Newtown, CT – February 7, 2014
Boy have I got a deal for you…Behind door #1 is a non-negotiable complex formula defined by the government that will yield a single "value" score of your performance, and behind door #2 is a negotiable deal of your own making. Which one will you pick? Methinks that most folks with M.D, D.O., and other such initials behind their names will figure out this brain teaser. And I'm pretty sure that's what the sponsors of the SGR repeal bill are thinking as well. For the first time in the history of the Medicare program it will be more hazardous to be paid fee-for-service than with alternative payment models. Those that stay in FFS will be subjected to a new über value metric concocted with a blend of PQRS, the still-to-be-defined value-based modifier, and Meaningful Use. Each clinician will be compared to peers and indexed to the average; those above will get a fee schedule increase, and those below…not so much!! However, and this is the big news, those whose revenue depends in good (and growing) part on alternative payment models such as bundles or ACO arrangements, will not only be exempt from the random results of the über measure, but will actually get a fee increase. Those accepting these new payments will have to take downside risk, not simply upside, but that's only fair. Importantly, the percentage of practice revenue in new payment models doesn't have to simply come from Medicare, it can come from Medicaid and private sector payers. Either way you cut it, the world of Medicare payment will become far riskier, but at least door #2 offers the opportunity to know that risk up front and to manage it.
What this means to you – An investigative series on the percentage of delayed newborn screenings published in November and recently updated reminds us of the critical imperative to stop the nonsense of fee-for-service medicine in which providers worry more about the specific service billed than the episode of care that matters to the patient. Combine that with a report by the NY State Health Foundation on the costs of care in that state showing that prices are way above average an crushing middle class families and employers, and we all know the time is way past to change business as usual. And unbelievable as it may seem, the do-nothing crowd in DC has finally decided to act. The private sector, of course, hasn't waited but rather shown the way. Just this week, for example, BCBS of NJ announced a statewide bundled payment initiative for pregnancies and deliveries. This comes in addition to several other new alternative payment model initiatives by that plan, responding to a growing demand of physicians and hospitals. And these are risk-sharing deals, not simply upside. The deal in Congress isn't complete yet, but if it gets done, then my guess is that the rush to door #2 will be deafening.