The administration is certainly laying out a plan for the post-SGR period. With the Medicare Access and CHIP Reauthorization Act of 2015 passed, the Medicare program will be moving towards two new payment systems by year 2019. Of these systems, the Merit-based Incentive Payment System (MIPS) mixes the current three Medicare quality programs inside a single system where providers will report quality data, based on their performance. The second system allows providers to fully or partially participate in Alternative Payment Models (APM). Some of these already exist, but MACRA also allows the development of many new versions.

These efforts are being aided by a partnership of public and private stakeholders, which advises the agency on the how the transition should move forward. Called the Health Care Payment Learning and Action Network (HCPLAN), this partnership has been working to frame a new look for APMs on white paper. Last month, HCPLAN let out its final “deliverable” version in white paper. It is still unclear how this paper will affect those in the process of developing APMs.

As described in the paper, APM is essentially a payment methodology that is a not-fee-for service, and brings a system that lets you measure care quality, also tying this to financial risk or gain sharing of some sort. The broad definition allows many different forms of new payment models. The paper allows classification into four different categories of payment models.

APMs are majorly required to foster collaboration among healthcare professionals who provide comprehensive care management, and not the soloed approach. The hospital Prospective Payment System lets hospitals pay based on the patient’s diagnosis. Now CMS seeks to expand the model to include follow-up care subsequent to creating a “Super DRG” payment. This could be beneficial to hospitals because they cannot bring all providers under a single entity. This kind of system would be hard to implement outside of a hospital, each physician practice being its own entity.

ACOs are a way to bring this more than one entity under a single cover. The new APMs will also need a mechanism for getting physician practices to work together and provide care, as well as to share risk or savings. Based on this model, this could bring major operational and administrative challenges to a practice. Currently, MACRA strongly encourages participation from providers.

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