Doctors who treat older Americans were deeply relieved after the Sustainable Growth Rate (SGR) formula was repealed in May, earlier in the year (2015). The SGR would have caused unnecessary cuts to Medicare payments which would have only hurt the physician-patient relationship. By replacing the backward payment strategy, patients under the Medicare program can now pay their physicians through advanced alternative payment solutions.
The SGR was replaced by the Medicare Access and CHIP Reauthorization Act (MACRA). This has left physicians who treat adult Americans with cancer, more than half of whom are Medicare beneficiaries, eagerly anticipating new models of care as well as Alternative Payment Models (APMs) which are now legal under the law. APMs, as believed by most physicians, provide an opportunity to focus on value and quality- rather than price and quantity – of health care. Ultimately, the benefits of such forward-focused policies will tickle to the patients as well as Medicare.
The implementation of APM could have far reaching impact. For instance, once fully implemented, the new payment strategy will allow involved parties to avoid wasteful fee-for-service payment models. The APM, as created in MACRA, will allow physicians to have a say in the development and the implementation of any future reimbursement models. Any setting that includes the physician’s input is critical in developing models of care that promote efficient resource utilization and enhanced care quality since it is the same physicians who interact with patients at the frontlines of care.
Interestingly, while APMs were only formally introduced to the public domain with the passing of the MACRA act, this will not be the first time such payment plans are used in the industry. For the past few years, several care facilities across the country have been trying to create episodic based payment bundles that, when implemented together; improve overall satisfaction without exposing patients to cost burdens.
An excellent example is 21st Century Oncology which has been using physician developed episodic payment model for the past three years. 21st Century Oncology is a leading provider of radiation oncology in the country. They successfully launched the payment model in 2012 and have since been perfecting on it. Through targeted strategies that encourage resource utilization while promoting care quality, patients have reported great satisfaction, consistently.
We can only hope that this new policy (MACRA), and the APM provision in particular, will finally provide a platform for meaningful engagement among patients, physicians, and Medicare ultimately resulting in quality care with reduced waste of resources.