Health Care

How A Merit-Based Payment System Affects Nurse Practitioners

By April 10, 2016 No Comments

The Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act of 2015 repeals the sustainable growth rate formula for calculating reimbursement for Medicare providers, including advanced practice nurses (APNs). The act institutes a 0.5 percent payment increase for the next five years, and then freezes rates through 2025 as Medicare transitions to paying providers on the quality of care they provide.

The old sustainable growth rate formula attempted to hold down costs by tying Medicare payment rates to domestic economic growth. Payments to providers were cut when spending exceeded the predetermined targets. This caused physicians and hospital administrators to push their representatives for a change, but Congress regularly restored the cuts. This resulted in a confusing and expensive process that ended in increased Medicare spending.

The new payment formula creates a Merit-Based Incentive Payment System (MIPS)—to begin in 2019—that rewards providers who deliver documented (via EHR) quality care, use resources efficiently, employ practices shown to improve outcomes, and keep patients out of the emergency department (ED). Providers who use alternative payment models, such as accountable care organizations (ACOs), bundled payment arrangements, and medical homes can opt out of the merit payment system and are eligible for 5 percent bonus payments.

The new law affects nurse practitioners (NPs) in that they will no longer be subject to a looming 21 percent cut in provider reimbursement. The new law also allows nurse practitioners to certify patient eligibility for durable medical equipment without intervention by a physician or other provider, thus increasing the scope of practice for NPs.

The current formula pays NPs 85 percent of physician rates, but with the new merit-based incentive system NPs will be eligible for financial incentives for providing quality care. APNs will also be rewarded for participating in successful alternative payment models and NP-led medical homes will become eligible to receive incentive payments for management of patients with chronic disease.

“Instead of being added to a physician-based system, NPs will participate in value-based payment systems from their inception,” stated Ken Miller, PhD, RN, CFNP, FAAN, FAANP, president of the American Association of Nurse Practitioners. “This means the same revisions in payment and quality requirements as for physicians, along the same time line. This should create a more equitable system of care, better access, more efficiency, higher quality and accountability by clinicians, including nurse practitioners providing care to patients.”

The new payment system will apply to all nurse practitioners, including clinical nurse specialists and certified registered nurse anesthetists, whether they are employed by physicians or have their own practices.

Each year, the Secretary of Health and Human Services will publish a list of quality measures to be used in the forthcoming MIPS performance period. Quality measures selected for inclusion will address all five of the following quality domains: clinical care; safety; care coordination; patient and caregiver experience; and population health and prevention.