Is CMS Making a Major Blunder on Physician Payment? Why Physician Group Leaders Are So Concerned

Aug. 2, 2019
Are federal healthcare officials making a major blunder when it comes to physician payment changes? Why the association representing the most advanced medical groups is speaking out

Are federal healthcare officials making a major blunder when it comes to physician payment changes? One could argue the point either way, but the fact that major medical associations are protesting the proposed calendar year 2020 changes to the physician fee schedule under the Medicare program announced on July 29, speaks volumes—and senior officials at the Centers for Medicare & Medicaid Services (CMS) should be taking note.

As reported by Managing Editor Rajiv Leventhal on that date, “Quality Payment Program (QPP) under MACRA (the Medicare Access and CHIP Reauthorization Act of 2015) by streamlining the program’s requirements. The proposal calls for a simpler way for clinicians to participate in CMS’ pay-for-performance program, the Merit-based Incentive Payment System (MIPS), which is one of two payment tracks within the QPP. This new framework, called the MIPS Value Pathways (MVPs), beginning in the 2021 performance period, would move MIPS from its current state, which requires clinicians to report on many measures across the multiple performance categories, such as Quality, Cost, Promoting Interoperability and Improvement Activities, to a system in which clinicians will report much less, CMS officials contend.”

As Leventhal noted in his report, “Under MVPs, clinicians would report on a smaller set of measures that are specialty-specific, outcome-based, and more closely aligned to Alternative Payment Models (APMs). MVPs will connect activities  and measures from  the four existing MIPS performance  categories that are relevant  to the population they are caring for a specialty or medical  condition, according to CMS.”

The medical association that went the furthest in stating its concerns was the Alexandria, Va.-based American Medical Group Association (AMGA). “Based on initial review of the proposed CY 2020 Revisions to Payment Policies under the Physician Fee Schedule, AMGA is concerned that the estimated program year payment adjustments for the 2020 Merit-based Incentive Payment System (MIPS) do not reflect congressional intent or provide reimbursement that is commensurate with the investments that AMGA members made in response to the Medicare Access and CHIP Reauthorization Act (MACRA). As authorized by MACRA, providers have the opportunity to earn an adjustment of up to 9 percent on their Medicare Part B payments in 2022 based on their 2020 performance,” the association stated on its website. “However, as indicated in today’s proposal, the Centers for Medicare & Medicaid Services (CMS) estimates the overall payment adjustment will be 1.4 percent.” And, it added, “In light of this significantly reduced adjustment, AMGA is concerned that MIPS is no longer a transition tool to value-based care, but instead represents a regulatory burden that does not support physician group practices and integrated systems of care that are investing in delivery models based on care coordination and improving population health. In addition, this adjustment undermines the intent of Congress to use MACRA to move the healthcare system to value-based payment.”

Anders Gilberg, vice president for the Englewood, Colo.-based Medical Group Management Association (MGMA), was more restrained, describing the rule overall as "mostly status quo." In an interview with MedPage Today, Gilberg said the fact that the conversion factor has "remained flat" for several years and increased only a nickel from 2019 is a frustration for MGMA members who feel the fee schedule isn't keeping up with the cost of practice inflation.

And, in a statement shared with state medical societies (and published here on the website of the Medical Association of Georgia), the American Medical Association (AMA) had a mix of positive and negative things to say. “In the AMA’s view, an MVP-type approach could be a turning point for the program because an option that ties MIPS to episodes of care has the potential to be more clinically relevant, less burdensome, and a stepping-stone to alternative payment models,” the AMA statement read. But, it added, “We do have concerns with several specific aspects of MVP that CMS has proposed, such as a return to the use of controversial population health administrative claims measures that the AMA successfully fought to eliminate from the initial MIPS program. The AMA will work closely with the state medical and national specialty societies to address these concerns and provide detailed recommendations to ensure MVP is a practical solution to the problems with the current MIPS program.”

Indeed, the AMA mostly focused on the potential for administrative burden relief, with a statement posted to its website and attributed to AMA president Patrice A. Harris, M.D., that said, “The American Medical Association (AMA) greatly appreciates that Administrator Seema Verma and the Centers for Medicare and Medicaid Services (CMS) are proposing policy changes that prioritize patients over paperwork and let doctors be doctors. While the AMA continues to assess the full scope of the proposed Medicare payment schedule rule,” Dr. Harris stated, “we are pleased to see important policy revisions that will bring us closer to a more patient-centered health care system that promotes the key principles of affordability, accessibility, quality and innovation.”

Changing the terms of engagement?

In an interview with me on July 30, the day after the CMS announcement of its proposed rule, Chet Speed, the AMGA’s chief policy officer, explained his association’s concerns very clearly and succinctly. “When MACRA [the Medicare Access and CHIP Reauthorization Act of 2015] was originally passed, our members looked at MIPS [the Merit-based Incentive and Payment System, under the MACRA law],” Speed told me. “Everyone focused on MACRA as a transition tool to APMs[advanced payment models] , but when we looked at MIPS itself, it was clear that it was quite a significant transition tool, because you went from 4 percent to 9 percent by 2022 in terms of upside and downside risk under MIPS. So member leaders said, we’ll actually do really well [under MIPS]. Everyone looked at APMs as risk transition programs—ACOs [accountable care organizations], Next Gen the Next Generation ACO program under Medicare]. But MIPS had significant levels of upside and downside risk also, from 4 to 9 percent. So when you look at 2022, with at-risk payment changes of up to 9 percent upside-downside, that’s as significant as participating in an APM.”

As a result of that analysis of the original MIPS framework, Speed told me, “[M]embers felt, we can make these investments, but because the upside is really strong, we’ll be rewarded for the investments we make, if we do well. But what has happened is that CMS has excluded just under half of eligible clinicians; and because MIPS is budget-neutral, some clinicians have to do poorly for others to do well [in terms of reimbursement adjustments, up or down]. And what they said yesterday was, there’s a high of plus 9 percent in 2022. And CMS estimates now you’ll only be able to make 1.4 percent more, rather than the anticipated 9 percent. The statute had said you could make up to 7 percent, and last year, CMS said, you’ll get 2 percent, tops.”

In other words, Speed said, “[M]embers went into MIPS [the Medicare Shared Savings Program] believing they could do well. So there’s a tremendous sense of disappointment among members right now, given that the rewards are dwindling to virtually nothing. So there’s a tremendous sense of disappointment that this program has not lived up to its promise.”

And that sentiment is significant, really—quite significant. Indeed, its significance is intensified by the fact that the strongest statement on this has come from AMGA, which is composed of the largest, most advanced multispecialty medical groups. This is the association whose member groups participated in the Medicare physician payment pilot whose framework led to the ACO (accountable care organization) clauses under the ACA (Affordable Care Act), and whose members eagerly joined the Pioneer ACO Program, before that program was shut down by CMS a few years ago.

And what happens if AMGA member physician groups become genuinely discouraged? CMS Administrator Seema Verma continues to speak publicly about how she and Health and Human Services Secretary Alex Azar want to push physician groups and hospital-based organizations faster into two-sided risk, but the grumbling among providers is growing louder and louder now, as some of their moves, particularly CMS’s January 10 announcement that ACO leaders would have only until February 19 to submit their proposals to the agency to participate in the Pathways to Success part of the Medicare Shared Savings Program. That announcement drew a sharp rebuke from NAACOS, the National Association of ACOs, which noted that many of its member ACOs would simply not be able to analyze their data satisfactorily to make the decision as to whether to participate, given the complexity of the targets and models involved.

So, this week, we saw CMS basically stating that the original terms of participation in MIPS would now be altered considerably; and earlier this year, a series of announcements from CMS around ACO participation, struck many providers as high-handed and short-sighted. Are these moves on the part of the agency a harbinger of things to come?

I fully understand that senior healthcare officials are dealing with a very complex and challenging landscape right now. At the same time, their seeming tone-deafness to provider concerns is, well, concerning. It is very significant that CMS is creating disturbance among the leaders of the most advanced physician groups. Of all the organizations in U.S. healthcare, it is those organizations whose leaders CMS officials should be most carefully and assiduously cultivating.

Only time will tell how all of this will play out; but we’ve seen a series of what could be called missteps, in recent months, around federal policy and payment issues, especially around ones of fundamental importance to advanced physician group leaders. Is all of this a sign of things to come? Or can CMS officials find a way to meet providers at least halfway, in order to achieve the goals that they themselves have framed publicly? Only time will tell.

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