• Alternative payment models in the SGR fix

    A few weeks ago I threw some cold water on the SGR fix, noting that Congress faced hard choices on how to pay for it. On a more optimistic note, Mark McClellan, et al. describe in JAMA a potential 5 year SGR fix as a bridge to long-term payment reform. (Aaron’s take on this article is here)

    More interesting to me are the “alternative payment” methods in the bipartisan SGR fix bill. While details are thin, these models seem to be patterned on the alternative quality contracts in Massachusetts, gradually delinking physician payment from volume and intensity of services and procedures. From the JAMA article:

    The most fundamental change in the legislation is to give physicians an option to leave the traditional Medicare fee-for-service system behind. Physicians can receive bonuses of up to 5% per year from 2017 to 2022 for transitioning to “alternative payment models” in which payments are increasingly related to value defined as measured quality and total cost of care. In contrast, fee-for-service rates will be flat (0% annual increase). The alternative payment model must account for an increasing share of a physician’s practice, rising to more than 75% in the next decade. While the details of the alternative payment models are not clear, the alternative payment would generally involve augmenting or replacing some of the current fee-for-service payments with a patient-level payment amount not related to volume or intensity. To receive full payment in the alternative payment arrangement, physicians would have to meet meaningful measures of quality of care. Qualifying alternative payment systems must not increase overall Medicare costs.

    Another good reason to track the Massachusetts Health Policy Commission’s work on alternative payment models under Ch. 224.

    @koutterson

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