"Doctor Fix" Signed Into Law
Who: Doctors providing Medicare services, and tangentially all doctors under insurance network contracts..
When: Effective April 16, 2015.
What: The “Doctor Fix” is the layman’s term for eliminating a 1997 law – referred to as the Sustainable Growth Rate (SGR) - that controlled Medicare physician reimbursements. The SGR was designed to limit medical spending to the annual growth rate of the U.S.”Gross Domestic Product” (GDP). However, medical costs have mostly been higher than GDP growth and Congress has overridden the SGR in most years to prevent an otherwise required reduction in physician payments. Without a repeal of SGR the cumulative overrides would have reduced physician Medicare reimbursements by 21% in 2015.
Executive Summary: Physicians are paid based on diagnosis and services identified as “Current Procedural Terminology” or CPT codes. The “Doctor Fix” directly changes the increases in CPT amounts paid for Medicare services. In addition, most commercially negotiated insurance rates are typically related (directly or indirectly) to Medicare reimbursements, so indirectly the cost of nearly all physician services could be altered as provider network contracts renew.
Under the new law, Medicare will increase physician reimbursements 0.5% in July 2015 and each year through 2019. From 2020 through 2025 rates will remain the same, but beginning in 2018 payments can vary based on individual quality incentives called the “Merit-Based Incentive Payment System” (MIPS).
MIPS replaces three existing incentive programs that will sunset in 2017.
The new incentive program will assess quality, resource use, and the use of “Electronic Health Records” (EHRs). In addition, physicians may be assessed on efforts to improve their practice and participate in “Advance Payment Methods” (APM) currently used by “Accountable Care organizations” (ACOs). By 2022 the bonuses could reach + or – 9%, with the aggregate total being budget neutral.
For the first two years of MIPS, the following Medicare Part B providers are deemed eligible professionals: physicians, physician assistants, nurse practitioners, clinical nurse specialists, and nurse anesthetists. For the third and succeeding years, the following providers also become MIPS-eligible: physical or occupational therapists, speech-language pathologists, audiologists, nurse midwives, clinical social workers, clinical psychologists, and dietitians or nutrition professionals.
The following care givers are excluded from MIPS eligibility:
1. Providers mainly participating in an APM (they have separate incentives)
2. Providers below a Medicare volume threshold.
3. Providers who enroll in Medicare for the first time are exempt until the next year.
Actions: Providers should seek guidance from their consultants, lawyers, or other management support to better understand the impact of the Doctor fix, the opportunities to participate in the current and future incentive programs, and the potential impacts on non-Medicare contracts. Vendors supporting physician reimbursement and billing systems may need to reprogram software. Insurers may want to revise existing negotiations and provider contracts related to Medicare costs and quality measures.
The information presented and contained within this article was submitted by Ronald E. Bachman, President & CEO of Healthcare Visions and Chairman of the IHC Editorial Advisory Board. This information is general information only, and does not, and is not intended to constitute legal advice. You should consult legal advisors to determine the laws and regulations applicable to your company. Any opinions expressed within this document are solely the opinion of the individual author.