Times are changing, what used to be EHR incentives for use, are now becoming penalties for non-compliance. The change of reward strategy to punishment reflect the Center for Medicare and Medicaid Services urge for physicians to make greater use of health information technology.

The Medicare Primary Care Incentive Program

In 2015, Primary care physicians will face a new challenge to their bottom lines. Financial incentives to encourage physicians to use electronic health records and report quality metrics will soon turn into penalties.

The Medicare Primary Care incentive program and the Medicare/Medicaid parity program are also scheduled to expire in the very near future. These changes can create a significant drain on practice finances, especially for practices that have chosen not to participate in the Medicare meaningful use (MU) or physician quality reporting system (PQRS).

The change from rewards to penalties reflects CMS’ long-term goal for physicians to make greater use of health information technology and transition the healthcare system toward an emphasis on quality and outcomes.

The penalty for not participating in meaningful use will most likely have the greatest impact. Eligible professionals (EPs) who haven’t demonstrated meaningful use of EHRs will face a 1% penalty on their Medicare reimbursements in 2015. These penalties are expected to increase 1% each year until 2019.

For EPs also not participating in the Medicare e-prescription program, the penalties start at 2% in 2015 and will plateau at 5% in 2019. All EPs must continue to demonstrate meaningful use every year through 2019 in order to avoid penalties. A one-time demonstration of meaningful use won’t be sufficient.

Adopted in 2006, the PQRS has paid doctors bonuses between 0.5% and 2% of their annual reimbursements for reporting data on a wide array of quality measures. Starting in 2015, physicians and practices that didn’t report PQRS data by 2013 will be subject to a 1.5% adjustment to their Medicare reimbursements, rising to 2% in 2016.

Also beginning next year, under the CMS Value-based Modifier Program, Medicare reimbursements for practices consisting of 100 or more EPs that didn’t report their PQRS data by 2013 will be reduced by an additional 1%.

Groups that have reported PQRS data will receive a bonus, a penalty, or see no change depending on how they chose to report their data and their performance under the quality metrics they reported on. Bonuses can go up to 2%, while penalties can rise to 1% of Medicare reimbursements as specified in Medicare’s Physician Fee Schedule. Although it is too late for those who didn’t participate to avoid the 2015 or 2016 penalties, providers can avoid penalties in 2017 by participating next year.

On January 1, 2015, the two-year program under which Medicaid reimbursements for primary care physicians were equalized with those of Medicare is scheduled to expire.

Numerous medical groups, such as the American Academy of Family Physicians and the American College of Physicians have been lobbying Congress to have the program extended or made permanent.

In 2016, the Primary Care Incentive Program, under which PCPs are eligible for a bonus equal to 10% of their Medicare reimbursements, is also set to expire. The Medicare Payment Advisory Commission has suggested replacing it with a per-patient stipend to PCPs for primary care services.

Adding an incentive or increasing the penalties makes sense. However, are these programs the rights ones to have a positive effect on our healthcare system? Only time will tell. Providers need to be prepared for these changes ahead.

Author: Lauren Daniels

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