Medicare's payment carrots turn to sticks

Connected coverage — selected articles on trends, challenges and controversies in the changing world of medicine.

Posted May 20, 2013

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Incentives aimed at making quality reporting and health information technology ingrained across the health system have produced billions of dollars in payouts to hospitals, doctors and others. The pendulum is about to swing, with penalties for noncompliance on the horizon and many physicians not yet able to avoid them.

American Medical News has covered the years-long routine of standard-setting, often-tentative IT adoption and calls for adjustments as the realities of programs became apparent. The latest warning is a call to action to meet the initial reporting threshold for Medicare's physician quality reporting system. After that comes the penalty deadline for the more demanding — and escalating — requirements for electronic health record meaningful use. Medicare already has made its point through penalties to 135,000 professionals who failed to meet an e-prescribing requirement by 2011 — to the tune of a 1% pay cut in 2012.

Last chance for quality reporting before Medicare penalty kicks in

Nearly 700,000 doctors and other health professionals had not successfully taken part in Medicare's physician quality reporting system as of last count, in 2011. Failure to submit enough valid reports by the end of 2013 will result in a 1.5% payment penalty applied to 2015 rates. The minimum threshold for physicians to avoid the cut is to send a valid quality measure code at least once in 2013. Participants who did meet minimum reporting standards for bonuses were paid, on average, $1,059 in 2011.

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Proposed meaningful use stage 3 criticized as hasty and too strict

Physicians properly adopting EHRs can earn up to $44,000 in Medicare bonuses. However, doctors not meeting requirements by October 2014 stand to be assessed a 1% Medicare payment penalty beginning in 2015. With stage 1 standards already in use and stage 2 standards set to apply to early adopters in 2014, attention is turning to stage 3 standards. Physician organizations warn that those newest proposed requirements are too ambitious to be met, putting practices at risk to be penalized.

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Decisions doctors must make to avoid Medicare penalties

The American Academy of Family Physicians estimates that successfully participating in EHR meaningful use, PQRS and e-prescribing in 2013 could save a physician $19,000 in avoided penalties. Even though some penalties for failure to e-prescribe already have been levied, there are steps doctors can take in 2013 to avoid other pay reductions for noncompliance.

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