On April 14, 1865, John Wilkes Booth walked into the Ford Theater, entered the presidential box and shot President Abraham Lincoln in the head, forever changing U.S. history.

One hundred and fifty years later to the day, the U.S. Senate overwhelmingly passed legislation that will essentially put a bullet into fee-for-service (FFS) healthcare.

The Medicare Access and CHIP Reauthorization Act of 2015, passed by a 92-8 vote, does away with a ridiculous yearly political drama over how Medicare should pay physicians. The new law, set to be signed by President Obama, replaces the Sustainable Growth Rate with a modest yearly pay increase (0.5%) and, more importantly, a plan to move away from volume-based, fee-for-service care into alternatives. (The House had already approved the measure in March.)

The anti-FFS drumbeat has been growing louder over the past five years. This latest move, combined with actions in the private sector, shifts physicians closer to value-based payment. Here's what the new law does:

  • Allows physicians to voluntarily opt into a 5% bonus, provided at least 25% of their patient revenue is tied to quality and outcomes-based care by 2019 and at least 75% by 2023. If they choose not to, pay increases will be limited to 0.5% for Medicare patients.
  • Establishes the Merit-based Incentive Payment System that moves physicians into shared savings, bundled payment and medical home models. MIPS will also essentially replace the Meaningful Use program tying payment to provider use of electronic health records.
  • Reauthorizes the popular Children's Health Insurance Program for children of low-income parents for another two years.
  • Funds community health centers with $7.2 billion.

No doubt, we'll all read about the new MACR for months and years to come. In the world of healthcare reimbursement, it's as big as it gets. Supported by major physician associations, it will no doubt be criticized for creating a two-tiered payment system: one tier for physicians who don't want to move toward value-based payment and one for those who do.

But the die is cast. The bullet has been fired.

For pharmaceutical companies and all who work with physicians to better care for patients, April 14 will go down as a game-changing date. Physicians will move more rapidly into value-based models. The tools they use for patient care from drugs to devices to staff will have to operate from a similar playbook. Quality metrics, efficiency, and patient satisfaction will help determine reimbursement, and that will change healthcare for all of us.

Follow Jane DuBose on Twitter @JaneGDuBoseDRG

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