Usually, Medicare payment systems are based on a fee-for –service payment structure. The Fee-for –service payment structure represents a payment program whereby health institutions receive money from Medicare as per the number of times or periods that care is provided to patients, irrespective of the actual amount of care provided. As such, the amount of payment that is made to hospitals by insurance schemes is heavily dependent on the type of diagnosis that has been made with respect to the patients. To this end, health facilities have at times been overburdened by costs, especially in cases whereby the payments made poorly correlates with the amount of patient care rendered. Such like hospitals are forced to cover losses in the form of the cost above that which has been covered by insurance schemes using their own investments. The Medicare payment structure has further, established an inbuilt payment bias that obviously exists in favor of specialist and against general medical practitioners amongst them nurses. Subsequently, this has acted to dissuade the general practice of medicine. In order to circumnavigate this challenge, hospitals resorted to making severe diagnoses so as to hedge themselves against unplanned costs (Skinner, 2004). The introduction of the Affordable Care Act of 2010, more commonly known as the Obamacare, was done in order to increase contributions to public Medicare schemes and also, so as to help cushion hospitals from accruing losses due to their medical operations. This, however, has been characterized by a lot of resistance on the part of some cross-sections of the American citizenry, leading to the adoption of another act, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This act is intentioned towards regulating Medicare payment and has shifted focus from the fee-for-service payment structure to the desired payment-for-performance structure. This essay is going to assess how the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) have reformed Medicare payment plus the available alternative payment models (APMs)
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), has reformed Medicare payment in three ways. Firstly, it has repealed the formula (the sustainable growth rate (SGR) formula) which Obamacare had used to calculate cuts in payments of professional medics and instead, has provided predictable payment increases. This act has put an end to the SGR, and as from 2015 through to 2025, physicians will receive stable, well-adjusted payments. However, as from 2026, the payment regime will change in order to conform either to a new Merit-based Incentive Payment System (MIPS) or to an advanced Alternative Payment Models (APMs) (The American Hospital Association, 2016).
Delegate your assignment to our experts and they will do the rest.
The second way through which this act has reformed Medicare payment relates to the fact that it has created a new payment structure, and this ensures that payment is based on a performance and not on a fee-for-service structure. Such like a system will reward physicians for having provided superior or quality care to patients, hence, will make Medicare better, seeing as the medical focus will be redirected to the provision of patient care (Center for Medicare and Medicaid Services, 2016). The act provides health facilities with two quality payment programs from which they can choose. These are the Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Models (APMs). The MIPS is based on a fee-for-service model but with a direct link to superior performance, and will be operationalized as from 2019. MIPS will be the default payment structure for health practitioners. Physicians will receive assessment based on four performance categories; quality resource use, practical clinical improvement activities and commitment to the advancement of patient care information. This assessment will be followed up by payment adjustments. In 2019, the payment adjustment will be restricted at +or- 4% and the limit will be increased to + or – 9% in 2022 and in the successive years.
The act also creates room for physicians to partake in APMs, hence, reforming Medicare from a fee-for-service to a payment system, linked with patient outcomes.
As from 2019, the APM will allow physicians to receive part of their payment (0.75%) through advanced APMs that will be exempted from most of the MIPS requirements. By 2024, physicians should have received a payment increase of 5% of their provided services, basing on their performances in the previous year. The models which are to be included under the Medicare will first have been examined by the Center for Medicare and Medicaid Innovation . These include the Medicare Shared Saving Programs (MSSP), the Oncology Care Program and the Comprehensive End-Stage Renal Disease Care Model. These models must all use qualified and approved HER technology. Also, the models must provide a payment system that’s premised upon quality measures similar to those used as per the MIPS quality grouping. Finally, the model must have a financial risk management system (a downside risk) that exceeds the supposed amount of monetary loss or should be a medical home which meets specific conditions. To be specific, the APMs will be expected to reimburse Medicare if their expenditure exceeds a projected amount.
Last but not least, the new act reforms Medicare payment by combining three current reporting programs, which are the value-based payment modifier, the meaningful use, and the physician quality reporting systems into one structure, using the MIPS. Other quality performance features are also added to the new structure. This act will affect not only physicians but also public hospitals plus the different health system apparatus which act in partnerships with medical care providers.
References
Center for Medicare and Medicaid Services (2016). Delivery System Reform, Medicare Payment Reform. Retrieved from https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html
Skinner, S. (2004). Medicare upcoding and hospital ownership. Journal of Health Economics, 23:369–389
The American Hospital Association (2016). Physician payment reforms under the MACRA. Retrieved from http://www.aha.org/content/16/16macraissuebrief.pdf
