Medical Practice Viability – SGR Formula Banished; Battles and Games Continue
Hooray! The SGR Formula is dead! The paralyzing, resource-draining threat of drastic Medicare payment cuts that has plagued physicians and legislators since 1997 was finally banished on April 16th when President Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) into law. The package extends funding for the Children’s Health Insurance Program (CHIP) for two years and provides a 0.5% pay increase for physicians each year until 2019, allowing transition to a new payment system. See ‘Shift to Value-Based Reimbursement Models’ below.
What’s next? There is no time for physicians to rest on their laurels, reveling in the spoils of the recent victory. While the daily challenges and rewards of medical practice continue, there are battles ahead and new games to play for the prize of continued viability.
Battle: ICD-10 Transition Deadline, October 1, 2015
Twice delayed within the past few years, CMS has made clear that there will be no additional postponements, so if they are to win this battle, providers need to be prepared to successfully submit claims and receive payments while utilizing the ICD-10 code set.
Below please find some key preparation steps, which include a summary of ICD-10 Transition Facts recently released by CMS, as well as key preparation steps. In addition, WPS Medicare’s website has helpful information to help small practices get, or stay, on track.
- The deadline is set for October 1 and providers need to be ready.
- CPT Coding related to outpatient and office processes will stay the same.
- Identify and provide training for all staff members who will be working with the new code set.
- Providers and their staff should focus on their most commonly utilized ICD-9 codes, as well as any HCPC, DRG and CPT codes affected, and familiarize themselves with the ICD-10 comparable code selection and documentation requirements. Just as they haven’t used all 13,000 ICD-9 codes, they won’t have to use all 68,000 ICD-10 codes. And even though it includes more codes, the ICD-10 set is no more difficult to use than the ICD-9 set.
- Work with your practice management system and any other IT vendors to assure they are all able to able to accommodate the new code set. With your vendors, clearinghouse and payers, create a plan for internal and external testing of your ability to send and receive claims prior to the deadline.
- Assure resources are secured to carry the practice in the event of ICD-10 related claims submission and/or payment delays.
Game: Shift to Value-Based Reimbursement Models
While the Affordable Care Act (ACA) and the various payment models it created set Health and Human Services (HHS)’ intentions to move away from straight fee for service payment models into play, in a press conference on January 26th of this year, HHS Secretary Sylvia M. Burwell announced clear goals and a timeline to move the Medicare program toward paying providers based on the quality, rather than the quantity of care they give patients.
And in an unprecedented effort to shift the payment paradigm of the healthcare system at large, at said press conference, Secretary Burwell announced creation of the HHS Health Care Payment Learning and Action Network, via which HHS will work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners to expand alternative payment models into their programs. For more information about HHS’ ‘Better, Smarter, Healthier’ initiative, including the Learning and Action Network, click here.
Secretary Burwell’s plan was embodied in MACRA, which consolidated existing quality reporting programs and incentivizes Eligible Providers (EPs) to move into 1 of 2 new payment models: The Merit-based Incentive Payment System (MIPS) and the Alternative Payment Model (APM). Under MACRA, EPs will receive a 0.5% reimbursement increase each year until 2019. In 2019, EPs that have tied at least 25% of their Medicare revenue to alternative payments would then be eligible for increased reimbursement. Those providers who do not meet that threshold will see their payment rates freeze for six years. For the purpose of brevity, payments after 2025 will not be addressed in this article.
With their eyes on the viability prize, Eligible Providers must take advantage of these next few years’ reimbursement stability and:
- Evaluate their practices and improve operational efficiencies.
- Implement patient centric processes, which will in turn improve all medical practice Key Performance Indicators (KPIs).
- Accept the value of, and comply with, Evidence Based Medicine guidelines in their practices.
- Educate themselves about the new value-based payment models (MIPS and APMs), choose which track they will participate in, and work to meet the thresholds.
- Adopt and embrace the technology which will assist them accomplish all of the above.
Not enough time in the day? Resources already stretched? Let us know how we can help you get on track, accomplish long or short-term initiatives and supplement your internal capacity.