Medicare Releases Timeline for Penalty and Bonus Program

Medicare has announced that the quality care model for doctor reimbursement, formerly known as the value based purchasing plan, will go into effect over the next few years. The program will shift medicine away from its current payment system in which doctors are most often paid for each service regardless of their performance. Instead, Medicare will begin to gradually factor quality of care into reimbursement payments for hospitals, nursing homes, physicians, and most other medical providers.

Medicare has already decided that large physician groups, classified as those with 100 or more doctors, nurses, social workers or other health professionals, will gain or lose as much as 1 percent of their pay starting in 2015. Those incentives would double to 2 percent the following year under draft regulations Medicare released this month.

The proposal also would phase mid-sized physicians groups, those with between 10 and 99 health professionals, into the program in 2016 instead of in 2017 as previously proposed. While they would be eligible for bonuses up to 2 percent, they would be shielded from any penalties for that first year.

In 2017, the program would add the remaining doctors in practices of nine or fewer professionals, about 350,000 doctors, according to Medicare’s estimates.

The program would alter quality measures by specialty but many of the of the measures will check to see how often doctors follow basic medical approaches. At least at the start, physicians will be able to select which of Medicare’s measures they want to be judged by. In determining bonuses and penalties, the government also plans to take into account how much each doctor’s average patient costs Medicare, in order to encourage a more judicious use of testing and more aggressive efforts to avert hospitalizations.

Many hospital and medical groups have been advocating for Congress to repeal the provision over fears that the two percent penalty will harm doctors, while the two percent bonus will not provide enough incentive. Groups are also watching movement on the fight to repeal the Sustainable Grown Rate formula, which is supposed to calculate the annual payment rate before the penalties and bonuses. Congress passes a “patch” each year to avoid the SGR cuts.

The original article by Kaiser Health News in collaboration with The Washington Post can be found here.