The first article during my tenure as editor of the “Practice Management: The Road Ahead” section of Clinical Gastroenterology and Hepatology published in July 2012 (Clin Gastroenterol Hepatol. 2012;10:692-6) outlined anticipated changes in health care delivery, due in large part to mandates or trends contained in the Patient Protection and Affordable Care Act. A second article was published in 2013 (Health care reform 3.0: The road gets bumpy. Clin Gastroenterol Hepatol. 2013;11:1527-8). In this month’s column, Spencer D. Dorn, MD, MPH, MHA, of the University of North Carolina at Chapel Hill, adds a third update with an article focused on alternative payment models. These new reimbursement models are becoming common and will be part of all of our practice strategies in the years to come. No matter what occurs in the 2016 election, the movement from volume- to value-based payment will continue relentlessly, and practices that do not understand how to respond will struggle. We hope these articles will kick-start conversations in your practice.
Fee-for-service (FFS) reimbursement has been criticized for encouraging quantity over quality, favoring procedures over cognitive services, and fragmenting care.1 The landmark Patient Protection and Affordable Care Act (ACA) and more recent Medicare Access and Children’s Health Insurance Program Reauthorization Act (MACRA) modify Medicare’s FFS and encourage alternative payment models (APMs) that better reward value than volume.
Prior articles in this series have identified the specific trends driving gastroenterology practice strategies and business decisions,2 including an increasing need to demonstrate value, an emphasis on improved population health, an increasing number of practices becoming employees of large integrated delivery networks, reduced FFS reimbursements that are more closely linked to performance metrics, and increasing demands for risk-based contracts.3 In this article, I dive more deeply into these last two trends (declining FFS and the rise of APMs) and consider strategies gastroenterology practices can take in response.
Changes in fee for service
The ACA directed the secretary of Health and Human Services to establish a formal process to review potentially misvalued procedure codes. Compared with the pre-ACA fee schedule, the final 2016 Medicare Physician Fee Schedule includes cuts to professional fees for upper endoscopy, endoscopic retrograde cholangiopancreatography, endoscopic ultrasound, and colonoscopy. At the same time, over the past decade, facility fees paid for procedures performed in hospital outpatient departments have increased. Those to ambulatory surgery centers have gradually increased, although they still remain far below pre-2008 levels. Thus, the full economic impact of fee revaluation on an individual gastroenterology practice depends on whether it collects associated facility and ancillary fees.4
In addition, in the 2016 fee schedule, the Centers for Medicare & Medicaid Services described its intention to remove the value of moderate sedation from all gastrointestinal procedures. This is to prevent paying twice for sedation in procedures that involve anesthesiology professionals (i.e., one payment to the endoscopist as part of the overall procedure fee and a separate payment to the anesthesia professional for sedation they provide and bill for separately). The American Medical Association/Specialty Society Relative Value Scale Update Committee, using survey data from the GI specialty societies and other specialties that perform their own moderate sedation, has submitted recommendations for the value of a new set of moderate sedation Current Procedural Terminology codes to the CMS. The agency is expected to provide the specifics on how it will remove moderate sedation from the GI procedure codes in the 2017 Medicare Physician Fee Schedule Proposed Rule. The more that moderate sedation is valued, the less that endoscopic procedures will be valued. Consequently, gastroenterologists who rely on anesthesiology professionals to sedate their patients will generate less revenue per procedure, unless they rearrange contracts with anesthesia providers. Gastroenterologists who perform moderate sedation will not be impacted, because the sum of the value of the new moderate sedation code plus the underlying endoscopic procedure code will equal the original value of the procedure.
Beyond revaluing services, the CMS outlined its rather ambitious goal “to have 85% of all Medicare fee-for-service (FFS) payments tied to quality or value by 2016, and 90% by 2018.”5 Currently this includes the Physician Quality Reporting System (PQRS), which requires gastroenterologists to report performance on either three or more individual PQRS measures or one PQRS measures group (collection of related individual measures) or face a 2% Medicare payment penalty. It also includes the value-based payment modifier, through which by 2017 all practices with better-than-average quality (linked to PQRS measures) and lower costs will receive bonus payments, whereas those with worse-than-average performance (or who choose not to report) will be penalized.
