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Forge Ahead, Every Path Leads to Tumultuous Healthcare Change

Written by: Darlene D'Altorio-Jones (1959-2015) on Thursday, April 2, 2015 Posted in: Acute Care Rehab

It was very evident with each speaker at the AMRPA Executive Forum this past March, that this year will be like no other in healthcare. In two half days of lectures, I have never felt more overwhelmed by the messages that were being given by high ranking Centers for Medicare & Medicaid employees and a Veterans Health Administration employee, along with others invited to share perspectives on healthcare management challenges.

Several maps, or blueprints are in the making to meet the Affordable Care Act Triple AIM. Quality and payment reform that meets ‘affordable’ from a payment perspective seems to be where all the action aligns.


See how quality and reduced costs are pushing the adoption of several payment actions:

  • Affordable Care Organizations:  When an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings for Medicare part A patients. In fact,  on March 10, 2015, the Center for Innovation announced the newest ACO called the ‘Next Generation ACO’ and is currently looking for 15-20 participants. These result in Bundled Payment for Care Improvement (BPCI). Participation in an ACO is expected to give healthcare providers a better understanding of costs in an episode of care. Although these are voluntary payment programs at present, the lessons learned in these shared savings programs will formulate future policy and payment development for certain.
  • Physician Quality Reporting System: PQRS is a reporting program that uses a combination of incentive payments and negative payment adjustments to promote reporting of quality information by eligible professionals (EPs). To qualify for a PQRS incentive payment, eligible professionals must meet the criteria for satisfactory reporting Medicare beneficiary outcomes to CMS for particular reporting periods. In an effort to promote quality care & outcomes, this program provides incentive payments and negative adjustments for less than quality care.
  • Value Based Modifier Program:  VBMP utilizes information from the PQRS program and a physician Quality Resource and Use Report (QRUR). The report will then provide information on eligible payment incentives and reductions based on outcomes performance. Although initially targeting group practices, eventually all physicians participating in Medicare Fee for Service payment will be affected in the fiscal year 2017. Depending on whether you are considered high quality/low cost or low quality/high cost, reimbursement will follow based on a positive or negative value modifiier adjustment or ‘neutral adjustment’  for average performers. Additional payments can be awarded for those performing in the top 25 percent of beneficiary risks scores.
  • Merit Based Incentive Payment System: MIPS could award incentive payments or payment reductions to eligible professionals based on composite performance scores. The score is compiled between 0-100 based on four activities: quality, meaningful use, resource use  and clinical practice improvement activities for physicians not in an alternative payment model system. This program was proposed in 2014 to offset a solution to the sustainable growth rate payment formula and the ongoing short falls to fix the SGR ,also being debated in congress at this time. Eventually a consolidation of each of the programs mentioned above would help to sustain MIPS and reduce multiple program payment iniatives. Whether this is still on the table would depend on how SGR reform legislation is acted upon by the end of March this year.
  • IMPACT ACT of 2014: Signed into law in September 2014, the ACT will set the stage for interoperability information along the Post-Acute Care Continuum which will facilitate coordinated care, improved outcomes and overall quality comparison between provider types. Implementation of the act will provide measurements to facilitate the understanding of costs and reimbursment across the post-acute care rehabilitation settings. Site-neutral payment proposals are thought to be premature on the legislation agenda until the outcomes of IMPACT Act activities are aggregated.

The Department of Health and Human Services (HHS), has announced, in fact, that “HHS has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018.”

In addition, HHS set “a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.” Such aggressive goals were announced for the first time in the history of the Medicare program per HHS. Each of the alternative payment models, programs and systems discussed above will take a bite in meeting the three part AIM.

Expect tumultuous change and payment models in healthcare and expect that outcomes and data aggregation will lead that change!

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