The phrase “clear as mud” came up several times in the introduction Dr. William Harvey delivered at the 2016 ACR Annual Meeting in Washington, D.C., about the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Physicians need to be aware that a performance period, which will determine adjustments in 2019, starts on January 1, 2017, said Dr. Harvey, a rheumatologist and assistant professor at Tufts University School of Medicine. And those changes shouldn’t be affected by the new administration in Washington.

“It is not anticipated, because this regulation is so deep, and in fact it passed with massive, massive bipartisan support, that the election will have any effect on this at all,” he said.

From 2017 to 2019, doctors will see a 0.5 percent raise annually from Medicare. “That doesn’t actually sound like very much, and it’s much less than the rate of inflation. It’s true,” he said. “However, if you average what our pay raises were for the past 10 years prior to the enactment of this law, it was 0.4 percent. So there you go. Congratulations, everyone.”

How physicians perform from 2017 to 2019, under a system called MIPS — merit-based incentive payment system — will impact their payment adjustments starting in 2019. Physicians will be graded on a scale from 0 to 100 in four categories: quality, resource use, clinical practice improvement activities and meaningful use.

Of particular interest to rheumatologists, Dr. Harvey said, is the setting of costs, or resource use, to zero prior to the 2017 and 2019 periods. “That’s a really good thing for rheumatologists, because we use some of the most expensive drugs around,” he said.

But just as Dr. Harvey repeatedly referred to aspects of the future developments as “clear as mud,” the second speaker, Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, lamented the absence of a physician-led future under the law.

Miller, who also serves as an adjunct professor of public policy and management at Carnegie Mellon University, began his presentation with a quiz:

  1. Which U.S. industry told its employees every year for the past decade that their pay would be cut by 15 to 30 percent regardless of how well they performed?
  2. In which U.S. industry can one set of employees only get a raise if other employees take a pay cut, even when the business is performing well?
  3. In which U.S. industries are businesses only able to sell their products and services to customers through an intermediary who demands large discounts and increases prices by 18 to 25 percent?

The answer to all three, he said, is “health care.” But the answer to the fourth question — “Who is to blame for the way physicians are paid and micromanaged?” — was a surprise. “Physicians.”

“I think the blame does rest with physicians for the following reasons,” he said. “Physicians actually haven’t come up with solutions to deal what is the biggest problem facing the country right now, which is health care costs, without rationing care.”

“Physicians have allowed themselves to be seen as problem in all that,” he added, nor do they collaborate well nor have they defined better payment models to support lower-cost higher-quality care and maintain financial viability.

Doctors can choose from three future paths, he said: pay for performance that use merit-based incentives (MIPS), alternative payment models and physician-focused payment models.

Incentives, he said, are problematic, for a number of reasons. Studies show that physicians spend five percent of their workweek measuring quality, with only a bonus or penalty of four percent under MIPS. Either way, they’re losing at least one percent.

Also, the bonus one can expect for superior work depends on one’s colleagues failing, which could spell the end of collaboration. “You can probably cancel your conferences for the future, because no one will come and share any information about how they actually did it better,” Miller said. “The only way they can get paid better is if everybody else doesn’t.”

So the first path, pay for performance, ends up being “accountability without resources or flexibility,” Miller said.

The second option, alternative payment models, which Congress is encouraging, exempts physicians from MIPS. But most of these are shared savings programs, under which physicians receive bonuses for spending less than expected and penalties for the opposite.

“Shared savings is just another form of pay for performance,” Miller said. “It sounds easy. It’s just, ‘Hey. We’ll give you a bonus if you do less.’ But it’s kind of premised on this notion that somehow physicians are all sitting around with the CPT (Current Procedural Terminology) manual looking for things to order, and if we give them a bonus maybe they’ll order fewer things.”

Among the problems with this sort of structure are:

  1. Doctors who are already efficient won’t receive any or much more revenue, which could put them out of business.
  2. The programs could reward physicians for denying care in certain circumstances.
  3. And the bonuses are one-time only, so the following year, doctors would be expected to find other cost-cutting opportunities.

“Medicare has hidden all of this very carefully,” Miller said. “You’ll never find it in the press releases.”

Door number three responds to what’s wrong with the first two. “All those APMs that exist today and MIPs were all designed by payers — by health plans and by Medicare. Guess what? If payers are going to design payment systems, they’re going to design them in ways that work for them, not necessarily for doctors or patients,” Miller said. “Physicians have to figure out how to change their care to align with the payment system.”

Physicians have to redesign care, and then the payment systems should follow suit. That can happen when physicians identify avoidable spending areas and barriers in payments that require fixing, and then tailoring alternative payment models to removing those barriers, Miller said.

“The key step is,” he added, “this isn’t just ‘Pay us more and trust us.’ It requires physicians to take accountability for the things that they said are avoidable if you pay them differently.” That, he said, would be building the payment system from the bottom up, rather than from the top down.