You may have heard that a transformation of Medicare’s physician payment program is in the works.  However, you may not know that the structure of the new program, called the “Quality Payment Program”, has been finalized and will begin its first reporting year on January 1, 2017.  Now is the time for you and your practice to get up to speed on the new Quality Payment Program.  This post is the first in a new Blog Series that we will be publishing on Fox Rothschild’s Physician Law Blog to help you and your practice prepare for Medicare’s Quality Payment Program.

In October, the Centers for Medicare and Medicaid Services (CMS) issued a Final Rule setting forth the structure of the Quality Payment Program and the parameters for its first year of operation.  The purpose of the Quality Payment Program is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  The Quality Payment Program will consolidate the existing Medicare incentive programs (which include the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program), along with a new program incentivizing clinical improvement activities, into a single payment program that will either reward or penalize physicians by adjusting their reimbursement rates under the Medicare Physician Fee Schedule.

In each reporting year under the Program, physicians will be required to qualify for one of two (2) payment tracks:  (1) the Merit-Based Incentive Payment System (MIPS); or (2) the Advanced Alternate Payment Model (Advanced APM) model.  The MIPS is the default payment track, and will be the track used by most physicians over the next five years.  Qualification for the Advanced APM model requires participation in a CMS-approved Advanced APM.  The long-term goal of CMS is for most physicians and practices to participate in Advanced APMs.

While calendar year 2017 will be the first reporting year under the Quality Payment Program, payment adjustments for physician performance in 2017 will not be made until the 2019 calendar year.  This two-year gap between reporting and payment adjustment has been carried over from the existing incentive programs and may eventually be shortened.  However, for now, the gap will allow a smoother transition from Medicare existing incentive programs, which have collected data over the last two years for incentive payments in 2017 and 2018, respectively.  To be clear, incentive payments based on data reported under existing incentive programs in 2015 and 2016 will still be made.

The good news is that CMS has eased the reporting requirements for the first year of the Program.  For example, no physician will be required to begin collecting data in accordance with the Program’s requirements on January 1, 2017.  To receive a neutral or positive adjustment to reimbursements in 2019, physicians will need to report data and perform certain practice activities for a 90-day performance period during the year.

Stay tuned to the Physician Law Blog for upcoming posts on what you and your practice need to know about the Quality Payment Program (QPP).  The next posts in the QPP Blog Series will be:

  1. Basics of the MIPS and How to Qualify in 2017
  2. Basics of Advanced APMs and How to Qualify in 2017
  3. Details of the MIPS Scoring System

In the interim, if you would like to learn more about the QPP, we encourage you to check out the excellent website CMS has developed on the QPP, which can be found at this link:

As always, if you have questions regarding the applicability of the QPP to you and your practice, we advise you to consult with a knowledgeable attorney.