CMS Expected To Announce Plans To Speed Performance-Based Pay

CMS officials are expected to announce Monday (Jan. 26) that they are moving a certain percentage of Medicare provider contracts to performance-based pay in the near future, provider lobbyists say. The expected announcement coincides with work Congress is doing to reform the Sustainable Growth Rate (SGR) formula, which calls for moving physicians to alternative pay models that are based on performance.

Lobbyists haven’t been able to discern the details of the initiative, such as the timeline and the percentage of providers CMS wants to move to performance-based contracts, lobbyists say. In general, it seems CMS is building on its success in moving providers to alternative pay models, such as accountable care organizations, medical homes and bundled pay arrangements. Other initiatives, including the Comprehensive Primary Care Initiative and programs to reduce avoidable readmissions and hospital acquired infections also fall under the umbrella of performance-based pay.

CMS might couch the announcement next week in the context of these initiatives and as a way to accelerate the move to alternative pay models, sources say.

CMS could not immediately be reached for comment.

In a similar vein, the SGR bill that the two parties agreed to last year would encourage physicians to move to alternative payment models by offering a 5 percent bonus between 2018 and 2023 to those who receive a significant portion of their revenue from an alternative payment model or patient-centered medical home. In 2024 and beyond, physicians in APMs would qualify for a 1 percent update and all others would receive a 0.5 percent annual update.

Despite the lack of details on the CMS initiative and how it might apply to hospitals or physicians, the legislation is likely a better deal for physicians. There’s a good chance that CMS’ timeline will be more aggressive, and CMS’ plans typically involve pay cuts, compared with the pay increases that the SGR bill would use to encourage physicians to move to alternative pay models, a provider lobbyist said. — John Wilkerson (

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