Physicians are looking to new models of care delivery and payment as a proven means of keeping patients healthier and reducing health care costs. Recent legislation opens the door for new models, and provides funding to physicians who adopt them. But two key barriers still need to be broken down.
Changing the way care is delivered and paid for could better enable physicians and their care teams to help keep patients from developing preventable health problems, avoid unnecessary tests and better manage health conditions to prevent hospitalizations, complications or infections.
The recently adopted Medicare Access and CHIP Reauthorization Act (MACRA)—the legislation that repealed Medicare’s sustainable growth rate (SGR) formula—creates opportunities to advance implementation of alternative payment models. Physicians who reach threshold levels of participation in qualified models from 2019-2024 will receive 5 percent bonus payments each year.
What’s standing in the way
The AMA worked with Harold Miller at the Center for Healthcare Quality and Payment Reform, a member of the newly appointed Physician-Focused Payment Models Technical Advisory Committee to the federal government, to develop the “Guide to Physician-Focused Alternative Payment Models.”
The guide, in addition to describing seven physician-focused alternative payment models, first highlights two common barriers in current payment systems that often stand in the way of implementing necessary changes.
Limited payment for high-value services
Medicare and most commercial health plans do not pay physicians for many services that would benefit patients and help reduce avoidable spending.
A number of time-consuming activities that keep patients healthy and costs in check generally aren’t paid for or are paid insufficiently. For example:
- Responding to a patient’s phone call about a symptom or problem.
- Communications between primary care physicians and specialists to coordinate care, or the time spent by a physician serving as the leader of a multi-physician care team.
- Communications between community physicians and emergency physicians, and short-term treatment and discharge planning in emergency departments.
- Spending time in a shared decision-making process with patients and family members when there are multiple treatment options.
- Hiring nurses and other staff to provide education and self-management support to patients and family members.
- Providing palliative care for patients in conjunction with treatment.
Financial penalties for delivering a different mix of services
Under fee-for-service payment, physician practices can lose revenue if physicians perform fewer procedures or lower-cost procedures that benefit patients. Meanwhile, the costs of running the practices often do not decrease in proportion to the changes in income, which can cause operating losses.
For many patient conditions, most of the savings payers would experience from new models do not come from the payments that are made to the physician practice, so savings still can be achieved without financially penalizing the physician practice. The most severe impact under fee-for-service is that, when their patients stay healthy and do not need health care services, physicians may not be paid at all.
Working to overcome these barriers
Physicians aren’t just waiting on the sidelines. More than 100 state and specialty medical associations joined the AMA in sending a letter (log in) to the Centers for Medicare & Medicaid Services (CMS) recommending 10 principles to guide MACRA implementation of alternative payment models.
The repeal of the SGR formula created new opportunities for improved payment systems. The AMA has spent more than five years encouraging the development and implementation of better health care payment systems.
This work has emphasized several goals:
- Give physicians more resources and flexibility to deliver care
- Improve financial viability in physician practices
- Minimize administrative burdens that weigh physicians down
- Enable physicians to control aspects of spending that they can influence
- Avoid transferring inappropriate financial risk to physicians
Accelerating its efforts to support physician-designed alternative payment models, the AMA also compiled a step-by-step process to develop successful payment models for medical specialties. Visit the AMA’s Medicare alternative payment models Web page to read more.
Look for more insights about adopting new payment models from the “Guide to Physician-Focused Alternative Payment Models” in the coming weeks as AMA Wire shares the characteristics of successful payment models and the many different types that will be available.