Background
Since the late 1980s, Medicare has reimbursed physician services using the Medicare Physician Fee Schedule (MPFS), which encompasses 10,000 procedure codes. Each code is assigned resource-based relative value units (RVUs), which are designed to reflect physician work, practice expense, and malpractice expense. To adjust for local differences in cost of living, each RVU is modified using geographic practice cost indexes (GPCIs) and then converted to dollars using a “conversion factor.” This system rewards physicians who produce a high volume of services; not surprisingly, Medicare Part B expenditures have grown rapidly.
In FY 1998, the SGR was introduced as an attempt to better manage this spending growth by taking into account several factors, including the expansion of the overall economy. However, because this system didn’t fundamentally change the economics of the program, it did not achieve its original objective.
With enactment of the Medicare Modernization Act (MMA) in 2003, Medicare began moving toward value-based payments, and the introduction of Affordable Care Act (ACA) in 2010 meant that Medicare accelerated its use of value-based payments as a means of improving outcomes and managing overall costs (Wofford, 2015).
The care delivery enterprise must be re-tooled so that it functions in a fee-for-value reimbursement environment as is has in a fee-for-service reimbursement environment. The Centers for Medicare and Medicaid Services (CMS) is leading the
The Improving Medicare Post-Acute Care Transformation Act (IMPACT) standardizes data collection and data sharing among post-acute providers. The IMPACT Act is part of the Centers for Medicare and Medicaid services (CMS) effort on basing reimbursement on quality as it moves from voluntary reporting of quality measures to mandatory reporting, basing reimbursement on the data reported. Presently, post-acute providers are paid on a fee-for-service basis but with the IMPACT act, bundle payment will replace the fee-for-service. The bundle or value based payment pays for outcomes and not for the volume of services. The Act gives post-acute providers an incentive to work on
In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,
The change to value based purchasing has bought many challenges to the healthcare industry. With the change to value-based purchasing for payments, it has changed how healthcare organization receive payment and delivery care. The advantage of have value based purchasing is that it improves the quality of care while reducing cost in an effort of aligning patient’s with the right provider and treatment plan (Minemyer, Jun 29, 2016). However, there are many disadvantages, such as it increases the patient volume as counteracting the reduction of procedure volume (Brown, B. & Crapo, 2016). Also it makes providers more responsible for care that is beyond the expected treatment of care needed (Minemyer, Jun 29, 2016). With quality measures tied
Now a statute, the physician/hospital pay for quality, not quantity, public law number: 114-10 signed April 16, 2015 also referenced as H.R.2 —1st Session of 114th Congress (2015-2016), sometimes called the “Permanent Doc Fix” 04/14/2015 : Passed Senate; 03/26/2015 : Passed House (Medicare Access and CHIP Reauthorization Act of 2015, 2015), which defines the payment and reimbursement reform to doctors treating patients with Medicare. This extensive reform includes the CHIP program insuring children and those families that don’t qualify for Medicare but are unable to afford private insurance and is funded by the federal government and individual states.
On December 8, 2003, President Bush signed into law the Medicare Prescription Drug Improvement and Modernization Act of 2003 (Pub. L. 108-173). This landmark legislation provides seniors and individuals with disabilities with a prescription drug benefit, more choices, and better benefits under Medicare. It produced the largest overhaul of Medicare in the public health program's 38-year history. The MMA was signed by President George W. Bush on December 8, 2003, after passing in Congress by a close margin. One month later, the ten-year cost estimate was boosted to $534 billion, up more than $100 billion over the figure presented by the Bush administration
The Medicare Shared Savings Program was established by section 3022 of the Affordable Care Act and aims to improve beneficiary outcomes and increase the value of care by providing better care for individuals, better health for populations, and lowering growth in expenditures (Lieberman, & Bertko, 2011). The Affordable Care Act created ACOs, which is part of Medicare since January 2012, together with a Shared Savings Program it has the potential to lower costs, improve the quality of care, facilitate delivery system reform, and promote innovation in health care ( Lieberman, & Bertko, 2011).
Obtaining reimbursement for services provided is a necessity for the survival of many health care organizations. This paper will explain, in my opinion, why the Centers for Medicare and Medicaid Services (CMS) are involved in this development and how it affects the American public. I will offer a suggestion to ensure meeting policy and procedure. I will finish by discussing three ideas listed on the CMS website.
Medicare provides access to health insurance coverage for more than 45 million people who qualify due to disability or age. The three components of Medicare are Parts A, B, and D. Part A is hospital insurance and provides coverage for inpatient hospital services, skilled nursing facility services, hospice services, and post-institutional home health care. Covered services under Part B one component of supplementary medical insurance (SMI) include physician services, durable medical equipment, laboratory services, outpatient hospital services, physician-administered drugs, dialysis, and certain other home health care services. The other component of SMI, Part D, mainly provides access to prescription drug coverage through private insurance plans.
Medicaid and Medicare was created and called the Social Security Act of 1965 to provide coverage for medical treatment for qualified individuals and their families. Medicaid is a program that is jointly funded and managed by the federal and state governments that reimburse hospital and physician for providing care to qualified patients who cannot afford medical expense. To qualify for Medicaid he or she must be a United States or resident citizen which, includes low income adults and their children, people with certain disabilities and senior citizens. “Medicaid and Medicare is overlooked by the Center for Medicare and Medicaid,
The first piece of legislation (one legislation I discussion 2 pieces of that) discuss is section 101 part of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), a bipartisan legislation signed into law on April 16, 2015. This law was created to replace the current law in that time Medicare reimbursement schedule with, the revolutionary idea of new program supposed directed focus on the quality, value and accountability of the national health care program. The CMS describe MACRA as a modern system new payment framework, supposed rewarded the national health care providers to obtain the better care instead of more service, looking for value over volume. The information’s observed in the interview provides consistent points
Throughout history there have been many acts and guidelines created to try and improve quality of care. MACRA falls into this category of an act that tries to enhance the quality of care for patients under Medicare. Harry A. Sultz and Kristina M. Young, the authors of Health Care USA Understanding Its Organization and Delivery, write that quality was defined as “the degree of conformity with preset standards.” (p. 140) The new definition of quality that Harry A. Sultz and Kristina M. Young write characterizes the quality of a provider’s care as the degree to which the care delivered increases the likelihood of desired patient outcomes and reduces the likelihood of undesired outcomes. (p. 144-145) MACRA was signed into law to try and lead to better patient outcomes by paying physicians based on whether their services are successful or not. The new definition focuses on increasing desired patient outcomes and reducing undesired patient outcomes, and this relates to MACRA because MACRA tries to improve patient outcomes and tries to promote more successful treatments. Another relevant, but more specific course concept would be the Accountable Care Organization (ACO) model. Harry A. Sultz and Kristina M. Young write that the ACO payment structure shifts the orientation of patient care from a series of fee-for-service reimbursed interventions toward financial reward for maintaining patients’ health. (p.
The delivery system reform include: Mandates that the Secretary of Health and Human Services adopt value-based purchasing and payment methods for Medicare reimbursements for both physicians and hospitals. Creates incentives to reduce preventable hospital admissions. Creates a new Center for Medicare and Medicaid Innovation that will research, develop, test, and expand innovative payment and delivery arrangements. Encourages the formation of Accountable Care Organizations (ACOs) that allow hospitals and doctors to work together to manage and coordinate care and provides that these ACOs will receive a share of the savings they achieve for Medicare
The year 2017, you will notice a change moving on into place for the healthcare. If you
The Health Affairs published an article in about a proposed Medicare reform regarding the high levels of use of Medicare although there was little impact on individuals. Though this article dates back to 2002, the issue still remains true to this day. In this article, the authors explain that the high level of Medicare spending was mostly due to the increase number of physician visits, specialist consultations, and hospital stays, especially among those that had chronic illnesses. Although the spending is higher among such Medicare patients, this did not mean better effective care or health care outcomes. On the contrary, according to the article, more than 20% of the total
The positive outcomes that have resulted due to value base programs have caused the model to gain traction and ignite one of the largest changes in history in the health care marketplace. By linking reimbursements to service quality, insurers such as the Centers for Medicare and Medicaid Services have facilitated a massive leap forward in the performance of United States health care providers. This achievement is a considerable accomplishment in the face of an institution that has received reimbursement from insurers via a fee-for-service model during the last 75 years. Soon, valued based payment models will represent the norm as more insurers support initiatives such as shared savings program, integrated clinical care, and accountable care payment models.