No more than five physician groups have earned bonus payments in any of the first four years. Results for the fifth year, which ended last March, are not yet available. Two physician groups received a combined $7.3 million during the first year. In year two, four groups shared $13.8 million in bonus awards. Five groups earned bonuses in year three that totaled $25.3 million.
To earn bonuses, doctors must first curb spending by 2%. After that, physician groups may claim up to 80% of savings up to 5%, after which, Medicare retains the rest.
The American Hospital Association faults the bonus criteria for the fact that no more than half of the physician groups have earned bonuses. It urged CMS to be more lenient when developing rules for accountable-care organizations.
Regulations are expected in early January.
The agency could “increase access to capital by relaxing the rigidity around how shared savings is calculated,” the AHA said in a Dec. 3 letter to Donald Berwick, CMS administrator. “We believe CMS should demonstrate significant restraint” as officials try to devise awards that do not mistakenly award bonuses for random yearly changes in health spending, which will “improve the likelihood that ACOs will experience an early return on investment,” the AHA said.
The CMS says the agency is working on including the 10 physician groups among the Medicare accountable care organizations under health reform.
Marshfield Clinic, one participating physician group, earned a bonus based on the Wisconsin provider's savings each of the four years. Theodore Praxel, medical director for quality improvement and care management for the group, says the clinic's savings also exceeded Medicare's cap on bonuses.
The clinic's bonus totaled about $16.2 million, Praxel says, but the CMS held onto another $6.8 million that surpassed the cap.
Marshfield Clinic has largely used bonuses to pay for services not covered by Medicare, he says, but providers can wait more than a year for payouts and CMS withholds 25% until the end of the pilot, which he describes as “less than desirable.”
“The more rapidly the cash flow can occur, the better it is for the health of the business,” Praxel says.
Marshfield's quality improvement has been more important than its financial gains, Praxel stresses. Marshfield was one of three groups to meet targets set for 32 quality performance measures. He describes the pilot as a “valuable learning experience.”