The Obama administration has revealed a new system for delivering Medicare payments that is aimed at paying doctors based on the care they provide.
The administration issued a final rule Friday that implements the Medicare Access and CHIP Reauthorization Act of 2015, a bipartisan law that repealed what both parties agreed was a flawed Medicare payment formula.
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The rule will let doctors choose between two options to get Medicare payments. The first option gives doctors more money in exchange for providing better care to patients. The second option rewards doctors that for joining organizations that get paid for keeping people healthy, such as the accountable care organizations created under the Affordable Care Act.
“When they get better health results and reduce costs for the care of their patients, the clinicians receive a portion of the savings,” according to the Centers for Medicare and Medicaid Services.
The new system will take effect next year, when CMS estimates it will pay out $1 billion in bonuses to doctors for delivering high quality care in both tracks. Doctors will also see a payment adjustment of a half a percent.
CMS officials said it attempted to streamline the reporting burden for both tracks, as a common complaint from some lawmakers was that doctors in the current system can be deluged with paperwork.
“I think everyone well understands that we want our clinical community to be able to spend as much time as possible with patients,” said Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services.
The agency also sought to ensure that smaller, rural practices could participate in organizations that resemble the accountable care organizations (ACOs), as it can be hard for smaller practices to find such an option.
In 2018, it will implement a new ACO model that gives clinicians more flexibility to participate, CMS said.
The rule implements the 2015 law that replaced the much-maligned sustainable growth rate formula, which would have installed deep cuts to Medicare payments had Congress not intervened.
Republicans were cautiously optimistic that the rule would improve the Medicare payments system.
“While the rule must be carefully studied and examined in its entirety, this is an important step forward in the process,” said Sen. Orrin Hatch, R-Utah.
