HHS announces Medicare payment goals

The current focus on quality and value for psychologists in Medicare is the Physician Quality Reporting System.

On Jan. 26, 2015, the Department of Health and Human Services (HHS) announced its goals for aligning future Medicare payments with quality and value rather than volume of services. Although the idea of emphasizing quality is not new to Medicare, this announcement was the first by HHS where goals included specific percentages of Medicare payments and the department provided a timeline for implementing the payment changes.

According to HHS, 30 percent of Medicare’s payments should be made through alternative payment models by 2016. Alternative payment models include accountable care organizations (ACOs), patient-centered medical homes (PCMHs) and bundled payments. By 2018 HHS expects alternative payment models to account for 50 percent of Medicare payments. Several models, such as ACOs and PCMHs, are already being utilized by Medicare with varying degrees of success.

In general, the designated “alternative” payment models represent a shift away from traditional fee-for-service payment.

HHS is also projecting that, by 2016, 85 percent of Medicare’s fee-for-service payments to hospitals, physicians and other providers will be tied to quality and value rather than volume. The percentage is expected to rise to 90 percent by 2018.

The HHS announcement did not provide specific details about how the department would meet these goals.

At present, the embodiment of HHS’ focus on quality and value as it pertains to psychologists in Medicare is the Physician Quality Reporting System (PQRS). When its predecessor was launched in 2007, the program offered bonuses for successful reporting of quality measures. Now a penalty-based program, PQRS imposes a negative adjustment on future payments of providers who fail to successfully report quality measures.

Further, the Centers for Medicare and Medicaid Services (CMS) currently uses a process called the Value Based Modifier (VM) to tie payments for large physician practices to quality and value. In the final rule on the 2015 Medicare fee schedule, CMS stated that it will apply the VM to services furnished by non-physicians, solo and small group practices in 2018.

CMS did not indicate just how this would be done, saying in the final 2015 rule that the agency needs additional time to study the issue. The American Practice Organization (APAPO) is monitoring news from CMS and will inform members as soon as details about how the VM will apply to non-physicians including psychologists are released.

With the focus on quality and value, HHS is expecting to improve patient care through greater health care integration, better coordination of care for patients with chronic conditions and more attention paid to population health. HHS also wants to align health information technology with payment policy to make patient records available when needed, which the department believes will lead to more timely clinical decision making.

APAPO’s legislative advocacy priorities for 2015 focus on psychologists’ involvement in Medicare and payment for psychological services. For example, APAPO is currently lobbying Congress to pass behavioral health information technology legislation that would make psychologists eligible under existing federal law to receive Medicare incentive payments for incorporating electronic health records into practice.

Meanwhile, notwithstanding the recent HHS announcement regarding Medicare payment models, APA Executive Director for Professional Practice Katherine C. Nordal, PhD, predicts that traditional forms of reimbursement for psychological services will not disappear anytime soon. “Fee-for-service isn’t going totally away for the foreseeable future,” says Nordal.