How new Medicare regulations mean better pay for doctors

February 1, 2017 by Medigroup

As Managed Care magazine explained, the issue of doctors receiving payment has always proven rather complicated. Many physicians across the country feel as if the system that’s been in place for years doesn’t always work effectively, and that doesn’t leave them ample cash for the basics of running their office (paying support employees, investing in tools and other infrastructure, etc.)

Medicare has been a regular source of frustration for many physicians’ groups. According to Modern Healthcare, doctors receive only a portion of the money via Medicare. For a $70 visit, Medicare covers approximately $49, with doctor’s offices dealing with patients and insurers for the remainder.

However, with a series of changes within key Medicare rules and guidelines, some of those reimbursement issues may soon change.

“Doctors will be incentivized with bonuses to engage with high-needs patients.”

Encouraging greater engagement

As NBC News reported, the changes in question have to do with a series of new regulations that modify current doctor pay. The changes, which went into effect on Jan. 1, 2017, are meant as a kind of course correction for doctors who feel as if they’re not adequately paid for more time-intensive tasks. That could be interactions with pharmacists, bringing specialists into the fold or communicating and plan-building with a patient’s family.

Under the new regulation, doctors will be incentivized with larger reimbursement rates for engaging with these so-called “high-need” patients. And as data has shown in recent years, these patients – those with chronic conditions or coping with disability – are especially costly. In fact, according to The Commonwealth Fund, while similar high-needs individuals make up just 10 percent of patients, they account for 65 percent of the total health spending.

Bonuses galore

So, just what will this new payment system actually look like as it begins to roll out over the next few years? According to Real Clear Health, there are a few important factors having to do with so-called alternative payment models. Doctors who do not participate in these larger health organizations may face penalties of up to 4 percent from what they can bill to Medicare. Those who do participate – and have to implement and report certain quality measures for high-needs patients – earn a series of small bonuses. Both the bonuses and penalties jump to 5 percent by 2020, and eventually reach 9 percent in 2022.

Additionally, payments are also set to be more generous than in the past. For instance, “complex chronic care management” can average as much as $93.67 for one hour, and $47.01 for every subsequent half hour. Other adjustments include enhanced payments for cognitive impairment assessment (up to $238.30 for the first session), and the ability to bill $113.41 for providing care between standard office visits.

Battling red tape

In spring 2016, as the regulations were being finalized, the American Medical Association released a statement in support of the new Medicare regulation. The AMA’s president, Dr. Steven J. Stack, wrote that while the system is promising, it does need one essential component:

“There needs to be relevant to the real-world practice of medicine and establish meaningful links between payments and the quality of patient care, while reducing red tape.”

While a lot of that falls on the folks at Medicare and CMS, it’s still up to doctors to ensure that essential link Stack described. The new system is meant to encourage a greater scope of coverage for patients, and an emphasis on prolonged contact and communication. Either way, the AMA and other physician’s groups feel as if the new regulations are a huge step forward in better addressing the nuanced issue of reimbursement.