Recruiter Reports Surge in Physician Compensation

Physician movement and competition for top talent has caused an “upward spike” in physician payment, according to Merritt Hawkins, a healthcare recruitment firm. The firm’s data from April 1, 2015 to March 31, 2016 show a surge in compensation increases among 19 of 20 specialties it tracks.

 

Merritt Hawkins has conducted an annual review of clinician compensation placements for 23 years. The results this year are based on 3,342 recruitment assignments.

 

Some of the results appear below. Percentages are based on comparisons with data from 2014-2015.

 

Family Medicine                  up 13%

Psychiatrists                         up 11%

Dermatology                         up 13%

Urology                                  up 14%

Otolaryngology                     up 21%

General surgery                   up 12%

OB-GYN                                  up 16%

Non-invasive Cardiology*  up 77%

Invasive Cardiology             up 4%

Orthopedics                          up 5%

Emergency medicine           no change

 

 

*This increase may reflect an artificially low figure for 2014-2015.

 

An executive from Merritt Hawkins noted that it is too soon for the increases to be a result of the Medicare Access and CHIP Reauthorization Act of 2015. (We reported on MACRA in last week’s newsletter/blog.)

 

Source of Demand

 

The report noted that 49 percent of its searches were for hospital positions. A Merritt Hawkins executive said that “the numbers reflect a system still driven by procedure-based reimbursement.” (“Upward Spike in Physician Compensation: Recruiter,” HFMA Weekly, June 24, 2016)

Some hospitals offer additional perks. For example, 20 percent of searches offered medical school loan forgiveness as a bonus, which ranged from $10,000 to $500,000 and averaged $88,000. Just under a third included a quality bonus.

 

According to the report, quality incentives can make up to 29 percent of a physician’s bonus payment, but only 6 percent of total compensation. The Merritt Hawkins executive noted that a quality incentive has to equal at least 10 percent of compensation to affect behavior. (“Upward Spike in Physician Compensation: Recruiter,” HFMA Weekly, June 24, 2016)

 

Objections to Report

 

Some spokespersons from medical specialties have objected to the Merritt Hawkins data, noting it wasn’t derived from a representative sample. They said they prefer the Medical Group Management Association’s annual compensation survey.

 

Merritt Hawkins defended its report, noting that it is not a survey or opinion but rather a true number based on someone writing a check.

 

 

 

iProtean subscribers, the advanced Finance course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman, is in your library. Jennings and Grauman discuss the onset of alternative payment models within the context of population health management, and the levels of risk associated with these models.

 

Our next course, Beyond Payment Changes: Disruptors of Our Health System, featuring Marian Jennings, Dan Grauman and Jim Rice, will be published soon. Our experts discuss the disruptor/payment change link, changes driving disruption and preparing for demand destruction.

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Comments to CMS: MACRA Threatens Viability of Smaller ACOs

 

Smaller accountable care organization (ACO) officials wrote comments to CMS noting that some provisions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) could hurt the viability of smaller ACOs.

 

The proposed rule, MACRA, will split physicians into those paid under the Merit-based Incentive Payment System (MIPS) and those paid annual lump sums and excluded from MIPS quality-reporting requirements by sufficiently participating in qualifying advanced alternative payment models (APMs).

 

However, the list of qualifying APMs excluded ACOs in Track 1 of the Medicare Shared Savings Program (MSSP)—95 percent of the 434 MSSP ACOs are in Track 1.

 

Smaller ACO officials noted that it’s challenging enough to recruit physicians to ACOs without MACRA creating more disincentives. They expressed doubt that providers, if required to meet both ACO requirements and the new MIPS reporting, would continue ACO participation. A recent survey by the National Association of ACOs found that 56 percent of Medicare ACOs would likely leave the MSSP if they are ruled ineligible for the APM track under MACRA. (To download survey, click here.)

 

 

Impact on Physicians

 

HFMA wrote that “the vast majority of the 473 MACRA comments submitted by June 13 decried the impact of the law on small physician practices.” Many highlighted the implementing rule’s estimate that 87 percent of the nearly 103,000 solo practices would experience a combined pay cut of $300 million in 2019, the year the new payment system takes effect. (“Small ACOs Raise MACRA Concerns,” HFMA Weekly, June 17, 2016)

 

This could result in forcing physicians into larger practices or hospital employment, a prediction supported by hospital industry analysts. Solo practices probably would not be able to meet the increased quality reporting or electronic health record reporting requirements.

 

Hospitals employ almost 250,000 physicians and contract with almost another 290,000, according to one expert.

 

iProtean subscribers, the advanced Finance course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman, is in your library. Jennings and Grauman discuss the onset of alternative payment models within the context of population health management, and the levels of risk associated with these models.

 

Our next course, Beyond Payment Changes: Disruptors of Our Health System, featuring Marian Jennings, Dan Grauman and Jim Rice, will be published soon. Our experts discuss the disruptor/payment change link, changes driving disruption and preparing for demand destruction.

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

 

 

 

Final Rule Allows ACOs to Use Regional Benchmarks

CMS issued a final rule last week that will allow accountable care organizations (ACOs) to benchmark their results to regional Medicare spending, using a phased approach to incorporating regional fee-for-service (FFS) expenditures into calculations for resetting, adjusting, and updating an ACO’s rebased historical benchmark after an initial three-year agreement period.

 

National benchmarks will continue to be used in an ACO’s first three-year term. Benchmark changes to the second or subsequent agreement period will include phasing in the transition to a higher weight in calculating the regional adjustment.

 

CMS defined an ACO’s regional service area as any county where one or more assigned beneficiaries reside. CMS will use county-level data to determine regional FFS expenditures for the assignable beneficiary population in the ACO’s regional service area.

 

The changes mean an ACO’s rebased historical benchmark will be determined by comparing the ACO’s performance with that of other providers in the same regional market instead of simply evaluating the ACO against its own past performance.

The rebased historical benchmark will not apply until the third agreement period—beginning in 2019—for ACOs that started in 2012 and 2013.

 

“As a result of these changes, the methodology for determining the ACO’s rebased historical benchmark will reflect an ACO’s performance in relation to other providers in the same regional market, rather than just evaluating the ACO against its own past performance,” CMS said in a fact sheet.

 

The final rule is viewed as an improvement over how Medicare pays ACOs in the Medicare Shared Savings Program (MSSP). It is moving away from paying for each service a physician provides towards a system that rewards physicians for coordinating with each other.

 

Changes from the proposed rule also included revising the benchmarking methodology for national fee-for-service (FFS) calculations to use “assignable” Medicare FFS beneficiaries instead of all FFS beneficiaries.

 

Sources: “ACO Final Rule Will Strengthen Incentives to Participate, CMS Says,” AHLA Weekly, June 10, 2016; “CMS Moves From National to Regional ACO Benchmarking,” AHLA Weekly, June 10, 2016; Medicare Makes Enhancements to the Shared Savings Program to Strengthen Incentives for Quality Care, CMS Press Release, June 6, 2016.

 

To read the CMS fact sheet, click here.

 

 

 

iProtean subscribers, the advanced Finance course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman, is in your library. Jennings and Grauman discuss the onset of alternative payment models within the context of population health management, and the levels of risk associated with these models.

 

Our next course, Beyond Payment Changes: Disruptors of Our Health System, featuring Marian Jennings, Dan Grauman and Jim Rice, will be published soon. Our experts discuss the disruptor/payment change link, changes driving disruption and preparing for demand destruction.

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

 

More PCPs Can Participate in CPC+

CMS will allow primary care practices in the Medicare Shared Savings Program (MSSP) to participate in the Comprehensive Primary Care Plus (CPC+) initiative. The announcement came in response to stakeholder concerns that a new Medicare primary care payment model could steer physicians away from accountable care organizations.

 

Up to 1,500 eligible primary care practices currently participating or applying to participate in Tracks 1, 2 or 3 of the MSSP as of January 1, 2017 will be able to participate in the CPC+ model. If more than 1,500 eligible practices apply, CMS said it would use a lottery system to determine which ones participate in CPC+.

 

Practices in the ACO Investment Model, Next Generation ACO Model, or other shared savings programs are not eligible for CPC+, according to FAQs from CMS. (“CMS Says ACOs May Participate in Primary Care Plus Initiative,” AHLA Weekly, June 3, 2016)

 

Background

 

In April, CMS announced CPC+, a voluntary multi-payer primary care payment model, for up to 5,000 practices and more than 20,000 clinicians. CPC+ will use either monthly payments or advanced prepayments to incentivize certain primary care approaches, such as supporting patients with serious or chronic diseases to achieve their health goals; providing 24-hour access to care and health information; delivering preventive care; and coordinating care with hospitals and other clinicians, including specialists. (“CMS Reverses Course, Allows ACO Physicians in CPC+,” HFMA Weekly News, June 3, 2016)

 

Analysts had expressed concerns that CPC+ would create disincentives for physicians to join or stay in ACOs. Even sorting out the specific opportunities within CPC+ would slowdown the decision-making process for primary care providers and deter enrollment and growth of physician-led ACOs in 2017, said a senior fellow at the Schaefer Center for Health Policy and Economics at USC.

 

The National Association of ACOs also wrote that “given the option of pursuing uncertain shared savings through MSSP or receiving comparable guaranteed payments through COC+ as well as additional payments under this program, we are deeply concerned many will choose the latter.” (“CMS Reverses Course, Allows ACO Physicians in CPC+,” HFMA Weekly News, June 3, 2016)

 

Benefits of Participating in Both Programs

 

In addition to eliminating an incentive for ACO physicians to depart the MSSP, allowing physicians to participate in both programs may provide benefits for each.

 

  • A combination of care management fees and capitated primary care with shared savings (instead of performance-based payments) will be more successful at reducing spending while improving quality.
  • Fee restructuring included in CPC+ would be very helpful for physician-led ACOs, according to experts. The enhanced per member, per month (PMPM) and patient support fees provided in CPC+ would give the practices the advance resources they need to implement reforms in their practices to achieve population-level health improvements and Medicare spending reductions.
  • The combination could incentivize CPC+ practices to achieve the savings some doubt will occur among practices participating only in CPC+, which offers no specific incentive to lower the total cost of care.

(“CMS Reverses Course, Allows ACO Physicians in CPC+,” HFMA Weekly News, June 3, 2016)

 

To read CMS’ updated FAQs on CPC+, click here.

 

 

iProtean subscribers, the advanced Finance course, Population Health and Alternative Payment Models, featuring Marian Jennings and Dan Grauman, is in your library. Jennings and Grauman discuss the onset of alternative payment models within the context of population health management, and the levels of risk associated with these models.

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here. www.iprotean.com/index.php/iprotean/demo