Is the SGR Replacement Almost Here?

Kenneth J. Terry, MA


March 14, 2014

In This Article

Alternative Payment Models

The legislation offers an alternative to the MIPS: Physicians who received a certain percentage of their revenue from an alternative payment model (APM) would be exempt from most MIPS provisions and would also receive a 5% annual bonus from 2018 to 2023. After that, eligible professionals participating in an APM would receive a 1% annual bump in their Medicare reimbursement, whereas those in the MIPS would get a 0.5% yearly raise.

The alternative payment models are not clearly defined in the legislation, but must be entities in which eligible professionals take financial risk. The bill refers to the Medicare shared-savings program for Accountable Care Organizations (ACOs), and observers agree that ACOs would be considered APMs. There's also a reference to a Medicare demonstration of bundled payments to hospitals, so it seems likely that APMs would include bundling arrangements.

To qualify as an APM participant, physicians would have to receive at least 25% of their Medicare reimbursement through an APM in 2018 and 2019. The threshold would rise to 50% in 2020 and 2021 -- and, starting in 2022, would increase to 75%.

In both the MIPS and the APM programs, physicians would have to use certified EHRs and meet the meaningful use criteria. Farzad Mostashari, the former National Coordinator of Health IT, told Modern Healthcare that the MIPS would in effect extend Medicare's meaningful use incentive payments, which will end in 2016 under current law.[3]

Other provisions of the bill would require:

The Centers for Medicare & Medicaid Services (CMS) to collect information from practices to identify potentially misvalued services. That analysis could lead to a redistribution of a small percentage of Medicare payments;

The use of clinical decision-support tools to determine the appropriateness of imaging tests; and

The publication of MIPS quality and resource use data on CMS' Physician Compare Website.


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