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Medicare’s Quality Payment Program

December 01, 2016 | Medicare Enrollment

The Centers of Medicare and Medicaid Services (CMS) estimates that around 55 million Americans rely on medical treatment through Medicare. For years, the CMS has been trying to balance the quality of care given with keeping overall costs down. Responsible for administering the Medicare program, the CMS believes that a value-based payment (VBP) model is the future of healthcare reimbursement and that this system will replace the fee-for-service (FFS) model that is currently in place.

The rules in place regarding the use of technology in storing and transmitting medical practice information (found primarily in the HIPAA laws) have instigated a lot of change in the medical industry. The CMS is doing its part to bring technology into the medical field by introducing the quality payment program (QPP). This program is part of the Medicare Access and CHIP Reauthorization Act of 2015 that was revised in 2016 to streamline the process of paying medical technicians and encourage medical practices to update their technology, while focusing on quality of care.

What is the QPP?

The quality payment program (QPP) is the first stage of what the CMS estimates will be a long-term approach to altering the way clinicians are paid. Payments based on quality of care reforms previous payment models that reimbursed clinicians for their work with Medicare Part B patients. It’s a new payment model that brings together several other segments of other payment formats, and gives clinicians a much more defined path towards increasing their income and becoming a quality provider in the eyes of the CMS.

Clinicians participate in the QPP by using either advanced alternative payment models (APM) or the merit-based incentive payment system (MIPS). The MIPS was created when several existing programs were combined into one program that streamlined a significant portion of the clinician payment process. The APM path rewards medical practices for getting more involved with the care of their patients and assuming some level of risk with patient treatment. The MIPS path is made up of a series of quality grades used by the CMS to determine what type of pay adjustment (up, down or neutral) a medical practice gets based on their grades.

How Will the QPP Alter Medicare?

There are two primary focuses of the new quality payment program:

  • To increase the quality of care while keeping costs down
  • To create incentives for medical practices to update their technology

The MIPS model includes tasks for improving office technology that a medical practice can perform to earn points towards a possible payment increase. The quality payment program is also set up to continue the CMS’s migration towards a value-based payment (VBP) system and away from the fee-for-service model that’s currently being used. Much of the information that is delivered to the CMS to grade clinicians is included in each Medicare claim that clinicians file, but some of the information has to be reported by the clinicians to count towards their grades.

Why Would Clinicians Get Involved in the QPP?

By the year 2022, clinicians can earn payment bonuses of up to 9 percent of all of their annual billings if they comply with the quality payment program. For practices that get involved with the advanced alternatives payment models (APM), Medicare will award an extra 5 percent payment bonus since these practices are shouldering additional risks when treating patients.

While the CMS makes it financially tempting to join the QPP, it also punishes ambivalence. Any provider that does not submit at least one report in a year will be hit with a 4 percent payment penalty. If a practice submits just one report, it can avoid that automatic penalty.

What About Smaller Practices?

To qualify for the QPP program, a practice has to bill at least $30,000 to Medicare in one year and see at least 100 Medicare patients in the same time period. Very small medical practices will not have to worry about the requirements of the program, but any small rural practice wishing to participate can contact the CMS about special conditions set up specifically for rural providers.

Participation in the QPP is mandatory for qualifying medical practices. This brings up the issue of the costs of technology upgrades for practices that meet the criteria, but do not have the financial resources to upgrade their business operations. There is a considerable financial investment required by a medical practice before it qualifies for the payment bonuses, and some practices cannot afford those investments.

Organizations such as Quality Improvement Organizations and Regional Extension Centers do offer assistance to smaller practices in upgrading equipment and investing in new processes, but there are limited resources available to only a small number of practices. The business decisions some smaller practices may have to make could involve selling to a larger practice or obtaining third-party financing.

The Timeline

Medical practices that feel they are ready to get involved in the QPP right away can start reporting their data on January 1, 2017. The CMS has set a deadline of October 2, 2017 for all qualifying medical practices to be involved in the program. A practice can choose to get involved in the program at a low level, or it can decide to become a full-time member. The CMS recommends that providers get involved full time with the program on January 1, 2017 to receive all of the benefits the program has to offer, and to stay up-to-date on requirements and other information.

Payment increases or decreases will be assigned by January 1, 2019 for practices that report data in 2017. Payment adjustments go up one percent per year from 2019 to 2022 until they reach the maximum of 9 percent. The QPP is not an all-or-nothing program. Practices can either qualify for a partial payment increase, or they could be hit with a partial payment deduction.

The CMS is using its new quality payment program to offer incentives for medical practices to update their technology and provide high-quality care to every patient. Since the program is just getting underway in 2016, any clinician who treats patients through the Medicare Part B program will want to stay updated on the changes each year as they occur.