2 Reasons Fair Market Value Needs to Evolve

In nearly any value proposition, the appropriate reward depends on the level of risk assumed. In the transformation to quality-based pay, the same is true. Paying physicians for quality likewise considers the value of the services contributed and the risk borne by the provider; nobody has the silver bullet as of yet, but hospitals and physicians both need to begin the journey now.

The legislation known as Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) accelerates value-based payment reforms. Secretary of Health and Human Services Sylvia Burwell has a goal of moving from volume-based reimbursement to value and better care.  In 2017, MACRA moves Medicare further into value-based pay. The two programs that move physicians to a streamlined approach towards value-based reimbursement include: 

1. Merit-based Incentive Payment System (MIPS) - MIPS will impact physician compensation radically, increasing the number of variables.
2. Alternate payment models (APMs) - APMs allow physicians to participate in alternative models such as bundles, shared savings and ACOs.

Image Source: CMS Quality Initiatives Timeline

Do not ignore the change that is already taking place and will continue to progress regardless of political changes in the White House or Congress.  Eric Zimmerman partner at McDermott Will & Emery said it best, “The ACA is a partisan issue; quality and innovation are not.”

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