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April 2010
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Health Reform Will Affect How ID Physicians Are Paid
Several provisions will link quality measures and payments, test new models

The health reform bill that passed in March will affect ID clinicians and their patients in many different ways in the coming years. While the legislation contains several provisions related to IDSA’s priorities, including those involving prevention and wellness (see related IDSA News article), it also includes measures that will affect how physicians are paid in the future. These include tests of new payment models and the use of quality measures to determine payments.

An outline of these measures is below:

  • In 2015, physicians who do not report accountability measures through the Physician Quality Reporting Initiative (PQRI) will have their Medicare payments reduced by 1.5 percent for the first year and 2.0 percent each year thereafter. Currently, this reporting is voluntary; physicians are eligible for bonus payments if they participate. For more information about the PQRI program, visit IDSA’s website.
  • The bill allows the Centers for Medicare and Medicaid Services (CMS) to pay physicians differently based on their quality and cost of care using a value-based modifier to determine payments under Medicare’s physician fee schedule. This could result in lower payments to physicians who achieve the same patient outcomes as their peers but use more resources. The new modifier will be phased in over two years starting in 2015.
  • Another provision may help ID clinicians who negotiate infection control contracts with their hospitals secure higher payments for achieving certain quality benchmarks. Starting in 2015, hospitals in the top 25 percent nationwide for certain high-cost and common health care-associated conditions will face a 1 percent payment penalty under Medicare.

The health reform legislation also authorizes testing of several new payment models through a newly established Center for Medicare and Medicaid Innovations (CMI) within CMS. Demonstration and pilot programs, which could be implemented nationally if they improve quality of care and reduce costs, will test:

  • Shared savings through accountable care organizations (ACOs), which would allow groups of providers to share in savings generated by providing more efficient care for Medicare patients, beginning in 2012. Savings payments would be in addition to Medicare’s usual fee-for-service reimbursements.
  • Bundling providers’ payments around episodes of care that include certain conditions, starting no later than January 2013. Acute inpatient care, inpatient and outpatient physicians’ services, outpatient hospital services, home health, skilled nursing services, inpatient rehabilitation, and long-term care facility services would all be part of the payment bundles.
  • Adjusting hospital payments for avoidable readmissions beginning this year. Initially, the adjustments will be based on each hospital’s percentage of potentially preventable Medicare readmissions for acute myocardial infarction, pneumonia, and heart failure. The policy may be expanded to other conditions in future years.

The reform bill also will create the Independent Payment Advisory Board (IPAB). Beginning in 2014, the board will present proposals to Congress to reduce rising Medicare costs and improve quality of care. IPAB’s recommendations will take effect automatically, without congressional approval, in years when Medicare costs are projected to exceed target growth rates. Some recommendations, however, such as rationing care or raising taxes or premiums, are prohibited.

In addition to potential payment changes for physicians, two other health care reform provisions may provide at least a limited benefit for antibacterial drug development, an important area of clinical need and an IDSA priority. These include:

  • A new two-year, temporary tax credit, subject to an overall cap of $1 billion, to encourage investments in new therapies to prevent, diagnose, and treat acute and chronic diseases.
  • Creation of the Cures Acceleration Network within the National Institutes of Health (NIH) to award grants and contracts to help move discoveries from the lab into the next generation of cures and treatment therapies for diseases. IDSA has called for funding of at least $500 million in the 2011 fiscal year for this new initiative (see IDSA’s congressional testimony).

IDSA will continue to monitor the implementation of these and other provisions of health care reform. For a summary of key provisions of the new law of particular importance to HIV providers and their patients, please see this document prepared by the HIV Medicine Association (HIVMA) and related article
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