SGR Is Gone! But Now What?

June 24, 2015
C. Matthew Hawkins, MD

It’s not time to celebrate yet.

It happened. On April 16, 2015 to be exact. The tyrannous reign of the Sustainable Growth Rate formula came to an abrupt end. It is hard to believe two months have passed already – but, the well-publicized, effusive celebrating, thanking, and back-patting have certainly made the time fly. I guess we can all rest easy, now that the SGR’s annual 25% reimbursement cut threat has been eliminated from our political action committee agendas. 

Or not. 

It turns out that the SGR was only sort of repealed. More accurately, it was replaced. The new payment systems proposed by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) are complex, incentivized, value-driven, and in many instances – vague. For radiology groups, important decisions will need to be made regarding which payment system to participate in. For national societies, influencing what metrics their respective specialties should be measuring will be paramount. Despite the satisfaction gleaned from SGR’s destruction, meaningful action is needed now to appropriately position radiology in the new reimbursement milieu.

Fortunately, the authors of MACRA were kind enough to give physicians a three-and-a-half year cushion before new payment models kick in. From July 1, 2015 until 2019, current Medicare physician reimbursement will be annually updated by 0.5%. (Note that payment penalties from PQRS and other incentive programs still apply during this time, though.) But starting in 2019, physicians will have two reimbursement pathways to choose from: 1) Alternative payment models (APM), and 2) the Merit Based Incentive Pay System (MIPS). What does this mean for radiology?[[{"type":"media","view_mode":"media_crop","fid":"38950","attributes":{"alt":"","class":"media-image media-image-right","id":"media_crop_3772578526259","media_crop_h":"0","media_crop_image_style":"-1","media_crop_instance":"3911","media_crop_rotate":"0","media_crop_scale_h":"0","media_crop_scale_w":"0","media_crop_w":"0","media_crop_x":"0","media_crop_y":"0","style":"height: 200px; width: 200px; float: right;","title":"©nikolarisim/Shutterstock.com","typeof":"foaf:Image"}}]]

APMs include existing models such as ACOs, patient-centered medical homes, and other CMS Innovation Center programs. However, “eligible” APMs also include health care entities that use certified EHR technology, pay physicians using quality measures, and bear financial risk. To complicate matters further, in order to be a “qualifying APM participant” beginning in 2019, the aforementioned criteria are required PLUS at least 25% of Medicare payments must be received via APMs. Why might one care about becoming a “qualifying APM participant”?  Because between 2019 and 2024, “qualifying APM participants” will receive a 5% bonus of total Medicare Part B payments, which is paid directly to physicians. Sounds pretty good, huh?  Furthermore, beginning in 2025, Medicare payments for providers participating in “qualifying APMs” will receive 0.75% annual updates. (This is compared to only 0.25% annual updates for those participating in the MIPS model. More to come on that later.) 

I say we all scurry around and start developing some bundled payments for imaging! Five percent bonuses! Annual updates 200% above the alternative reimbursement model! Eureka!

Not so fast.

It turns out that the feds are going to annually increase the required percentage of Medicare payments obtained through APMs in order to qualify for APM bonuses. In 2023, 75% of Medicare payments will be required through alternative models in order to qualify for the 5% bonus. (Rather than the meager 25% necessary in 2019.) For a specialty like radiology, which is intimately involved in many organ systems, illnesses, and multi-disciplinary teams – earning 75% of all Medicare payments through APMs may be an unrealistic expectation.

So what happens if your group is not eligible for APMs? 

Well, you’re eligible for MIPS. But, what is MIPS?

Imagine melding together the key elements of the Meaningful Use (MU), Physician Quality Reporting System (PQRS), and the Value-based Payment Modifier (VBM) programs – and then unnaturally combining these programs with the existing RVU payment model through some miraculous, catalytic, nuclear fusion process. That is MIPS. 

Performance/compliance with MU, PQRS, VBM, and clinical practice improvement activities (yet to be defined) are added together to give each individual provider a composite score from 1 to 100. Based on that provider’s composite score, the total Medicare payments received that year are adjusted, up or down, by a certain percentage. By 2022, the payment incentive will be as high as 9% – and penalty as steep as -9%. And as I mentioned earlier – the MIPS reimbursement is updated by only 0.25% per year beginning in 2025.

So – if your group participates in an ACO, has met MU criteria, and reports PQRS – you are likely to get a favorable MIPS reimbursement. But if your group aims to participate in APM reimbursement and doesn’t qualify – AND you did not measure and report necessary metrics for MIPS – then your group is subject to the harshest MIPS penalty.  The bottom line is that all groups should report MIPS metrics even if aiming for APM qualification.

Clear as mud, right?

The last thing to consider is that all of the “quality” measures that will be used to measure “value” are in a primitive state, to say the least. CMS must release a draft plan for these quality measures by January 2016. These measures are to be prioritized by 1) outcomes, 2) patient experience, 3) care coordination, and 4) appropriate use of services. Simply stated – our national societies and organizations must respond nimbly and offer appropriate measures to CMS prior to January 2016. Time is of the essence. 

Moving forward, CMS must update the list of MIPS quality measures annually, and new quality measures must be published in a specialty-appropriate peer-reviewed journal prior to being finalized. While these are encouraging stipulations, it will require our professional engagement at a national policy-making level.

So hooray – the SGR is gone. And we’re left with three options:  1) Pretend we don’t know that APMs and MIPS are coming and then wage a war to delay implementation (a la ICD-10), 2) Begin immediately pushing for repeal (see recent SGR repeal), or 3) Embrace the opportunity to define the metrics that demonstrate real value that we provide for patients and discover new ways to efficiently care for diseases that are appropriate for bundled payments.

Which will it be?

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