Wednesday, November 25, 2015

The Merit-Based Incentive Payment System (MIPS) & Alternative Payment Models (APMs): Delivery System Reform, Medicare Payment Reform, & the MACRA

This MACRA system makes three important change to how Medicare pays those providers who give care to Medicare beneficiaries. The areas that have changed are as follows:

  • 1.      This new system ends the Sustainable Growth Rate (SGR) formula that was crucial in determining the reimbursement/payment to healthcare providers for services delivered to their Medicare beneficiaries.
  • 2.      Establishing a new framework to establish a reward system for healthcare providers that deliver better or higher quality care, not just more care over more dates of service (DOS).
  • 3.      Eliminating the fragmented quality reporting program and establishing a single system for the reporting of quality results.

The new MACRA reform works in a way that will enhance and expedite the change of the payment structure from billing for services, without the weight of quality figured in, to a system that reimburses based on value and quality of care delivered to the patient. In addition, the MACRA system streamlines and simplifies the process in which a provider can successfully take part in Medicare’s quality programs by initiating:

  • 1.      A Merit-Based Incentive Payment System (MIPS)
  • 2.      Alternative Payment Models (APM)

These two new systems will be go into effect through the upcoming years from 2015-2021 and beyond.

MIPS is a program that combines parts of the existing Physician Quality Reporting System (PQRS), the Value Modifier (VM) or otherwise known as Value-based Payment Modifier, and Medicare Electronic Health Record (EHR) incentive program into one single system that is based on:
  • ·         Quality
  • ·         Resource use
  • ·         Clinical practice improvement
  • ·         Meaningful Use for EHR

The APM model is designed to give providers new ways to get paid for the care that they give Medicare Beneficiaries. This includes lump-sum incentive payment, increased transparency for physician-focused payment models, and offering higher annual payments.

The timeline for MIPS and APM starts in 2015 and will go through 2016, and later. The payments will include for MIPS incentives of quality, resource use, clinical improvements, and meaningful use from 4% through 9% in 2016. APMs will have a 5% incentive payment and is excluded from MIPS.
For more information on MACRA you can go to:

For more information on the Medicare Access and CHIP Reauthorization Act you can to to:

Submitted by Kevin Harrington, Full Time Faculty, Health Administration, 
Saint Joseph's College.   Contact Kevin at if you would like to discuss this further.

Friday, November 13, 2015

Moving from Information to Knowledge in Challenging Times!

“The species that survives is the one most able to change.”
          Charles Darwin

The healthcare sector is a dynamic and rapidly evolving business model that has new market forces being imposed on it from a variety of directions.  Moving from the historical “fee-for-service”  (FFS)payment scheme to “bundled payments” for a defined period of time after discharge,  is intended to put providers at risk, for both the outcomes of care and the cost of the services provided.   
                In the middle of summer, the Centers for Medicare and Medicaid Innovation (CMMI) announced a mandatory bundled payment requirement for two (2) Medicare orthopedic DRG’s, or the so-called CCJR model.  This payment system is being applied in seventy-five (75) metropolitan locations across the country and is supposed to start on January 1, 2016.

                Currently, CMMI has about forty (40) demonstration projects around the country that are experimenting with numerous systems to reduce costs and enhance outcomes.   Accountable Care Organ1zations (ACO’s) in the form of “Pioneer ACO’s”, original ACO’s and Next Generation ACO’s, are all part of this evolving payment direction.  Even non-acute care organizations are moving into risk-based payment systems.  The CMMI Bundled Payment Care Initiative (BPCI) Model 3 demonstrations that saw almost 1,000 non-acute care providers (skilled nursing facilities, home care providers, and hospice organizations) accept contracts to provide services under a fixed bundle amount.

While some providers and payers have used similar models for non-governmental payers, moving the Medicare FFS to this new model will require move information about the care, costs, and outcomes to the patient by providers.  That will translate into the need for health information systems that creates a value to the organization to provide the ability to move to a knowledge-based decision process.

Darwin’s quote should certainly be considered by healthcare providers as the evolution of the care delivery system moves into the sector.  Those providers that understand the information that will be needed to thrive in this new knowledge environment will most likely be one of the survivors.  Those organizations that fail to see how information is translated into knowledge and make decisions based on the data will have difficulty competing.

Contributed by Steve Chies, MHA, Adjunct Faculty Saint Joseph's College