Health Care Legislative and Regulatory Update

Obama signs Medicare Access and CHIP Reauthorization Act of 2015 into law

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

Just hours ago, President Obama signed into law the “Medicare Access and CHIP Reauthorization Act of 2015,” which permanently repeals the long-maligned Sustainable Growth Rate (SGR) payment formula.

In other words, physicians no longer need to worry about that 21% Medicare payment cut that went into effect on April 1 (but that CMS had delayed for 2 weeks). It is gone, and it will not come back, hopefully, ever again.

The new law, which is being referred to as “MACRA,” makes significant changes to the way Medicare will pay physicians in the future, with an emphasis on quality, value and taking more financial risk. But, most of the changes are not slated to take effect until 2019. In the meantime, it is largely business as usual.

For any Medicare claims submitted from January 1, 2015, to June 30, 2015, Medicare will pay a 0% update. In other words, the rates in the first half of 2015 are the same as the rates were in 2014. Under the new law, for services provided between July 1, 2015, and December 31, 2015, the update will be 0.5%. In 2016, 2017 and 2018, the same thing will occur — there will be a 0.5% update each year.

Jennifer B. Madsen

But, other changes to the payment system are happening at the same time, which complicates the picture. Two Medicare incentive programs, the Physician Quality Reporting System (PQRS) and the meaningful use of electronic health records program, have been paying bonuses but are now switching to penalties. Also, CMS has been phasing in the Value Modifier, which will adjust payments to all physicians starting in 2017, based on quality and cost metrics.

In 2019, the MACRA will combine these programs into one new program called the Merit-Based Incentive Payment System (MIPS). And there is an alternative to the MIPS with slightly higher payments if you participate in certain Alternative Payment Models or APMs. 

Over the coming 2 weeks, we will break down the core issues of the MACRA into a series of focused issue-specific blogs. Each blog will provide the key information physicians will need to know to ready themselves for the new world order of Medicare payments.

Jennifer B. Madsen, MPH, is Health Policy Advisor for Arnold & Porter LLP’s FDA and Healthcare practice group. She can be reached at email: jen.madsen@aporter.com.

Allison Shuren is Partner at Arnold & Porter LLP and is in the FDA and Healthcare practice group.

From international law firm Arnold & Porter LLP comes a timely column that provides views on current regulatory and legislative topics that weigh on the minds of today’s physicians and health care executives.

Just hours ago, President Obama signed into law the “Medicare Access and CHIP Reauthorization Act of 2015,” which permanently repeals the long-maligned Sustainable Growth Rate (SGR) payment formula.

In other words, physicians no longer need to worry about that 21% Medicare payment cut that went into effect on April 1 (but that CMS had delayed for 2 weeks). It is gone, and it will not come back, hopefully, ever again.

The new law, which is being referred to as “MACRA,” makes significant changes to the way Medicare will pay physicians in the future, with an emphasis on quality, value and taking more financial risk. But, most of the changes are not slated to take effect until 2019. In the meantime, it is largely business as usual.

For any Medicare claims submitted from January 1, 2015, to June 30, 2015, Medicare will pay a 0% update. In other words, the rates in the first half of 2015 are the same as the rates were in 2014. Under the new law, for services provided between July 1, 2015, and December 31, 2015, the update will be 0.5%. In 2016, 2017 and 2018, the same thing will occur — there will be a 0.5% update each year.

Jennifer B. Madsen

But, other changes to the payment system are happening at the same time, which complicates the picture. Two Medicare incentive programs, the Physician Quality Reporting System (PQRS) and the meaningful use of electronic health records program, have been paying bonuses but are now switching to penalties. Also, CMS has been phasing in the Value Modifier, which will adjust payments to all physicians starting in 2017, based on quality and cost metrics.

In 2019, the MACRA will combine these programs into one new program called the Merit-Based Incentive Payment System (MIPS). And there is an alternative to the MIPS with slightly higher payments if you participate in certain Alternative Payment Models or APMs. 

Over the coming 2 weeks, we will break down the core issues of the MACRA into a series of focused issue-specific blogs. Each blog will provide the key information physicians will need to know to ready themselves for the new world order of Medicare payments.

Jennifer B. Madsen, MPH, is Health Policy Advisor for Arnold & Porter LLP’s FDA and Healthcare practice group. She can be reached at email: jen.madsen@aporter.com.

Allison Shuren is Partner at Arnold & Porter LLP and is in the FDA and Healthcare practice group.

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