Three key elements will shape Medicare physician payments over the next decade: 1) The SGR replacement (MACRA) will impose penalties on physicians who do not change how they practice to focus more on quality over volume. 2) Practice Transformation Networks will provide regional assistance to help practices transition, but will not provide direct financial assistance. 3) Chronic Care Management payments provide an immediate revenue source to fund practice changes by reimbursing practices for care coordination activities.

1. Physician Payments
Three elements that will shape Medicare
physician payment over the next ten yens
Steven Lash
Managing Director
Strategic Healthcare Advisory Services

2. New pressures, new resources
 Pressure: The SGR replacement
(MACRA) will impose 4-9% pay
reductions on physicians who do not
change
 Resources: Practice Transformation
Networks will provide regional
assistance
 Resources: Chronic Care
Management (CCM) provides
immediate cash flow for change

3. 2026 and beyond
0.25% annual updates 0.75 annual updates
2019-2025
4-9% penalties/bonuses* 5% lump sum bonus
2015-2018
0.5% annual updates
Merit-based Incentive
Payments
(MIPS)
Alternative Payment Models
(APMs)
*Bonuses may be higher

4. What is MIPS?
 A fusion of the current incentive
systems: Meaningful use, Physician
Quality Reporting System (PQRS), and
the Value-Based Modifier
 In 2019: 4% penalty/4% bonus
 Gradual increases for three years
 By 2022: 9% penalty/9% bonus
 Bonuses could be larger if scaling is
applied

5. How to get out of MIPS
 Meet minimum participation thresholds
in APMs; either within Medicare
caseload or across all payer caseload
 APM participants who are close to but
fall short of APM bonus requirements
will not qualify for bonus but can report
MIPS measures and receive incentives or
can decline to participate in MIPS

6. What is an APM?
 Accountable Care Organization (ACO)
 Innovation Center model, particularly
bundled payment
 Patient centered medical home
 Other models to be specified by the
Physician-Focused Payment Models
Technical Advisory Committee (TAC).

7. Practice Transformation
Networks
 Cooperative agreements for 29
organizations across the country
 Each must enroll and engage a
minimum number of physicians
 GOAL: to prepare practices for
alternative payment models

8. PTNs as resources
 Phase 1: Develop patient and family engagement
tools
 Phase 2: Expand care team, identify community
partners, improve care transitions, continuity of
care, patient self-management
 Phase 3: Use EHR, use team roles and functions,
care plans, use risk stratification, coordinate care
 Phases 4,5: Create care coordination reports,
establish links with practice as medical home,
enable practice to take risk associated with
episode management
…but no cash assistance

9. CCM could provide revenue for
transformation
 Fee-for-service payment of $42
pm/pm
 Aligns patients with your practices
and system
 Has foundational pieces for PCMH,
managing episodes, and population
health to succeed in an APM