Last month, I went to the doctor for an initial consultation visit. The first words out of my mouth were that I have high deductible and wish to be informed of any high-cost services prior to receiving them. The doctor nodded his head and one week later I received a bill for $3,000 in the mail. That bill was a personal testimony for me of the importance of working towards value-based care, and how transparency is a necessary part of that.
In today’s healthcare market, value-based reimbursement is getting a lot of mindshare. Much of the transformation is being driven by the Centers for Medicare and Medicaid Services (CMS), which has now announced 2018 as its goal for moving half of Medicare payments to value-based reimbursement models. In 2019, CMS will phase in a brand new system for measuring and compensating providers. Coined the “doc fix” bill, the Merit-Based Incentive Payment System (MIPS) may end up being one of the most impactful bills in the history of healthcare reform.
MIPS consolidates and strengthens the three major programs in existence today: meaningful use (MU), physician quality reporting system (PQRS) and Value-Based Payment modifiers (VBP). We can think of MU, PQRS and VBP as the building blocks of MIPS, with a lot of mortar to pull it all together to create something that begins to look like a cohesive structure for value-based payment.
If we were to take that analogy further, the new structure will have four levels, or measures: quality, resource use, meaningful use and clinical practice improvement. Clinical practice improvement is a new measure in the value-based reimbursement equation, and CMS is still looking for industry input on what it might entail. Some believe it could encompass population management, care coordination, telehealth and improved access such as same-day appointments.
MIPS will have a direct impact on Medicare Part B providers’ bottom line, and it will be important for all healthcare industry stakeholders to understand how their business might be affected. A provider’s MIPS score has the potential to impact their reimbursement by +/- 4% for the 2019 payment year (which will likely be based on 2017 performance) and up to +/- 9% by 2022. For many providers who now face operating margins in the single digits, these changes would be significant.
Under MIPS, for the first time ever, patients across the country will be able to go to the Physician Compare website to see their providers rated on a scale of 0-100 and compared to a national average. This is an unprecedented level of transparency in medicine for CMS.
We’re in an environment where over eighty percent of the 150 million workers with employer sponsored plans face deductibles, and the average deductible for a single person in an employer health plan has more than doubled since 2006. Transunion reported that total out-of-pocket healthcare costs for Americans rose nearly 11% in 2014 alone. The reality is that a high proportion of medical costs are being paid for out of patients’ pockets, yet most patients in this country still walk into their provider with no idea what they’ll be charged for any given medical service.
What we do know is that patients across the country are ready. Transunion released results of a survey finding that 80% of Americans say the opportunity to review cost estimates prior to undergoing treatment is just as important as bedside manner when selecting a healthcare provider, while 79% reported that receiving estimated out-of-pocket costs before treatment would make it more likely for them to pay their medical bills on time.
As more healthcare consumers demand transparency, it will be important for healthcare businesses to understand the drivers affecting healthcare decisions, changes in consumer behavior, and trends in self-care and care for others. Next week, we will share the results of a recent cross-generational ORC International survey exploring these topics.
 “Too High a Price: Out-of-Pocket Health Care Costs in the United States Findings from the Commonwealth Fund Health Care Affordability Tracking Survey, September–October 2014,” November, 2014.
 “TransUnion Healthcare Report: Q4:2014,” April 22, 2015.
 “TransUnion Healthcare Survey Finds Cost is a Top Priority for Patients,” June 23, 2015.