in perpetuity.
• Boosts in reimbursement for chronic care and principal care management codes, which range on the basis of service but indicate a commitment to pay for care coordination.
• Clarification of roles and billing opportunities for split/shared visits, which occur if a physician and advanced practice provider see the same patient on a particular day. Prepare for new coding rules to include a modifier. Previously, the rules for billing were muddled, so transparency helps guide payment opportunities.
• Delay of the appropriate use criteria for advanced imaging for 1 (more) year, a welcome postponement of the ruling that carries a significant administrative burden.
• Physician assistants will be able to bill Medicare directly, and referrals to be made to medical nutrition therapy by a nontreating physician.
• A new approach to patient cost-sharing for colorectal cancer screenings will be phased in. This area has caused problems in the past when the physician identifies a need for additional services (for example, polyp removal by a gastroenterologist during routine colonoscopy).
•  

Not positive:

• Which specialties benefit and which get zapped? The anticipated impact by specialty ranges from hits to interventional radiologists (–9%) and vascular surgeons (–8%), to increases for family practitioners, hand surgeons, endocrinologists, and geriatricians, each estimated to gain a modest 2%. (The exception is portable x-ray supplier, with an estimated increase of 10%.) All other specialties fall in between.
• The proposed conversion factor for 2022 is $33.58, a 3.75% drop from the 2021 conversion factor of $34.89.

The proposed ruling also covered the Quality Payment Program, the overarching program of which the Merit-based Incentive Payment System (MIPS) is the main track for participation. The proposal incorporates additional episode-based cost measures as well as updates to quality indicators and improvement activities.

MIPS penalties. The stakes are higher now, with 9% penalties on the table for nonparticipants. The government offers physicians the ability to officially get out of the program in 2021 because of the COVID-19 pandemic, thereby staving off the steep penalty. The option, which is available through the end of the year, requires a simple application that can be completed on behalf of the entire practice. If you want out, now is the time to find and fill out that application.

Exempt from technology requirements. If the proposal is accepted, small practices – defined by CMS as 15 eligible clinicians or fewer – won’t have to file an annual application to reweight the “promoting interoperability” portion of the program. If acknowledged, small practices will automatically be exempt from the program’s technology section. That’s a big plus, as one of the many chief complaints from small practices is the onus of meeting the technology requirements, which include a security risk analysis, bi-directional health information exchange, public health reporting, and patient access to health information. Meeting the requirements is no small feat. That will only affect future years, so be sure to apply in 2021 if applicable for your practice.

Changes in MIPS. MIPS Value Pathways (MVPs) are anticipated for 2023, with the government releasing details about proposed models for heart disease, rheumatology, joint repair, and more. The MVPs are slated to take over the traditional MIPS by 2027.

The program will shift to 30% of your score coming from the “cost” category, which is based on the government’s analysis of a physician’s claims – and, if attributed, the claims of the patients for whom you care. This area is tricky to manage, but recognize that the costs under scrutiny are the expenses paid by Medicare on behalf of its patients.

In essence, Medicare is measuring the cost of your patients as compared with your colleagues’ costs (in the form of specialty-based benchmarks). Therefore, if you’re referring, or ordering, a more costly set of diagnostic tests, assessments, or interventions than your peers, you’ll be dinged.

However, physicians are more likely this year to flat out reject participation in the federal payment program. Payouts have been paltry and dismal to date, and the buzz is that physicians just don’t consider it worth the effort. Of course, clearing the threshold (which is proposed at 70 points next year) is a must to avoid the penalty, but don’t go crazy to get a perfect score as it won’t count for much. 2022 is the final year that there are any monies for exceptional performance.

Considering that the payouts for exceptional performance have been less than 2% for several years now, it’s hard to justify dedicating resources to achieve perfection. Experts believe that even exceptional performance will only be worth pennies in bonus payments.

The fear of the stick, therefore, may be the only motivation. And that is subjective, as physicians weigh the effort required versus just taking the hit on the penalty. But the penalty is substantial, and so even without the incentive, it’s important to participate at least at the threshold.

Fewer cost-sharing waivers. While the federal government’s payment policies have a major impact on reimbursement, other forces may have broader implications. Commercial payers have rolled back cost-sharing waivers, bringing to light the significant financial responsibility that patients have for their health care in the form of deductibles, coinsurance, and so forth.

More than a third of Americans had trouble paying their health care bills before the pandemic; as patients catch up with services that were postponed or delayed because of the pandemic, this may expose challenges for you. Patients with unpaid bills translate into your financial burden.

Virtual-first health plans. Patients may be seeking alternatives to avoid the frustrating cycle of unpaid medical bills. This may be a factor propelling another trend: Lower-cost virtual-first health plans such as Alignment Health have taken hold in the market. As the name implies, insurance coverage features telehealth that extends to in-person services if necessary.

These disruptors may have their hands at least somewhat tied, however. The market may not be able to fully embrace telemedicine until state licensure is addressed. Despite the federal regulatory relaxations, states still control the distribution of medical care through licensure requirements. Many are rolling back their pandemic-based emergency orders and only allowing licensed physicians to see patients in their state, even over telemedicine.

While seemingly frustrating for physicians who want to see patients over state lines, the delays imposed by states may actually have a welcome effect. If licensure migrates to the federal level, there are many implications. For the purposes of this article, the competitive landscape will become incredibly aggressive. You will need to compete with Amazon Care, Walmart, Cigna, and many other well-funded national players that would love nothing more than to launch a campaign to target the entire nation. Investors are eager to capture part of the nearly quarter-trillion-dollar market, with telemedicine at 38 times prepandemic levels and no signs of abating.

Increased competition for insurers. While the proposed drop in Medicare reimbursement is frustrating, keep a pulse on the fact that your patients may soon be lured by vendors like Amazon and others eager to gain access to physician payments. Instead of analyzing Federal Registers in the future, we may be assessing stock prices.

Consider, therefore, how to ensure that your digital front door is at least available, if not wide open, in the meantime. The nature of physician payments is surely changing.

Ms. Woodcock is president of Woodcock & Associates, Atlanta. She has disclosed no relevant financial relationships. A version of this article first appeared on Medscape.com.

Physicians are bracing for upcoming changes in reimbursement that may start within a few months. As doctors gear up for another wave of COVID, payment trends may not be the top priority, but some “uh oh” announcements in the fall of 2021 could have far-reaching implications that could affect your future.

The Centers for Medicare & Medicaid Services issued a proposed rule in the summer covering key aspects of physician payment. Although the rule contained some small bright lights, the most important changes proposed were far from welcome.

Here’s what could be in store:

1. The highly anticipated Medicare Physician Fee Schedule ruling confirmed a sweeping payment cut. The drive to maintain budget neutrality forced the federal agency to reduce Medicare payments, on average, by nearly 4%. Many physicians are outraged at the proposed cut.

2. More bad news for 2022: Sequestration will be back. Sequestration is the mandatory, pesky, negative 2% adjustment on all Medicare payments. It had been put on hold and is set to return at the beginning of 2022.

Essentially, sequestration reduces what Medicare pays its providers for health services, but Medicare beneficiaries bear no responsibility for the cost difference. To prevent further debt, CMS imposes financially on hospitals, physicians, and other health care providers.

The Health Resources and Services Administration has funds remaining to reimburse for all COVID-related testing, treatment, and vaccines provided to uninsured individuals. You can apply and be reimbursed at Medicare rates for these services when COVID is the primary diagnosis (or secondary in the case of pregnancy). Patients need not be American citizens for you to get paid.

3. Down to a nail-biter: The final ruling is expected in early November. The situation smacks of earlier days when physicians clung to a precipice, waiting in anticipation for a legislative body to save them from the dreaded income plunge. Indeed, we are slipping back to the decade-long period when Congress kept coming to the rescue simply to maintain the status quo.

Many anticipate a last-minute Congressional intervention to save the day, particularly in the midst of another COVID spike. The promises of a stable reimbursement system made possible by the Medicare Access and CHIP Reauthorization Act have been far from realized, and there are signs that the payment landscape is in the midst of a fundamental transformation.

Other changes proposed in the 1,747-page ruling include:
 

Positive:

• More telehealth services will be covered by Medicare, including home visits.
• Tele–mental health services got a big boost; many restrictions were removed so that now the patient’s home is considered a permissible originating site. It also allows for audio-only (no visual required) encounters; the audio-only allowance will extend to opioid use disorder treatment services. Phone treatment is covered.
• Permanent adoption of G2252: The 11- to 20-minute virtual check-in code wasn’t just a one-time payment but will be reimbursed in perpetuity.
• Boosts in reimbursement for chronic care and principal care management codes, which range on the basis of service but indicate a commitment to pay for care coordination.
• Clarification of roles and billing opportunities for split/shared visits, which occur if a physician and advanced practice provider see the same patient on a particular day. Prepare for new coding rules to include a modifier. Previously, the rules for billing were muddled, so transparency helps guide payment opportunities.
• Delay of the appropriate use criteria for advanced imaging for 1 (more) year, a welcome postponement of the ruling that carries a significant administrative burden.
• Physician assistants will be able to bill Medicare directly, and referrals to be made to medical nutrition therapy by a nontreating physician.
• A new approach to patient cost-sharing for colorectal cancer screenings will be phased in. This area has caused problems in the past when the physician identifies a need for additional services (for example, polyp removal by a gastroenterologist during routine colonoscopy).
•  

Not positive:

• Which specialties benefit and which get zapped? The anticipated impact by specialty ranges from hits to interventional radiologists (–9%) and vascular surgeons (–8%), to increases for family practitioners, hand surgeons, endocrinologists, and geriatricians, each estimated to gain a modest 2%. (The exception is portable x-ray supplier, with an estimated increase of 10%.) All other specialties fall in between.
• The proposed conversion factor for 2022 is $33.58, a 3.75% drop from the 2021 conversion factor of $34.89.

The proposed ruling also covered the Quality Payment Program, the overarching program of which the Merit-based Incentive Payment System (MIPS) is the main track for participation. The proposal incorporates additional episode-based cost measures as well as updates to quality indicators and improvement activities.

MIPS penalties. The stakes are higher now, with 9% penalties on the table for nonparticipants. The government offers physicians the ability to officially get out of the program in 2021 because of the COVID-19 pandemic, thereby staving off the steep penalty. The option, which is available through the end of the year, requires a simple application that can be completed on behalf of the entire practice. If you want out, now is the time to find and fill out that application.

Exempt from technology requirements. If the proposal is accepted, small practices – defined by CMS as 15 eligible clinicians or fewer – won’t have to file an annual application to reweight the “promoting interoperability” portion of the program. If acknowledged, small practices will automatically be exempt from the program’s technology section. That’s a big plus, as one of the many chief complaints from small practices is the onus of meeting the technology requirements, which include a security risk analysis, bi-directional health information exchange, public health reporting, and patient access to health information. Meeting the requirements is no small feat. That will only affect future years, so be sure to apply in 2021 if applicable for your practice.

Changes in MIPS. MIPS Value Pathways (MVPs) are anticipated for 2023, with the government releasing details about proposed models for heart disease, rheumatology, joint repair, and more. The MVPs are slated to take over the traditional MIPS by 2027.

The program will shift to 30% of your score coming from the “cost” category, which is based on the government’s analysis of a physician’s claims – and, if attributed, the claims of the patients for whom you care. This area is tricky to manage, but recognize that the costs under scrutiny are the expenses paid by Medicare on behalf of its patients.

In essence, Medicare is measuring the cost of your patients as compared with your colleagues’ costs (in the form of specialty-based benchmarks). Therefore, if you’re referring, or ordering, a more costly set of diagnostic tests, assessments, or interventions than your peers, you’ll be dinged.

However, physicians are more likely this year to flat out reject participation in the federal payment program. Payouts have been paltry and dismal to date, and the buzz is that physicians just don’t consider it worth the effort. Of course, clearing the threshold (which is proposed at 70 points next year) is a must to avoid the penalty, but don’t go crazy to get a perfect score as it won’t count for much. 2022 is the final year that there are any monies for exceptional performance.

Considering that the payouts for exceptional performance have been less than 2% for several years now, it’s hard to justify dedicating resources to achieve perfection. Experts believe that even exceptional performance will only be worth pennies in bonus payments.

The fear of the stick, therefore, may be the only motivation. And that is subjective, as physicians weigh the effort required versus just taking the hit on the penalty. But the penalty is substantial, and so even without the incentive, it’s important to participate at least at the threshold.

Fewer cost-sharing waivers. While the federal government’s payment policies have a major impact on reimbursement, other forces may have broader implications. Commercial payers have rolled back cost-sharing waivers, bringing to light the significant financial responsibility that patients have for their health care in the form of deductibles, coinsurance, and so forth.

More than a third of Americans had trouble paying their health care bills before the pandemic; as patients catch up with services that were postponed or delayed because of the pandemic, this may expose challenges for you. Patients with unpaid bills translate into your financial burden.

Virtual-first health plans. Patients may be seeking alternatives to avoid the frustrating cycle of unpaid medical bills. This may be a factor propelling another trend: Lower-cost virtual-first health plans such as Alignment Health have taken hold in the market. As the name implies, insurance coverage features telehealth that extends to in-person services if necessary.

These disruptors may have their hands at least somewhat tied, however. The market may not be able to fully embrace telemedicine until state licensure is addressed. Despite the federal regulatory relaxations, states still control the distribution of medical care through licensure requirements. Many are rolling back their pandemic-based emergency orders and only allowing licensed physicians to see patients in their state, even over telemedicine.

While seemingly frustrating for physicians who want to see patients over state lines, the delays imposed by states may actually have a welcome effect. If licensure migrates to the federal level, there are many implications. For the purposes of this article, the competitive landscape will become incredibly aggressive. You will need to compete with Amazon Care, Walmart, Cigna, and many other well-funded national players that would love nothing more than to launch a campaign to target the entire nation. Investors are eager to capture part of the nearly quarter-trillion-dollar market, with telemedicine at 38 times prepandemic levels and no signs of abating.

Increased competition for insurers. While the proposed drop in Medicare reimbursement is frustrating, keep a pulse on the fact that your patients may soon be lured by vendors like Amazon and others eager to gain access to physician payments. Instead of analyzing Federal Registers in the future, we may be assessing stock prices.

Consider, therefore, how to ensure that your digital front door is at least available, if not wide open, in the meantime. The nature of physician payments is surely changing.

Ms. Woodcock is president of Woodcock & Associates, Atlanta. She has disclosed no relevant financial relationships. A version of this article first appeared on Medscape.com.

Physicians are bracing for upcoming changes in reimbursement that may start within a few months. As doctors gear up for another wave of COVID, payment trends may not be the top priority, but some “uh oh” announcements in the fall of 2021 could have far-reaching implications that could affect your future.

The Centers for Medicare & Medicaid Services issued a proposed rule in the summer covering key aspects of physician payment. Although the rule contained some small bright lights, the most important changes proposed were far from welcome.

Here’s what could be in store:

1. The highly anticipated Medicare Physician Fee Schedule ruling confirmed a sweeping payment cut. The drive to maintain budget neutrality forced the federal agency to reduce Medicare payments, on average, by nearly 4%. Many physicians are outraged at the proposed cut.

2. More bad news for 2022: Sequestration will be back. Sequestration is the mandatory, pesky, negative 2% adjustment on all Medicare payments. It had been put on hold and is set to return at the beginning of 2022.

Essentially, sequestration reduces what Medicare pays its providers for health services, but Medicare beneficiaries bear no responsibility for the cost difference. To prevent further debt, CMS imposes financially on hospitals, physicians, and other health care providers.

The Health Resources and Services Administration has funds remaining to reimburse for all COVID-related testing, treatment, and vaccines provided to uninsured individuals. You can apply and be reimbursed at Medicare rates for these services when COVID is the primary diagnosis (or secondary in the case of pregnancy). Patients need not be American citizens for you to get paid.

3. Down to a nail-biter: The final ruling is expected in early November. The situation smacks of earlier days when physicians clung to a precipice, waiting in anticipation for a legislative body to save them from the dreaded income plunge. Indeed, we are slipping back to the decade-long period when Congress kept coming to the rescue simply to maintain the status quo.

Many anticipate a last-minute Congressional intervention to save the day, particularly in the midst of another COVID spike. The promises of a stable reimbursement system made possible by the Medicare Access and CHIP Reauthorization Act have been far from realized, and there are signs that the payment landscape is in the midst of a fundamental transformation.

Other changes proposed in the 1,747-page ruling include:
 

Positive:

• More telehealth services will be covered by Medicare, including home visits.
• Tele–mental health services got a big boost; many restrictions were removed so that now the patient’s home is considered a permissible originating site. It also allows for audio-only (no visual required) encounters; the audio-only allowance will extend to opioid use disorder treatment services. Phone treatment is covered.
• Permanent adoption of G2252: The 11- to 20-minute virtual check-in code wasn’t just a one-time payment but will be reimbursed in perpetuity.
• Boosts in reimbursement for chronic care and principal care management codes, which range on the basis of service but indicate a commitment to pay for care coordination.
• Clarification of roles and billing opportunities for split/shared visits, which occur if a physician and advanced practice provider see the same patient on a particular day. Prepare for new coding rules to include a modifier. Previously, the rules for billing were muddled, so transparency helps guide payment opportunities.
• Delay of the appropriate use criteria for advanced imaging for 1 (more) year, a welcome postponement of the ruling that carries a significant administrative burden.
• Physician assistants will be able to bill Medicare directly, and referrals to be made to medical nutrition therapy by a nontreating physician.
• A new approach to patient cost-sharing for colorectal cancer screenings will be phased in. This area has caused problems in the past when the physician identifies a need for additional services (for example, polyp removal by a gastroenterologist during routine colonoscopy).
•  

Not positive:

• Which specialties benefit and which get zapped? The anticipated impact by specialty ranges from hits to interventional radiologists (–9%) and vascular surgeons (–8%), to increases for family practitioners, hand surgeons, endocrinologists, and geriatricians, each estimated to gain a modest 2%. (The exception is portable x-ray supplier, with an estimated increase of 10%.) All other specialties fall in between.
• The proposed conversion factor for 2022 is $33.58, a 3.75% drop from the 2021 conversion factor of $34.89.

The proposed ruling also covered the Quality Payment Program, the overarching program of which the Merit-based Incentive Payment System (MIPS) is the main track for participation. The proposal incorporates additional episode-based cost measures as well as updates to quality indicators and improvement activities.

MIPS penalties. The stakes are higher now, with 9% penalties on the table for nonparticipants. The government offers physicians the ability to officially get out of the program in 2021 because of the COVID-19 pandemic, thereby staving off the steep penalty. The option, which is available through the end of the year, requires a simple application that can be completed on behalf of the entire practice. If you want out, now is the time to find and fill out that application.

Exempt from technology requirements. If the proposal is accepted, small practices – defined by CMS as 15 eligible clinicians or fewer – won’t have to file an annual application to reweight the “promoting interoperability” portion of the program. If acknowledged, small practices will automatically be exempt from the program’s technology section. That’s a big plus, as one of the many chief complaints from small practices is the onus of meeting the technology requirements, which include a security risk analysis, bi-directional health information exchange, public health reporting, and patient access to health information. Meeting the requirements is no small feat. That will only affect future years, so be sure to apply in 2021 if applicable for your practice.

Changes in MIPS. MIPS Value Pathways (MVPs) are anticipated for 2023, with the government releasing details about proposed models for heart disease, rheumatology, joint repair, and more. The MVPs are slated to take over the traditional MIPS by 2027.

The program will shift to 30% of your score coming from the “cost” category, which is based on the government’s analysis of a physician’s claims – and, if attributed, the claims of the patients for whom you care. This area is tricky to manage, but recognize that the costs under scrutiny are the expenses paid by Medicare on behalf of its patients.

In essence, Medicare is measuring the cost of your patients as compared with your colleagues’ costs (in the form of specialty-based benchmarks). Therefore, if you’re referring, or ordering, a more costly set of diagnostic tests, assessments, or interventions than your peers, you’ll be dinged.

However, physicians are more likely this year to flat out reject participation in the federal payment program. Payouts have been paltry and dismal to date, and the buzz is that physicians just don’t consider it worth the effort. Of course, clearing the threshold (which is proposed at 70 points next year) is a must to avoid the penalty, but don’t go crazy to get a perfect score as it won’t count for much. 2022 is the final year that there are any monies for exceptional performance.

Considering that the payouts for exceptional performance have been less than 2% for several years now, it’s hard to justify dedicating resources to achieve perfection. Experts believe that even exceptional performance will only be worth pennies in bonus payments.

The fear of the stick, therefore, may be the only motivation. And that is subjective, as physicians weigh the effort required versus just taking the hit on the penalty. But the penalty is substantial, and so even without the incentive, it’s important to participate at least at the threshold.

Fewer cost-sharing waivers. While the federal government’s payment policies have a major impact on reimbursement, other forces may have broader implications. Commercial payers have rolled back cost-sharing waivers, bringing to light the significant financial responsibility that patients have for their health care in the form of deductibles, coinsurance, and so forth.

More than a third of Americans had trouble paying their health care bills before the pandemic; as patients catch up with services that were postponed or delayed because of the pandemic, this may expose challenges for you. Patients with unpaid bills translate into your financial burden.

Virtual-first health plans. Patients may be seeking alternatives to avoid the frustrating cycle of unpaid medical bills. This may be a factor propelling another trend: Lower-cost virtual-first health plans such as Alignment Health have taken hold in the market. As the name implies, insurance coverage features telehealth that extends to in-person services if necessary.

These disruptors may have their hands at least somewhat tied, however. The market may not be able to fully embrace telemedicine until state licensure is addressed. Despite the federal regulatory relaxations, states still control the distribution of medical care through licensure requirements. Many are rolling back their pandemic-based emergency orders and only allowing licensed physicians to see patients in their state, even over telemedicine.

While seemingly frustrating for physicians who want to see patients over state lines, the delays imposed by states may actually have a welcome effect. If licensure migrates to the federal level, there are many implications. For the purposes of this article, the competitive landscape will become incredibly aggressive. You will need to compete with Amazon Care, Walmart, Cigna, and many other well-funded national players that would love nothing more than to launch a campaign to target the entire nation. Investors are eager to capture part of the nearly quarter-trillion-dollar market, with telemedicine at 38 times prepandemic levels and no signs of abating.

Increased competition for insurers. While the proposed drop in Medicare reimbursement is frustrating, keep a pulse on the fact that your patients may soon be lured by vendors like Amazon and others eager to gain access to physician payments. Instead of analyzing Federal Registers in the future, we may be assessing stock prices.

Consider, therefore, how to ensure that your digital front door is at least available, if not wide open, in the meantime. The nature of physician payments is surely changing.

Ms. Woodcock is president of Woodcock & Associates, Atlanta. She has disclosed no relevant financial relationships. A version of this article first appeared on Medscape.com.

More than 40 value-based payment models – from direct contracting to bundled payments – have been introduced into the Medicare program in the past 10 years, with the goal of improving care while lowering costs. Hopes were high that they would be successful.

But despite the new alternative payment models, costs have not declined. If this continues, Medicare won’t have sufficient funds to cover benefit costs after 2024. Physicians could suffer a huge blow to their income.

Many of the value-based care models simply did not work as expected, said Seema Verma, head of the Centers for Medicare & Medicaid Services, at a recent HLTH Conference. “They are not producing the types of savings the taxpayers deserve,” Ms. Verma said.

The Medicare Payment Advisory Commission (MedPac) concluded that, while dozens of payment models were tested, most failed to generate net savings for Medicare. Even the most successful of the models produced only modest savings. MedPac elaborated: “The track record raises the question of whether changes to particular models or CMMI’s [Center for Medicare & Medicaid Innovation’s] broader strategies might be warranted.”

What will happen now, as government officials admit that their value-based programs haven’t worked? The value-based programs could become more stringent. Here’s what physicians will have to contend with.

More risk. Experts agree that risk – financial risk – will be a component of future programs. Two-sided risk is likely to be the norm. This means that both parties – the provider and the insurer – are at financial risk for the patients covered by the program.

For example, a plan with 50,000 beneficiary patients would estimate the cost of caring for those patients on the basis of multiple variables. If the actual cost is lower than anticipated, both parties share in the savings. However, both share in the loss if the cost of caring for their patient population exceeds expectations.

This may compel physicians to enhance efficiency and potentially limit the services provided to patients. Typically, however, the strategy is to make efforts to prevent services like ED visits and admissions by focusing on health maintenance.

In contrast to most current value-based models, which feature little to no downside risk for physicians, double-sided risk means physicians could lose money. The loss may incorporate a cap – 5%, for example – but programs may differ. Experts concur that double-sided risk will be a hallmark of future programs.

Better data. The majority of health care services are rendered via fee-for-service: Patients receive services and physicians are paid, yet little or no information about outcomes is exchanged between insurers and physicians.

Penny Noyes, president of Health Business Navigators and contract negotiator for physicians, is not a fan of the current crop of value-based programs and feels that data transparency is positive. Sound metrics can lead to improvement, she said, adding: “It’s not money that drives physicians to make decisions; it’s what’s in the best interest of their patients and their patients’ long-term care.”

Value-based programs can work but only if applicable data are developed and given to physicians so that they can better understand their current performance and how to improve.

Mandated participation. Participation in value-based programs has been voluntary, but that may have skewed the results, which were better than what typical practice would have shown. Acknowledging this may lead CMS to call for mandated participation as a component of future programs. Physicians may be brought into programs, if only to determine whether the models really work. To date, participation in the programs has been voluntary, but that may change in the future.

Innovation. The private insurance market may end up as a key player. Over the past 6 months, health insurers have either consolidated partnerships with telemedicine companies to provide no-cost care to beneficiaries or have launched their own initiatives.

Others are focused on bringing together patients and providers operating outside of the traditional health care system, such as Aetna’s merger with CVS which now offers retail-based acute care (MinuteClinic) and chronic care (HealthHUB). Still other payers are gambling with physician practice ownership, as in the case of United Healthcare’s OptumHealth, which now boasts around 50,000 physicians throughout the country.

New practice models are emerging in private practices as well. Physicians are embracing remote care, proactively managing care transitions, and seeking out more methods to keep patients healthy and at home.
 

Not much was expected from value-based plans 

Many are not surprised that the value-based models did not produce impressive results. Ms. Noyes doubted that positive outcomes will be achieved for physicians in comparison with what could have been attained under fee-for-service arrangements with lower administrative costs.

While the Affordable Care Act attempted to encourage alternative reimbursement, it limits the maximum medical loss ratio (MLR) a payer could achieve. For many plans, that maximum was 85%. Simply put, at least $0.85 of each premium collected had to be paid in claims; the remaining $0.15 went to margin, claims, and other administrative costs. A payer with an 82% MLR then would have to rebate the 3% difference to enrollees.

But that’s not what occurred, according to Ms. Noyes. Because value-based payments to providers are considered a claims expense, an MLR ratio of 82% allowed the payer to distribute the 3% difference to providers as value-based payments. Ms. Noyes said: “That may sound good for the provider, but the result was essentially a freeze on the provider’s fee-for-service reimbursement with the prospect of getting value-based payments like ‘shared savings.’ 

“When the providers tried to increase their base fee-for-service rates just to match inflation, payers often advised that any future raises had to be earned through value-based programs,” Ms. Noyes added. The value-based formulas confuse providers because payments are often made for periods as far back as 18 months, and providers do not have data systems to reconcile their payer report cards retrospectively. The result is that providers tended to accept whatever amount the payer distributed.

Executives at Lumeris, a company that helps health systems participate successfully in value-based care, see potential in a newer approach to alternative payments, such as CMS’ Direct Contracting initiative. This voluntary payment model offers options tailored to several types of organizations that aim to reduce costs while preserving or enhancing the quality of care for Medicare fee-for-service beneficiaries.

Jeff Smith, chief commercial officer for population health at Lumeris, explained that the Direct Contracting initiative can provide physicians with a more attractive option than prior value-based models because it adjusts for the complexity and fragility of patients with complex and chronic conditions. By allowing providers to participate in the savings generated, the initiative stands in stark contrast to what Mr. Smith described as the “shared savings to nothingness” experienced by providers in earlier-stage alternative payment models.

Physicians engaged with value-based programs like Direct Contracting are investing in nurses to aid with initiatives regarding health promotion and transitions of care. When a patient is discharged, for example, the nurse contacts the patient to discuss medications, schedule follow-up appointments, and so forth – tasks typically left to the patient (or caregiver) to navigate in the traditional system.

The initiative recognizes the importance of managing high-risk patients, those whom physicians identify as having an extraordinary number of ED visits and admissions. These patients, as well as so-called “rising-risk” patients, are targeted by nurses who proactively communicate with patients (and caregivers) to address patient’s needs, including social determinants of health.

Physicians who have a large load of patients in value-based programs are hiring social workers, pharmacists, and behavioral health experts to help. Of course, these personnel are costly, but that’s what the value-based programs aim to reimburse.

Still, the road ahead to value based is rocky and may not gain momentum for some time. Johns Hopkins University’s Doug Hough, PhD, an economist, recounts a government research study that sought to assess the university’s health system participation in a value-based payment program. While there were positive impacts on the program’s target population, Hough and his team discovered that the returns achieved by the optional model didn’t justify the health system’s financial support for it. The increasingly indebted health system ultimately decided to drop the optional program.

Dr. Hough indicated that the health system – Johns Hopkins Medicine – likely would have  continued its support for the program had the government at least allowed it to break even. Although the payment program under study was a 3-year project, the bigger challenge, declared Dr. Hough, is that “we can’t turn an aircraft carrier that quickly.”

“Three years won’t show whether value-based care is really working,” Dr. Hough said.

Robert Zipper, MD, a hospitalist and senior policy advisor for Sound Physicians, a company that works to improve outcomes in acute care, agreed with Dr. Hough that performance tends to improve with time. Yet, Dr. Zipper doesn’t see much change in the near term, because “after all, there is nothing to replace them [the programs].”

The problem gets even stickier for private payers because patients may be on an insurance panel for as little as a year or 2. Thanks to this rapid churn of beneficiaries, even the best-designed value-based program will have little time to prove its worth.

Dr. Zipper is among the many who don’t expect significant changes in the near term, asserting that “President Biden will want to get a few policy wins first, and health care is not the easiest place to start.”

But it’s likely that payers and others will want to see more emphasis on value-based programs despite these programs’ possible value to patients, physicians, and health systems alike.

A version of this article originally appeared on Medscape.com.

More than 40 value-based payment models – from direct contracting to bundled payments – have been introduced into the Medicare program in the past 10 years, with the goal of improving care while lowering costs. Hopes were high that they would be successful.

But despite the new alternative payment models, costs have not declined. If this continues, Medicare won’t have sufficient funds to cover benefit costs after 2024. Physicians could suffer a huge blow to their income.

Many of the value-based care models simply did not work as expected, said Seema Verma, head of the Centers for Medicare & Medicaid Services, at a recent HLTH Conference. “They are not producing the types of savings the taxpayers deserve,” Ms. Verma said.

The Medicare Payment Advisory Commission (MedPac) concluded that, while dozens of payment models were tested, most failed to generate net savings for Medicare. Even the most successful of the models produced only modest savings. MedPac elaborated: “The track record raises the question of whether changes to particular models or CMMI’s [Center for Medicare & Medicaid Innovation’s] broader strategies might be warranted.”

What will happen now, as government officials admit that their value-based programs haven’t worked? The value-based programs could become more stringent. Here’s what physicians will have to contend with.

More risk. Experts agree that risk – financial risk – will be a component of future programs. Two-sided risk is likely to be the norm. This means that both parties – the provider and the insurer – are at financial risk for the patients covered by the program.

For example, a plan with 50,000 beneficiary patients would estimate the cost of caring for those patients on the basis of multiple variables. If the actual cost is lower than anticipated, both parties share in the savings. However, both share in the loss if the cost of caring for their patient population exceeds expectations.

This may compel physicians to enhance efficiency and potentially limit the services provided to patients. Typically, however, the strategy is to make efforts to prevent services like ED visits and admissions by focusing on health maintenance.

In contrast to most current value-based models, which feature little to no downside risk for physicians, double-sided risk means physicians could lose money. The loss may incorporate a cap – 5%, for example – but programs may differ. Experts concur that double-sided risk will be a hallmark of future programs.

Better data. The majority of health care services are rendered via fee-for-service: Patients receive services and physicians are paid, yet little or no information about outcomes is exchanged between insurers and physicians.

Penny Noyes, president of Health Business Navigators and contract negotiator for physicians, is not a fan of the current crop of value-based programs and feels that data transparency is positive. Sound metrics can lead to improvement, she said, adding: “It’s not money that drives physicians to make decisions; it’s what’s in the best interest of their patients and their patients’ long-term care.”

Value-based programs can work but only if applicable data are developed and given to physicians so that they can better understand their current performance and how to improve.

Mandated participation. Participation in value-based programs has been voluntary, but that may have skewed the results, which were better than what typical practice would have shown. Acknowledging this may lead CMS to call for mandated participation as a component of future programs. Physicians may be brought into programs, if only to determine whether the models really work. To date, participation in the programs has been voluntary, but that may change in the future.

Innovation. The private insurance market may end up as a key player. Over the past 6 months, health insurers have either consolidated partnerships with telemedicine companies to provide no-cost care to beneficiaries or have launched their own initiatives.

Others are focused on bringing together patients and providers operating outside of the traditional health care system, such as Aetna’s merger with CVS which now offers retail-based acute care (MinuteClinic) and chronic care (HealthHUB). Still other payers are gambling with physician practice ownership, as in the case of United Healthcare’s OptumHealth, which now boasts around 50,000 physicians throughout the country.

New practice models are emerging in private practices as well. Physicians are embracing remote care, proactively managing care transitions, and seeking out more methods to keep patients healthy and at home.
 

Not much was expected from value-based plans 

Many are not surprised that the value-based models did not produce impressive results. Ms. Noyes doubted that positive outcomes will be achieved for physicians in comparison with what could have been attained under fee-for-service arrangements with lower administrative costs.

While the Affordable Care Act attempted to encourage alternative reimbursement, it limits the maximum medical loss ratio (MLR) a payer could achieve. For many plans, that maximum was 85%. Simply put, at least $0.85 of each premium collected had to be paid in claims; the remaining $0.15 went to margin, claims, and other administrative costs. A payer with an 82% MLR then would have to rebate the 3% difference to enrollees.

But that’s not what occurred, according to Ms. Noyes. Because value-based payments to providers are considered a claims expense, an MLR ratio of 82% allowed the payer to distribute the 3% difference to providers as value-based payments. Ms. Noyes said: “That may sound good for the provider, but the result was essentially a freeze on the provider’s fee-for-service reimbursement with the prospect of getting value-based payments like ‘shared savings.’ 

“When the providers tried to increase their base fee-for-service rates just to match inflation, payers often advised that any future raises had to be earned through value-based programs,” Ms. Noyes added. The value-based formulas confuse providers because payments are often made for periods as far back as 18 months, and providers do not have data systems to reconcile their payer report cards retrospectively. The result is that providers tended to accept whatever amount the payer distributed.

Executives at Lumeris, a company that helps health systems participate successfully in value-based care, see potential in a newer approach to alternative payments, such as CMS’ Direct Contracting initiative. This voluntary payment model offers options tailored to several types of organizations that aim to reduce costs while preserving or enhancing the quality of care for Medicare fee-for-service beneficiaries.

Jeff Smith, chief commercial officer for population health at Lumeris, explained that the Direct Contracting initiative can provide physicians with a more attractive option than prior value-based models because it adjusts for the complexity and fragility of patients with complex and chronic conditions. By allowing providers to participate in the savings generated, the initiative stands in stark contrast to what Mr. Smith described as the “shared savings to nothingness” experienced by providers in earlier-stage alternative payment models.

Physicians engaged with value-based programs like Direct Contracting are investing in nurses to aid with initiatives regarding health promotion and transitions of care. When a patient is discharged, for example, the nurse contacts the patient to discuss medications, schedule follow-up appointments, and so forth – tasks typically left to the patient (or caregiver) to navigate in the traditional system.

The initiative recognizes the importance of managing high-risk patients, those whom physicians identify as having an extraordinary number of ED visits and admissions. These patients, as well as so-called “rising-risk” patients, are targeted by nurses who proactively communicate with patients (and caregivers) to address patient’s needs, including social determinants of health.

Physicians who have a large load of patients in value-based programs are hiring social workers, pharmacists, and behavioral health experts to help. Of course, these personnel are costly, but that’s what the value-based programs aim to reimburse.

Still, the road ahead to value based is rocky and may not gain momentum for some time. Johns Hopkins University’s Doug Hough, PhD, an economist, recounts a government research study that sought to assess the university’s health system participation in a value-based payment program. While there were positive impacts on the program’s target population, Hough and his team discovered that the returns achieved by the optional model didn’t justify the health system’s financial support for it. The increasingly indebted health system ultimately decided to drop the optional program.

Dr. Hough indicated that the health system – Johns Hopkins Medicine – likely would have  continued its support for the program had the government at least allowed it to break even. Although the payment program under study was a 3-year project, the bigger challenge, declared Dr. Hough, is that “we can’t turn an aircraft carrier that quickly.”

“Three years won’t show whether value-based care is really working,” Dr. Hough said.

Robert Zipper, MD, a hospitalist and senior policy advisor for Sound Physicians, a company that works to improve outcomes in acute care, agreed with Dr. Hough that performance tends to improve with time. Yet, Dr. Zipper doesn’t see much change in the near term, because “after all, there is nothing to replace them [the programs].”

The problem gets even stickier for private payers because patients may be on an insurance panel for as little as a year or 2. Thanks to this rapid churn of beneficiaries, even the best-designed value-based program will have little time to prove its worth.

Dr. Zipper is among the many who don’t expect significant changes in the near term, asserting that “President Biden will want to get a few policy wins first, and health care is not the easiest place to start.”

But it’s likely that payers and others will want to see more emphasis on value-based programs despite these programs’ possible value to patients, physicians, and health systems alike.

A version of this article originally appeared on Medscape.com.

More than 40 value-based payment models – from direct contracting to bundled payments – have been introduced into the Medicare program in the past 10 years, with the goal of improving care while lowering costs. Hopes were high that they would be successful.

But despite the new alternative payment models, costs have not declined. If this continues, Medicare won’t have sufficient funds to cover benefit costs after 2024. Physicians could suffer a huge blow to their income.

Many of the value-based care models simply did not work as expected, said Seema Verma, head of the Centers for Medicare & Medicaid Services, at a recent HLTH Conference. “They are not producing the types of savings the taxpayers deserve,” Ms. Verma said.

The Medicare Payment Advisory Commission (MedPac) concluded that, while dozens of payment models were tested, most failed to generate net savings for Medicare. Even the most successful of the models produced only modest savings. MedPac elaborated: “The track record raises the question of whether changes to particular models or CMMI’s [Center for Medicare & Medicaid Innovation’s] broader strategies might be warranted.”

What will happen now, as government officials admit that their value-based programs haven’t worked? The value-based programs could become more stringent. Here’s what physicians will have to contend with.

More risk. Experts agree that risk – financial risk – will be a component of future programs. Two-sided risk is likely to be the norm. This means that both parties – the provider and the insurer – are at financial risk for the patients covered by the program.

For example, a plan with 50,000 beneficiary patients would estimate the cost of caring for those patients on the basis of multiple variables. If the actual cost is lower than anticipated, both parties share in the savings. However, both share in the loss if the cost of caring for their patient population exceeds expectations.

This may compel physicians to enhance efficiency and potentially limit the services provided to patients. Typically, however, the strategy is to make efforts to prevent services like ED visits and admissions by focusing on health maintenance.

In contrast to most current value-based models, which feature little to no downside risk for physicians, double-sided risk means physicians could lose money. The loss may incorporate a cap – 5%, for example – but programs may differ. Experts concur that double-sided risk will be a hallmark of future programs.

Better data. The majority of health care services are rendered via fee-for-service: Patients receive services and physicians are paid, yet little or no information about outcomes is exchanged between insurers and physicians.

Penny Noyes, president of Health Business Navigators and contract negotiator for physicians, is not a fan of the current crop of value-based programs and feels that data transparency is positive. Sound metrics can lead to improvement, she said, adding: “It’s not money that drives physicians to make decisions; it’s what’s in the best interest of their patients and their patients’ long-term care.”

Value-based programs can work but only if applicable data are developed and given to physicians so that they can better understand their current performance and how to improve.

Mandated participation. Participation in value-based programs has been voluntary, but that may have skewed the results, which were better than what typical practice would have shown. Acknowledging this may lead CMS to call for mandated participation as a component of future programs. Physicians may be brought into programs, if only to determine whether the models really work. To date, participation in the programs has been voluntary, but that may change in the future.

Innovation. The private insurance market may end up as a key player. Over the past 6 months, health insurers have either consolidated partnerships with telemedicine companies to provide no-cost care to beneficiaries or have launched their own initiatives.

Others are focused on bringing together patients and providers operating outside of the traditional health care system, such as Aetna’s merger with CVS which now offers retail-based acute care (MinuteClinic) and chronic care (HealthHUB). Still other payers are gambling with physician practice ownership, as in the case of United Healthcare’s OptumHealth, which now boasts around 50,000 physicians throughout the country.

New practice models are emerging in private practices as well. Physicians are embracing remote care, proactively managing care transitions, and seeking out more methods to keep patients healthy and at home.
 

Not much was expected from value-based plans 

Many are not surprised that the value-based models did not produce impressive results. Ms. Noyes doubted that positive outcomes will be achieved for physicians in comparison with what could have been attained under fee-for-service arrangements with lower administrative costs.

While the Affordable Care Act attempted to encourage alternative reimbursement, it limits the maximum medical loss ratio (MLR) a payer could achieve. For many plans, that maximum was 85%. Simply put, at least $0.85 of each premium collected had to be paid in claims; the remaining $0.15 went to margin, claims, and other administrative costs. A payer with an 82% MLR then would have to rebate the 3% difference to enrollees.

But that’s not what occurred, according to Ms. Noyes. Because value-based payments to providers are considered a claims expense, an MLR ratio of 82% allowed the payer to distribute the 3% difference to providers as value-based payments. Ms. Noyes said: “That may sound good for the provider, but the result was essentially a freeze on the provider’s fee-for-service reimbursement with the prospect of getting value-based payments like ‘shared savings.’ 

“When the providers tried to increase their base fee-for-service rates just to match inflation, payers often advised that any future raises had to be earned through value-based programs,” Ms. Noyes added. The value-based formulas confuse providers because payments are often made for periods as far back as 18 months, and providers do not have data systems to reconcile their payer report cards retrospectively. The result is that providers tended to accept whatever amount the payer distributed.

Executives at Lumeris, a company that helps health systems participate successfully in value-based care, see potential in a newer approach to alternative payments, such as CMS’ Direct Contracting initiative. This voluntary payment model offers options tailored to several types of organizations that aim to reduce costs while preserving or enhancing the quality of care for Medicare fee-for-service beneficiaries.

Jeff Smith, chief commercial officer for population health at Lumeris, explained that the Direct Contracting initiative can provide physicians with a more attractive option than prior value-based models because it adjusts for the complexity and fragility of patients with complex and chronic conditions. By allowing providers to participate in the savings generated, the initiative stands in stark contrast to what Mr. Smith described as the “shared savings to nothingness” experienced by providers in earlier-stage alternative payment models.

Physicians engaged with value-based programs like Direct Contracting are investing in nurses to aid with initiatives regarding health promotion and transitions of care. When a patient is discharged, for example, the nurse contacts the patient to discuss medications, schedule follow-up appointments, and so forth – tasks typically left to the patient (or caregiver) to navigate in the traditional system.

The initiative recognizes the importance of managing high-risk patients, those whom physicians identify as having an extraordinary number of ED visits and admissions. These patients, as well as so-called “rising-risk” patients, are targeted by nurses who proactively communicate with patients (and caregivers) to address patient’s needs, including social determinants of health.

Physicians who have a large load of patients in value-based programs are hiring social workers, pharmacists, and behavioral health experts to help. Of course, these personnel are costly, but that’s what the value-based programs aim to reimburse.

Still, the road ahead to value based is rocky and may not gain momentum for some time. Johns Hopkins University’s Doug Hough, PhD, an economist, recounts a government research study that sought to assess the university’s health system participation in a value-based payment program. While there were positive impacts on the program’s target population, Hough and his team discovered that the returns achieved by the optional model didn’t justify the health system’s financial support for it. The increasingly indebted health system ultimately decided to drop the optional program.

Dr. Hough indicated that the health system – Johns Hopkins Medicine – likely would have  continued its support for the program had the government at least allowed it to break even. Although the payment program under study was a 3-year project, the bigger challenge, declared Dr. Hough, is that “we can’t turn an aircraft carrier that quickly.”

“Three years won’t show whether value-based care is really working,” Dr. Hough said.

Robert Zipper, MD, a hospitalist and senior policy advisor for Sound Physicians, a company that works to improve outcomes in acute care, agreed with Dr. Hough that performance tends to improve with time. Yet, Dr. Zipper doesn’t see much change in the near term, because “after all, there is nothing to replace them [the programs].”

The problem gets even stickier for private payers because patients may be on an insurance panel for as little as a year or 2. Thanks to this rapid churn of beneficiaries, even the best-designed value-based program will have little time to prove its worth.

Dr. Zipper is among the many who don’t expect significant changes in the near term, asserting that “President Biden will want to get a few policy wins first, and health care is not the easiest place to start.”

But it’s likely that payers and others will want to see more emphasis on value-based programs despite these programs’ possible value to patients, physicians, and health systems alike.

A version of this article originally appeared on Medscape.com.

Amid all the chaos and problems caused by COVID-19, one might hope that physicians would get a break on their complicated payment-reporting programs.

But that’s not the case: The government recently released the 2021 proposed rule for the Quality Payment Program (QPP), often referred to by its most popular participation track, the Merit-Based Incentive Payment System (MIPS). The program, which launched in 2017, gets annual updates, and this year is no different.

Some good news has made primary care and some other physicians happy.

The government’s proposal includes significant changes to reimbursement for all physicians. Most important, the government is boosting rates for the office/outpatient evaluation and management (E/M) codes, combined with simplifying coding requirements.

Specialties that rely heavily on office-based E/M services are delighted at this change. Those include internists, family physicians, neurologists, pulmonologists, dermatologists, and all other specialties that rely heavily on office encounters.

According to the estimates from the Centers for Medicare & Medicaid Services (CMS), endocrinologists and rheumatologists are the big winners, at 17% and 16% projected increases, respectively. The government has been pushing to make this shift in reimbursement from surgeries and procedures to office visits for years. Although some physicians may celebrate the change, others will not.

The reimbursement plan for professional services depends on budget neutrality, meaning that the budget increases need to be counterbalanced by budget declines. Specialties that rely heavily on procedures and surgeries will suffer losses. These corresponding reductions felt by proceduralists and surgeons will counterbalance the good fortune of physicians who rely on office visits for the bulk of their revenue. Radiologists, for example, are projected by CMS to experience a 11% downturn, and cardiac surgeons face a 9% decline.

These consequences are significant. The 2021 shift may be the single biggest transfer of reimbursement in the history of the scale, which was adopted in the early 1990s.

If the change affected only Medicare reimbursement, perhaps it would be less significant. Because the majority of private payers use the government’s scale – the resource-based relative value scale – the impact will reverberate across physicians’ bottom lines. Given the state of many physicians’ finances, driven by the pandemic, this may send some affected physicians into a downward spiral.

The boost to E/M reimbursement – which represents approximately 20% of the overall Medicare payout to physicians each year – puts downward pressure on the professional services conversion factor as well.

For 2021, it is proposed to be $32.2605, representing a decrease of $3.83 from the 2020 conversion factor of $36.0896. The resultant conversion factor – which serves as a multiplier applied to the relative value unit to come up with the payment – effectively reduces payments to physicians across the board by 10.6%. Thus, even those who enjoy the benefits of the new E/M increases will see the potential reimbursement high point cut down.

Before launching into the changes in store for 2021, it’s good to determine whether you are an eligible clinician: You need to have more than $90,000 in Medicare Part B charges per year, see more than 200 Medicare Part B patients per year, and provide 200 or more covered professional services to Part B patients.

The program is voluntary, but there are steep penalties for eligible clinicians who don’t participate. For the 2021 reporting year, a 9% penalty will be imposed on Medicare reimbursement in 2023 in the event of participation failure. You can verify your participation status here; you’ll need your National Provider Identifier to run the search, but it takes only seconds to determine your eligibility.

A 9% penalty is a pretty big hit to your income. With 9% at stake, eligible clinicians need to actively engage in the program. Although there have been changes, the basic four-category system remains the same for the MIPS track, as follows: quality, cost, improvement activities, and promoting interoperability.

The four category weights, used to evaluate performance, are changing in 2021. Cost category weight goes up by 5 percentage points, to be 20% of the clinician’s score, and the quality category goes down by 5 percentage points to contribute 40% to the weight. Promoting interoperability remains 25% of the score, with improvement activities constituting the final 15%.

Other key changes include the following:

• The CMS’s Web interface for submission for quality measures will be shuttered in 2021. Users of this submission method will have to find and use another way to report their quality measures.
• Quality measures will be scored against pre-COVID benchmarks in lieu of comparisons with the 2020 reporting year; 206 quality measures are proposed for 2021, compared with the current list of 219.
• Telehealth will be incorporated in the cost category by updates to the measure specifications for the episode-based and total per capita cost measures.
• A new health information exchange measure is added to the promoting interoperability category, and “incorporating” replaces “reconciling” in the reporting requirement “Support Electronic Referral Loops by Receiving and Incorporating Health Information.”

To avoid the 9% penalty, eligible clinicians must earn 50 points in 2021, up from 45 in the current year. Achieving “exceptional performance” remains at 85 points. This elevated level of engagement allows access to a pot of money Congress set aside for high performers.

Many physicians feel that too much work is required to earn the “paltry” bonuses; even a perfect score of 100 has only resulted in bonuses of 1.88% and 1.68%, respectively, in the past 2 years. That includes the $500 million allocation that Congress set aside; this extra funding to reward exceptional performance is only available for the first 6 years of the law. Although the 2019 scores have been released to participants, CMS has not yet announced the overall national average, but it’s expected to be minimal.

The combination of meager payouts and a diminishing funding mechanism has physicians questioning participation altogether. My recent conversations with physicians who qualify for the program revealed their intention to participate, but only at a level to achieve the minimum threshold of 45 points this year and 50 in 2021. With so little upside, it’s impossible to make a business case to aim for the stars.

Perhaps the biggest change in 2021, however, is that the program is not making the previously planned switch to MIPS Value Pathways (MVPs). MVPs were designed to align the four performance categories around a specialty, medical condition, or patient population.

CMS introduced MVPs by giving an example of diabetes: “Endocrinologist reports same ‘foundation’ of PI [promoting interoperability] and population health measures as all other clinicians but now has a MIPS Value Pathway with measures and activities that focus on diabetes prevention and treatment.” CMS had expected MVPs to launch in 2021 for all program participants; because of the pandemic, CMS announced an extension for at least 1 year. This comes as a relief to physicians who are just trying to keep the lights on given the financial pressures brought on by the pandemic.

MVPs, however, will be incorporated into the MIPS Alternative Payment Model (APM) participation segment. This will affect many physicians because this is the path that accountable care organizations (ACOs) have taken. If you are part of an ACO and you report through it, you’ll see some more changes than your colleagues in 2021.

The good news is that ACOs that participate in MIPS and the Medicare Shared Savings Program will have to report only once to satisfy the requirements for both programs. The construct for this new APM-based program is called the “APM Performance Pathway.” This pathway incorporates six population health–based measures that cross-cut specialties.

CMS is also proposing that telemedicine reimbursement will become permanent. As of now, telemedicine services will only be paid when a public health emergency has been declared. This ability to reimburse physicians for telemedicine would end when the current public health emergency is over. CMS is proposing to extend reimbursement beyond the pandemic, which will benefit all physicians who perform these remote encounters.

The CMS proposal would also make some other requirements easier to achieve. The use of codes 99495 and 99496 – the transitional care management codes – is expanding by reducing several key accompanying-services restrictions. Before the public health emergency, there were constraints related to scope of practice; the proposal would extend the ability of advanced practice providers to order diagnostic tests, even after the public health emergency ends.

Furthermore, the proposal reduces restrictions related to billing for remote physiologic monitoring services and outlines the possibility of a new, higher-paying virtual visit code.

Although the Quality Payment Program will undergo some changes, they are minor. Be aware of the requirement to hit the 50-point mark to avoid the steep penalties, however. Perhaps greater benefit will be achieved through the government’s continued push to refine the reimbursement system. As a result of budget neutrality, however, these changes will boost some physicians while resulting in losses for others.

The government’s proposed changes are not final, and there is a period during which they are accepting comments on the proposal; the final rule will be announced in November.

If you want to wash your hands of this now, apply for the 2020 performance year hardship for the Quality Payment Program. The application is now open and available through December 31, 2020; completing it will release you of any program requirements in 2020 (and avoid that hefty 9% penalty on your 2022 reimbursement).

This way, you won’t have to concern yourself with any of these rules until next year; the government’s extension of this “get out of jail free” card is a welcome relief for physicians who are frustrated by the regulatory burdens despite the pressure exerted by COVID. Spending 15 minutes to complete this form is well worth your time and may eliminate much of your worry.
 

A version of this article originally appeared on Medscape.com.

Amid all the chaos and problems caused by COVID-19, one might hope that physicians would get a break on their complicated payment-reporting programs.

But that’s not the case: The government recently released the 2021 proposed rule for the Quality Payment Program (QPP), often referred to by its most popular participation track, the Merit-Based Incentive Payment System (MIPS). The program, which launched in 2017, gets annual updates, and this year is no different.

Some good news has made primary care and some other physicians happy.

The government’s proposal includes significant changes to reimbursement for all physicians. Most important, the government is boosting rates for the office/outpatient evaluation and management (E/M) codes, combined with simplifying coding requirements.

Specialties that rely heavily on office-based E/M services are delighted at this change. Those include internists, family physicians, neurologists, pulmonologists, dermatologists, and all other specialties that rely heavily on office encounters.

According to the estimates from the Centers for Medicare & Medicaid Services (CMS), endocrinologists and rheumatologists are the big winners, at 17% and 16% projected increases, respectively. The government has been pushing to make this shift in reimbursement from surgeries and procedures to office visits for years. Although some physicians may celebrate the change, others will not.

The reimbursement plan for professional services depends on budget neutrality, meaning that the budget increases need to be counterbalanced by budget declines. Specialties that rely heavily on procedures and surgeries will suffer losses. These corresponding reductions felt by proceduralists and surgeons will counterbalance the good fortune of physicians who rely on office visits for the bulk of their revenue. Radiologists, for example, are projected by CMS to experience a 11% downturn, and cardiac surgeons face a 9% decline.

These consequences are significant. The 2021 shift may be the single biggest transfer of reimbursement in the history of the scale, which was adopted in the early 1990s.

If the change affected only Medicare reimbursement, perhaps it would be less significant. Because the majority of private payers use the government’s scale – the resource-based relative value scale – the impact will reverberate across physicians’ bottom lines. Given the state of many physicians’ finances, driven by the pandemic, this may send some affected physicians into a downward spiral.

The boost to E/M reimbursement – which represents approximately 20% of the overall Medicare payout to physicians each year – puts downward pressure on the professional services conversion factor as well.

For 2021, it is proposed to be $32.2605, representing a decrease of $3.83 from the 2020 conversion factor of $36.0896. The resultant conversion factor – which serves as a multiplier applied to the relative value unit to come up with the payment – effectively reduces payments to physicians across the board by 10.6%. Thus, even those who enjoy the benefits of the new E/M increases will see the potential reimbursement high point cut down.

Before launching into the changes in store for 2021, it’s good to determine whether you are an eligible clinician: You need to have more than $90,000 in Medicare Part B charges per year, see more than 200 Medicare Part B patients per year, and provide 200 or more covered professional services to Part B patients.

The program is voluntary, but there are steep penalties for eligible clinicians who don’t participate. For the 2021 reporting year, a 9% penalty will be imposed on Medicare reimbursement in 2023 in the event of participation failure. You can verify your participation status here; you’ll need your National Provider Identifier to run the search, but it takes only seconds to determine your eligibility.

A 9% penalty is a pretty big hit to your income. With 9% at stake, eligible clinicians need to actively engage in the program. Although there have been changes, the basic four-category system remains the same for the MIPS track, as follows: quality, cost, improvement activities, and promoting interoperability.

The four category weights, used to evaluate performance, are changing in 2021. Cost category weight goes up by 5 percentage points, to be 20% of the clinician’s score, and the quality category goes down by 5 percentage points to contribute 40% to the weight. Promoting interoperability remains 25% of the score, with improvement activities constituting the final 15%.

Other key changes include the following:

• The CMS’s Web interface for submission for quality measures will be shuttered in 2021. Users of this submission method will have to find and use another way to report their quality measures.
• Quality measures will be scored against pre-COVID benchmarks in lieu of comparisons with the 2020 reporting year; 206 quality measures are proposed for 2021, compared with the current list of 219.
• Telehealth will be incorporated in the cost category by updates to the measure specifications for the episode-based and total per capita cost measures.
• A new health information exchange measure is added to the promoting interoperability category, and “incorporating” replaces “reconciling” in the reporting requirement “Support Electronic Referral Loops by Receiving and Incorporating Health Information.”

To avoid the 9% penalty, eligible clinicians must earn 50 points in 2021, up from 45 in the current year. Achieving “exceptional performance” remains at 85 points. This elevated level of engagement allows access to a pot of money Congress set aside for high performers.

Many physicians feel that too much work is required to earn the “paltry” bonuses; even a perfect score of 100 has only resulted in bonuses of 1.88% and 1.68%, respectively, in the past 2 years. That includes the $500 million allocation that Congress set aside; this extra funding to reward exceptional performance is only available for the first 6 years of the law. Although the 2019 scores have been released to participants, CMS has not yet announced the overall national average, but it’s expected to be minimal.

The combination of meager payouts and a diminishing funding mechanism has physicians questioning participation altogether. My recent conversations with physicians who qualify for the program revealed their intention to participate, but only at a level to achieve the minimum threshold of 45 points this year and 50 in 2021. With so little upside, it’s impossible to make a business case to aim for the stars.

Perhaps the biggest change in 2021, however, is that the program is not making the previously planned switch to MIPS Value Pathways (MVPs). MVPs were designed to align the four performance categories around a specialty, medical condition, or patient population.

CMS introduced MVPs by giving an example of diabetes: “Endocrinologist reports same ‘foundation’ of PI [promoting interoperability] and population health measures as all other clinicians but now has a MIPS Value Pathway with measures and activities that focus on diabetes prevention and treatment.” CMS had expected MVPs to launch in 2021 for all program participants; because of the pandemic, CMS announced an extension for at least 1 year. This comes as a relief to physicians who are just trying to keep the lights on given the financial pressures brought on by the pandemic.

MVPs, however, will be incorporated into the MIPS Alternative Payment Model (APM) participation segment. This will affect many physicians because this is the path that accountable care organizations (ACOs) have taken. If you are part of an ACO and you report through it, you’ll see some more changes than your colleagues in 2021.

The good news is that ACOs that participate in MIPS and the Medicare Shared Savings Program will have to report only once to satisfy the requirements for both programs. The construct for this new APM-based program is called the “APM Performance Pathway.” This pathway incorporates six population health–based measures that cross-cut specialties.

CMS is also proposing that telemedicine reimbursement will become permanent. As of now, telemedicine services will only be paid when a public health emergency has been declared. This ability to reimburse physicians for telemedicine would end when the current public health emergency is over. CMS is proposing to extend reimbursement beyond the pandemic, which will benefit all physicians who perform these remote encounters.

The CMS proposal would also make some other requirements easier to achieve. The use of codes 99495 and 99496 – the transitional care management codes – is expanding by reducing several key accompanying-services restrictions. Before the public health emergency, there were constraints related to scope of practice; the proposal would extend the ability of advanced practice providers to order diagnostic tests, even after the public health emergency ends.

Furthermore, the proposal reduces restrictions related to billing for remote physiologic monitoring services and outlines the possibility of a new, higher-paying virtual visit code.

Although the Quality Payment Program will undergo some changes, they are minor. Be aware of the requirement to hit the 50-point mark to avoid the steep penalties, however. Perhaps greater benefit will be achieved through the government’s continued push to refine the reimbursement system. As a result of budget neutrality, however, these changes will boost some physicians while resulting in losses for others.

The government’s proposed changes are not final, and there is a period during which they are accepting comments on the proposal; the final rule will be announced in November.

If you want to wash your hands of this now, apply for the 2020 performance year hardship for the Quality Payment Program. The application is now open and available through December 31, 2020; completing it will release you of any program requirements in 2020 (and avoid that hefty 9% penalty on your 2022 reimbursement).

This way, you won’t have to concern yourself with any of these rules until next year; the government’s extension of this “get out of jail free” card is a welcome relief for physicians who are frustrated by the regulatory burdens despite the pressure exerted by COVID. Spending 15 minutes to complete this form is well worth your time and may eliminate much of your worry.
 

A version of this article originally appeared on Medscape.com.

Amid all the chaos and problems caused by COVID-19, one might hope that physicians would get a break on their complicated payment-reporting programs.

But that’s not the case: The government recently released the 2021 proposed rule for the Quality Payment Program (QPP), often referred to by its most popular participation track, the Merit-Based Incentive Payment System (MIPS). The program, which launched in 2017, gets annual updates, and this year is no different.

Some good news has made primary care and some other physicians happy.

The government’s proposal includes significant changes to reimbursement for all physicians. Most important, the government is boosting rates for the office/outpatient evaluation and management (E/M) codes, combined with simplifying coding requirements.

Specialties that rely heavily on office-based E/M services are delighted at this change. Those include internists, family physicians, neurologists, pulmonologists, dermatologists, and all other specialties that rely heavily on office encounters.

According to the estimates from the Centers for Medicare & Medicaid Services (CMS), endocrinologists and rheumatologists are the big winners, at 17% and 16% projected increases, respectively. The government has been pushing to make this shift in reimbursement from surgeries and procedures to office visits for years. Although some physicians may celebrate the change, others will not.

The reimbursement plan for professional services depends on budget neutrality, meaning that the budget increases need to be counterbalanced by budget declines. Specialties that rely heavily on procedures and surgeries will suffer losses. These corresponding reductions felt by proceduralists and surgeons will counterbalance the good fortune of physicians who rely on office visits for the bulk of their revenue. Radiologists, for example, are projected by CMS to experience a 11% downturn, and cardiac surgeons face a 9% decline.

These consequences are significant. The 2021 shift may be the single biggest transfer of reimbursement in the history of the scale, which was adopted in the early 1990s.

If the change affected only Medicare reimbursement, perhaps it would be less significant. Because the majority of private payers use the government’s scale – the resource-based relative value scale – the impact will reverberate across physicians’ bottom lines. Given the state of many physicians’ finances, driven by the pandemic, this may send some affected physicians into a downward spiral.

The boost to E/M reimbursement – which represents approximately 20% of the overall Medicare payout to physicians each year – puts downward pressure on the professional services conversion factor as well.

For 2021, it is proposed to be $32.2605, representing a decrease of $3.83 from the 2020 conversion factor of $36.0896. The resultant conversion factor – which serves as a multiplier applied to the relative value unit to come up with the payment – effectively reduces payments to physicians across the board by 10.6%. Thus, even those who enjoy the benefits of the new E/M increases will see the potential reimbursement high point cut down.

Before launching into the changes in store for 2021, it’s good to determine whether you are an eligible clinician: You need to have more than $90,000 in Medicare Part B charges per year, see more than 200 Medicare Part B patients per year, and provide 200 or more covered professional services to Part B patients.

The program is voluntary, but there are steep penalties for eligible clinicians who don’t participate. For the 2021 reporting year, a 9% penalty will be imposed on Medicare reimbursement in 2023 in the event of participation failure. You can verify your participation status here; you’ll need your National Provider Identifier to run the search, but it takes only seconds to determine your eligibility.

A 9% penalty is a pretty big hit to your income. With 9% at stake, eligible clinicians need to actively engage in the program. Although there have been changes, the basic four-category system remains the same for the MIPS track, as follows: quality, cost, improvement activities, and promoting interoperability.

The four category weights, used to evaluate performance, are changing in 2021. Cost category weight goes up by 5 percentage points, to be 20% of the clinician’s score, and the quality category goes down by 5 percentage points to contribute 40% to the weight. Promoting interoperability remains 25% of the score, with improvement activities constituting the final 15%.

Other key changes include the following:

• The CMS’s Web interface for submission for quality measures will be shuttered in 2021. Users of this submission method will have to find and use another way to report their quality measures.
• Quality measures will be scored against pre-COVID benchmarks in lieu of comparisons with the 2020 reporting year; 206 quality measures are proposed for 2021, compared with the current list of 219.
• Telehealth will be incorporated in the cost category by updates to the measure specifications for the episode-based and total per capita cost measures.
• A new health information exchange measure is added to the promoting interoperability category, and “incorporating” replaces “reconciling” in the reporting requirement “Support Electronic Referral Loops by Receiving and Incorporating Health Information.”

To avoid the 9% penalty, eligible clinicians must earn 50 points in 2021, up from 45 in the current year. Achieving “exceptional performance” remains at 85 points. This elevated level of engagement allows access to a pot of money Congress set aside for high performers.

Many physicians feel that too much work is required to earn the “paltry” bonuses; even a perfect score of 100 has only resulted in bonuses of 1.88% and 1.68%, respectively, in the past 2 years. That includes the $500 million allocation that Congress set aside; this extra funding to reward exceptional performance is only available for the first 6 years of the law. Although the 2019 scores have been released to participants, CMS has not yet announced the overall national average, but it’s expected to be minimal.

The combination of meager payouts and a diminishing funding mechanism has physicians questioning participation altogether. My recent conversations with physicians who qualify for the program revealed their intention to participate, but only at a level to achieve the minimum threshold of 45 points this year and 50 in 2021. With so little upside, it’s impossible to make a business case to aim for the stars.

Perhaps the biggest change in 2021, however, is that the program is not making the previously planned switch to MIPS Value Pathways (MVPs). MVPs were designed to align the four performance categories around a specialty, medical condition, or patient population.

CMS introduced MVPs by giving an example of diabetes: “Endocrinologist reports same ‘foundation’ of PI [promoting interoperability] and population health measures as all other clinicians but now has a MIPS Value Pathway with measures and activities that focus on diabetes prevention and treatment.” CMS had expected MVPs to launch in 2021 for all program participants; because of the pandemic, CMS announced an extension for at least 1 year. This comes as a relief to physicians who are just trying to keep the lights on given the financial pressures brought on by the pandemic.

MVPs, however, will be incorporated into the MIPS Alternative Payment Model (APM) participation segment. This will affect many physicians because this is the path that accountable care organizations (ACOs) have taken. If you are part of an ACO and you report through it, you’ll see some more changes than your colleagues in 2021.

The good news is that ACOs that participate in MIPS and the Medicare Shared Savings Program will have to report only once to satisfy the requirements for both programs. The construct for this new APM-based program is called the “APM Performance Pathway.” This pathway incorporates six population health–based measures that cross-cut specialties.

CMS is also proposing that telemedicine reimbursement will become permanent. As of now, telemedicine services will only be paid when a public health emergency has been declared. This ability to reimburse physicians for telemedicine would end when the current public health emergency is over. CMS is proposing to extend reimbursement beyond the pandemic, which will benefit all physicians who perform these remote encounters.

The CMS proposal would also make some other requirements easier to achieve. The use of codes 99495 and 99496 – the transitional care management codes – is expanding by reducing several key accompanying-services restrictions. Before the public health emergency, there were constraints related to scope of practice; the proposal would extend the ability of advanced practice providers to order diagnostic tests, even after the public health emergency ends.

Furthermore, the proposal reduces restrictions related to billing for remote physiologic monitoring services and outlines the possibility of a new, higher-paying virtual visit code.

Although the Quality Payment Program will undergo some changes, they are minor. Be aware of the requirement to hit the 50-point mark to avoid the steep penalties, however. Perhaps greater benefit will be achieved through the government’s continued push to refine the reimbursement system. As a result of budget neutrality, however, these changes will boost some physicians while resulting in losses for others.

The government’s proposed changes are not final, and there is a period during which they are accepting comments on the proposal; the final rule will be announced in November.

If you want to wash your hands of this now, apply for the 2020 performance year hardship for the Quality Payment Program. The application is now open and available through December 31, 2020; completing it will release you of any program requirements in 2020 (and avoid that hefty 9% penalty on your 2022 reimbursement).

This way, you won’t have to concern yourself with any of these rules until next year; the government’s extension of this “get out of jail free” card is a welcome relief for physicians who are frustrated by the regulatory burdens despite the pressure exerted by COVID. Spending 15 minutes to complete this form is well worth your time and may eliminate much of your worry.
 

A version of this article originally appeared on Medscape.com.