An overview of new payment models for cardiologists

During the past few years, payers have shifted away from fee-for-service payment models and started holding clinicians more responsible for collaborating, keeping costs down and improving the quality of care.

A recent review suggests that physicians who embrace alternative payment models could benefit in the future when the models become more popular and penalties increase.

Lead author Steven A. Farmer, MD, PhD, of the George Washington University School of Medicine & Health Sciences in Washington, D.C., and colleagues published their review in JAMA Cardiology on Nov. 16.

"Cardiologists who are early adopters of new payment reforms will have a great advantage," Farmer said in a news release. "Efforts to adopt to reforms now will lead to improved quality and reduced costs in the long term."

The authors mentioned that the passage of the MACRA (Medicare Access and Children’s Health Insurance Program Reauthorization Act) legislation would have a major impact on how physicians are paid. The MACRA legislation replaced the sustainable growth rate formula for Medicare patients with two alternatives: the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).

In 2015, the Department of Health and Human Services (HHS) announced its goal of tying 30 percent of Medicare payments to quality and value by 2016 and 50 percent by 2018. HHS has already met the 50 percent goal this year, according to the authors.

The authors grouped the models into four categories: fee-for-service, fee-for-service with links to quality, APMs built on a fee-for-service architecture and population-based payments.

They said that MIPS and APMs are examples of the fee-for-service with links to quality models. They expect most cardiologists to participate in MIPS, which combines existing pay-for-performance programs with a program on clinical practice improvement.

An example of an APM built on a fee-for-service architecture are bundled payments, in which clinicians receive a lump sum for a group of services. Under that system, clinicians can earn money if their services cost less than the bundled payment but can lose money if it costs more than the bundled payment.

“Alternative payment models exist on a spectrum of increasing complexity and financial risk,” the authors wrote. “No single [APM] will work in every care setting or geographical location. A critical factor in [APM] participation is how practices are able to administratively manage complex payment structures and assume financial risk. The proportion of revenue derived from [APMs] must reach a minimum threshold to justify the significant staffing, operational, and administrative changes required for success. Consequently, many independent practices will find category 2 models more feasible, while integrated delivery networks, health systems, and [accountable care organizations] may more readily participate in more advanced [APMs such as categories 3 and 4].”

The researchers acknowledged that the new payment models have some limitations, including that many cardiologists are aware they exist. They also mentioned that bonus payments in the federal programs may be too burdensome and not worth the hassle. Further, primary care physicians do not receive feedback on the quality of care cardiologists are delivering, while cardiologists often are not told how they could improve.

“The U.S. healthcare system is in a time of historic change,” the researchers wrote. “As the [fee-for-service] model becomes less viable, participation in [APMs] will be unavoidable. Cardiologists must understand these emerging models and lead in their development to ensure that they are clinically driven, patient-centered, and avoid unintended consequences such as restricted access to services or a provision of unneeded care.”