White House Finalizes Medicare Payment Rule

Physicians will have more flexibility under Medicare’s new payment system than originally proposed in a final rule issued Friday by the Centers for Medicare and Medicaid Services.

The rule finalizes the manner in which a new law changing how doctors are paid through Medicare will be implemented. The administration wants to shift the medical system towards one that prioritizes quality over quantity in order to save money. The bipartisan law passed last year.

“We’re trying to get doctors back to doing what they do best, care for patients, through a lot off simplification and support,” CMS Acting Administrator Andy Slavitt said on a call with reporters Friday. “We view this coming year as just the first steps into a program that will improve, not an attempt to create a perfect system.”

Under the program, providers will be able to choose between two paths for how they are paid.

Under the first option, the Merit-based Incentive Payment System, or MIPS, providers would be paid based on their success in providing care in four categories. Providers who don’t report under the program could eventually see a pay cut.

The second path, advanced alternative payment models, is meant for providers that are more prepared for the quality-based changes or have already started making them. Providers in the same region could join together as part of an “accountable care organization” to coordinate care for patients and then can keep a portion of the money Medicare saves through that type of care.

Approximately 380,000 clinicians nationwide will be exempted from the program because they do not treat enough Medicare beneficiaries.

Slavitt told reporters that the agency prioritized giving providers flexibility to prepare for the payment changes. He said the comments on the proposed rule could be summed up as making the transition “as simple and flexible as possible.”

“Essentially what we ended up coming to believe is the best way to transform the delivery system to a way that is more high-value for patients is to respect the diversity of specialties in practices and allow various practices to participate in the way that made the most sense for them and their practices,” Slavitt said.