High-risk practices more likely to receive penalty under Medicare value-based payment program

Practices with more high-risk patients may be more likely to see penalties under value-based payment systems, a new study suggests.

Physician practices that take on more medically and socially high-risk patients than others are more likely to pay a financial price under a Medicare payment program.

Despite safeguards such as risk adjustment, practices that served a disproportionate share of those high-risk patients in the first year of the Medicare Physician Value-Based Payment Modifier Program were more likely to receive a penalty when compared with other practices, a study published in JAMA found.

Researchers looked at program payments made in 2015 to 899 large practices caring for more than 5.1 million Medicare fee-for-service beneficiaries who were treated in 2013. Practices that served more socially high-risk patients had lower quality and lower costs. Practices serving more medically high-risk patients had lower quality and higher costs.

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Both were patterns associated with fewer bonuses and more penalties for high-risk practices based on performance in the program, the study found. High-risk practices served patient populations that were generally younger and more often of ethnic minority, dually enrolled in Medicare and Medicaid and disabled, the study found.

Under the program, a precursor to the Medicare Quality Payment Program that began this year under the Medicare Access and CHIP Reauthorization Act (MACRA), physician practices receive penalties or bonuses that range from -1% to 10% of Medicare payments in 2015 based on quality and costs of care.

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The Merit-Based Incentive Payment System (MIPS) being implemented under MACRA combines the Physician Quality Reporting System and the Value-Based Payment Modifier.

The findings suggest that as value-based payment programs continue to increase in size and scope, practices that serve high-risk patients may be at particular risk of getting hit with financial penalties, the study concluded.

One question that arises in the shift from volume-based to value-based payment is whether doctors will "cherry pick" or “lemon drop” patients, dismissing those with complex needs who use a lot of resources. However, a study earlier this year suggested that isn’t the case; doctors didn’t dismiss patients and limit their practice to those for whom they can readily demonstrate value to maximize revenue in a value-based payment system.