Last week, after years of physician advocacy, a bill repealing the sustainable growth rate (SGR) formula was signed into law. Thanks to this new law, the Medicare Access and CHIP Reauthorization Act, a 21% cut to physician payment will not be implemented. In addition, the legislation includes a number of new provisions that will help shape payment in years to come.

Future Payment Updates
Under the new law, there will be no payment cut and no increase for claims Jan. 1 – June 30, 2015. A 0.5% increase is then scheduled for claims July 1 – Dec. 31, 2015. An additional 0.5% payment increase is scheduled for 2016, 2017 and 2018. Starting in 2019, no payment increase is scheduled; however, new incentives will encourage providers to participate in a new quality program and alternative payment models (described below) to increase reimbursement.

Quality Incentive Programs and Alternative Payment Models
Under the new law, existing quality programs will sunset in 2018. This includes: the EHR Meaningful Use Incentive Program, Physician Quality Reporting System, and the Value Based Payment Modifier Program. A new quality program, called the Merit-Based Incentive Payment System (MIPS), will take effect in 2019 and will measure performance based on: quality, resource use, clinical practice improvement activities, and meaningful use of certified EHR technology. By participating in MIPS, providers will have the opportunity to earn incentives of up to 4% in 2019 growing to as much as 9% after 2022. In addition to quality reporting, the new law encourages providers to participate in alternative payment models. From 2019 to 2024, providers participating in an alternative payment model will earn a 5% payment incentive.

While the framework is established for these new quality programs, the details of implementation and how physicians will participate is still to be determined. The AASM will continue to update members as the Centers for Medicare & Medicaid Services (CMS) develops regulations for these programs in proposed rulemaking.

Learn more:  Text of the Medicare Access and CHIP Reauthorization Act of 2015