Medicare Access and CHIP Reauthorization Act (MACRA)

V. Key Issues: Population Health >> H. Quality/Satisfaction >> General Approaches >> Pay-for-Performance  >> Medicare Access and CHIP Reauthorization Act (MACRA) (last updated 7.16.18)
Lead Editor: Dana Beezley-Smith, Ph.D.

Overview

The Medicare Access and CHIP Reauthorization Act (MACRA), was passed by the U.S. House of Representatives on March 26, 2015, (by a vote of 392 to 37) and the Senate on April 14, 2015, (by a vote of 92 to 8), and signed into law on April 16, 2015. The legislation repealed the Sustainable Growth Rate (SGR) formula for Medicare physician and other EC (eligible clinician) payments. Medicare payments will transition to P4P programs and away from a volume-driven, fee-for-service system. MACRA establishes an alternative set of predictable annual baseline payment updates and two payment tracks: the Alternative Payment Model (APM) track and the Merit-Based Incentive Payment System (MIPS) track.

If House Doc Fix Adds $141 Billion to Deficit, Can Medicare Survive ‘Reform’? “The Congressional Budget Office has released its score of the Medicare ‘doc fix’ legislation scheduled for consideration Thursday in the House. Among other things, the score provides some sense of the difficulty in enacting reforms to improve Medicare’s solvency… CBO projected that the bipartisan legislation to repair Medicare’s physician payment structure would add $141 billion to the deficit. As I wrote in an earlier post, Congress paid for temporary patches in the past in part by cutting spending and in part by planning on bigger payment reductions in future years. While the legislation’s prospective increases in payment levels would be paid for, the future payment reductions already on the books would not be covered, thus raising the deficit. That unpaid-for increase in Medicare spending would also raise the basic Medicare Part B monthly premium by $10 monthly in 2025, CBO concluded.” (Wall Street Journal, 3.25.15)

Timeline for MACRA Implementation

A visual representation of the MACRA timeline is found here.

  • July 2015-December 2015: Medicare EC payments increase by 0.5 percent.
  • 2016: The last performance period for PQRS, VBM and Medicare MU began January 1, 2016, and expires on December 31, 2016. 
  • 2016–2019: Medicare EC payments increase by 0.5 percent each year.
  • January 2017: Based on eligibility, ECs enter either the APM track or the MIPS track. The first performance period for MIPS is expected to be January 1, 2017, through December 31, 2017.
  • 2020–2025: Medicare fee-for-service payments remain at 2019 levels with no updates.
  • 2026 and beyond: All ECs participating in the MIPS will be eligible for a 0.25 percent increase in their payments each year.

Alternative Payment Model (APM)

Eligible Models

Congress defined any of the following as an alternative payment model:

  • An innovative payment model expanded under the Center for Medicare & Medicaid Innovation (CMMI), including Comprehensive Primary Care (CPC) initiative participants but not Health Care Innovation Award recipients
  • A Medicare Shared Savings Program accountable care organization (ACO)
  • Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program, or another demonstration program required by federal law.

However, only six current APMs made the Advanced APM list in CMS’ April 2016 proposed rule, one of which is not available until 2018: 

  • Next Generation Accountable Care Organization (ACO) Model (21 current participants)
  • Medicare Shared Savings Program (MSSP) Track 3 (16 current participants)
  • Comprehensive End-Stage Renal Disease (ESRD) Care (CEC) – Large Dialysis Organization (LDO) arrangement (12 current participants)
  • MSSP Track 2 (6 current participants)
  • Comprehensive Primary Care Plus (CPC+) (available in 2017)
  • Oncology Care Model (OCM) two-sided risk arrangement (available in 2018)

The rules excluded as qualifying APMs many existing programs, including the Comprehensive Care for Joint Replacement (CJR) model, the Bundled Payments for Care Improvement (BPCI) initiative, and Track 1 Medicare Shared Savings Program (MSSP) ACOs, which comprise 95 percent of the 434 MSSP ACOs. According to Medscape Medical News (7.7.16), many patient-centered medical homes are ineligible for classification as advanced APMs. “CMS has added yet more limitations. For clinicians in advanced APMs to become qualified providers (QPs) exempted from MIPS, they would have to earn a minimum of 20% of Medicare payments and have 10% of patients through the advanced APM, CMS says in the proposed rule. Furthermore, CMS says that even among this group of QPs, many would not qualify as ‘full QPs,’ who get an automatic bonus equal to 5% of their Medicare reimbursements. This second tier, called ‘partial QPs,’ are those who get 20%-25% of the Medicare payments and 10%-20% of their patients through advanced APMs.”

Expansion of APM Models

  • New MACRA Proposed Rule Provisions Impact Orthopaedic Bundled Payments. “On July 25, 2016, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) released a new proposed rule… (that) alters an existing bundled payment model for total joint arthroplasty and potentially allows it to qualify as an Advanced Alternative Payment Model (APM). Inclusion of the Comprehensive Care for Joint Replacement (CJR) bundled payment model and a new Bundled Payments for Care Improvement (BPCI) voluntary model expands the original proposed Quality Payment Program rules on Advanced APMs under MACRA and creates new pathways for physicians to qualify for increased payment incentives beginning in 2018. According to the CMS proposed rule:
    • A new surgical hip/femur fracture treatment (SHFFT) bundled payment model initiated by hip and femur procedure claims may qualify as an Advanced APM.
    • Two different tracks will be implemented within the SHFFT and CJR models:
      • Participants who meet proposed requirements for use of Certified Electronic Health Record Technology (CEHRT) and financial risk would be in Track 1 (an Advanced APM track).
      • Participants who do not meet CEHRT and financial risk requirements would be in Track 2 (a non-Advanced APM track).” (American Academy of Orthopedic Surgeons, 8.10.16)
  • On December 20, 2016, CMS announced adjustments to the Comprehensive Care for Joint Replacement (CJR) Model, allowing the model to qualify as an Advanced APM under the Quality Payment Program as well as aligning the model’s policies with the episode payment models around financial arrangements and beneficiary engagement incentives, compliance enforcement, appeals processes, and beneficiary notifications.

Other APM Criteria

An APM requires participants to meet all of the following criteria:

  • Uses quality measures comparable to measures under the MIPS
  • Uses certified electronic health record (EHR) technology
  • Bears more than nominal financial risk or is a medical home expanded under the CMMI
  • Has increasing percentage of payments linked to value through Medicare or all-payer APMs

The proposed rule also established three criteria that APM participants will need to meet to satisfy MACRA’s nominal financial risk requirement:

  • Marginal risk of at least 30 percent
  • Minimal loss rate of no more than 4 percent
  • Total potential risk of at least 4 percent of expected expenditures

APM Incentive Payments

  • The Brookings Institute reports (5.4.16) that “in order to receive the APM track bonus, physicians must have a minimum of 25 percent of their revenue from Medicare come through eligible APMs in 2019, with the minimum increasing through 2023 up to 75 percent. In 2021, a new all-payer Advanced APM option becomes available, allowing providers in APM contracts with other payers to participate in the Advanced APM incentive. To do so, they must meet the same minimum thresholds—50 percent in 2021, 75 percent in 2023—but through all provider contracts, not solely Medicare revenue, while still meeting a significantly lower Medicare-specific threshold. By creating an all-payer option, CMS hopes to enable greater provider participation by allowing all payer revenue to count toward the same minimum threshold.”
  • According to law firm Proskauer (5.12.16), “between 30,658 and 90,000 eligible clinicians will become QPs (Qualified Professionals) through participation in Advanced APMs, with between $146 million and $429 million APM Incentive Payments estimated to be distributed in 2019.”
  • According to Mediscape Medical News (7.7.16), “unable to get the (APM) 5% bonus, partial QPs might decide to stay in MIPS, where they might actually earn more money than as full QPs. High-performing MIPS clinicians might earn bonuses of as much as 12% in MIPS. In MIPS, partial QPs have many advantages, such as not having to report certain metrics and getting ‘favorable weights,’ according to the proposed rule.”

APM Analysis

  • Why MIPS is Only Half the Story. “We had some hints that APMs would be big in the new program, but the big news in the Proposed Rule was that not just any APM will do. The APM must be an Advanced Payment Model. There is a complex formula for determining if an APM falls definitively in the Advance realm, but the biggest differentiator is that the APM must carry some downside financial risk. That’s why your average Track 1, Accountable Care Organization under the Medicare Shared Savings Program (MSSP) will not qualify. They will still need to participate in MIPS. Because they are participating in an MSSP, they will receive additional points in the category ‘Clinical Practice Improvement Activities.’ Medicare is aggressively pushing practices to Advanced APM by incentivizing them 5%. Though being an Advanced APM exempts the eligible clinicians from MIPS, they are required to show that they use Certified Electronic Health Record Technology (CEHRT) and they will continue to have to rigorously measure quality.” (Mingle Analytics)
  • Many Existing APMs Excluded Under Proposed Physician Pay Rules. “The limited number of existing models qualifying as APMs drew concerns from several provider organizations, including Premier. “As we have learned through members in our Population Health Management Collaborative, these programs require providers to not only forgo revenue through a lower volume of services, but also invest millions of dollars in redesigning care through new technologies, data analytics, additional staff, etc.,’ Blair Childs, a premier spokesman, said in a written statement. ‘We think most businessmen would call that more than nominal risk, yet CMS choses to define it as only cases where there is risk to the government.’ Not including Track 1 ACOs and bundled payment programs could lead physicians to leave APMs and return to fee-for-service payment, Childs warned. Another possible consequence, according to Mulvany, was departures from the MSSP for other APMs. ‘If an MSSP ACO is struggling under Track 1 and about to be compelled to take risk, CPC+ might be a more attractive alternative if it’s available in the ACO’s market,’ Mulvany said. Even experienced practices may face struggles under the proposed rule. Donald Fisher, PhD, president and of AMGA, formerly the American Medical Group Association, said in a release that ‘we remain concerned that qualifying as an APM remains challenging at best, even for AMGA members, many of whom are very experienced with risk-based payment models.’” (HFMA, 4.28.16)

Merit-Based Incentive Payment System (MIPS)

The Merit-Based Incentive Payment System is a new program in the Medicare fee-for-service payment system. It consolidates three existing programs—meaningful use (MU), the Physician Quality Reporting System (PQRS), and the Value-Based Payment Modifier (VBPM)—into a single program. MIPS is mandatory for providers not participating  in Advanced Payment Models.
According to the April 2016 Notice of Proposed Rulemaking (NPRM), there is a two-year delay between performance year and payment year. The MIPS will grade individual EC performance in four categories to generate a composite score on a 0- to 100-point scale. 

Screen Shot 2016-06-21 at 7.31.35 AM

Exemptions

Proposed Rule

Under the proposed rule, clinicians newly enrolled in Medicare were exempt from MIPS, as are those with less than or equal to 100 Medicare patients and less than or equal to $10,000 in Medicare receipts. MIPS does not apply to hospitals or facilities nor to clinicians participating in an Advanced APM.

Final Rule

CMS Exempts Two Thirds of Clinicians From MIPS. “In the final regulations for the Medicare Access and CHIP Reauthorization Act (MACRA) issued last October, CMS predicted that between 53% and 57% of Medicare providers would be exempt from MIPS. But when the letters went out to practices, CMS excluded 65% of them… CMS earlier estimated that 32.5% of clinicians who take Medicare are excluded from MIPS because they don’t have at least $30,000 in annual Medicare revenues. In addition, CMS exempts clinicians who are new to Medicare or who earn a specified share of their income from advanced alternative payment models.” An online lookup tool enables clinicians to determine whether they have to participate in MIPS. (Medscape, 5.12.17)

Quality Performance

The Quality performance category makes up 50 percent of an EC’s total score in year one. The Physician Quality Reporting System (PQRS) and the quality component of VBM are replaced by this category. The NPRM proposes that ECs select six measures, as opposed to the currently required nine measures under PQRS, to satisfy the Quality category. CMS proposed expanded measure options to allow ECs to select the six measures that are most applicable to their specialty.

Analysis

  • According to Mingle Analytics (6.22.16) “Reporting as an individual or a group, using individual measures, instead of reporting on 50% of your eligible patients, you will be required to report on 90% of ALL patients from all payers. Since a cross-cutting measure will still be required, and cross-cutting measures, by definition, are broadly applicable to almost all your patients, this means that you could have to report on every single patient in your practice. These two changes significantly increase the workload to successfully submit data for the Quality Performance Category. Given our experience, the burden of reporting for these types of practices—on paper, or without reporting from their EHR will be ENORMOUS.” 
  • NQF Coalition Calls for Removing Ineffective Quality Measures. “The National Quality Forum’s Measure Applications Partnership… looked at measures used in the Merit-Based Incentive Payment System of the Quality Payment Program, which, under the 2015 Medicare Access and CHIP Reauthorization Act, changes the way Medicare pays doctors… It did not recommend removing measures from MIPS, but said that those programs needed higher-value measures, including outcome measures.” (Modern Healthcare, 3.16.17)

Cost/Resource Use

Cost and Resource Use are used interchangeably in the NPRM. Cost will account for 10 percent of the total score in year one. This performance category replaces the cost component of the Value-based Modifier (VBM) program and is based on Medicare claims. Since this performance category is based on Medicare claims, ECs are not required to report on requirements; instead, CMS will calculate this category based on Medicare claims submitted. To remove the one-size-fits-all standard previously held by VBM, CMS will use over 40 episodic-specific measures when calculating an EC’s score under the Cost category to account for differences between specialties.

Clinical Practice Improvement Activities (CPIA)

Unlike the other three performance categories under MIPS, CPIA is new. It is proposed that CPIA would make up 15 percent of the total score in year one. Similar to the Quality measure, ECs will have the opportunity to select from a large list (more than 90 activities) that allow the EC to meet both the reporting requirements and their practices’ goals. Clinicians are expected to be rewarded for activities that focus on care coordination, patient safety and beneficiary engagement. Additionally, CMS proposes awarding full credit under CPIA to ECs who participate in patient-centered medical homes (PCMHs) and half credit to those participating in non-Advanced APMs.

Advancing Care Information (ACI)

ACI replaces Medicare meaningful use (MU) and accounts for 25 percent of the total score in year one. The NPRM suggests that ECs select from customizable measures that reflect their day-to-day activities, emphasizing interoperability and information exchange. The biggest difference between Medicare MU as it stands today and the ACI performance category is that there will no longer be an all-or-nothing approach and ECs can receive partial credit.
MIPS clinicians can report as an individual, group or through third-party data submission entities specifically, qualified registries, QCDRs, health IT vendors, and CMS-approved survey vendors who would have the ability to act as intermediaries on behalf of MIPS eligible clinicians and groups for submission of data to CMS across the quality, CPIA, and advancing care information performance categories.

  • Gear Up Now to Get Higher Medicare Payments in 2019. According to CPA and MBA Ronald Sterling, MIPS Advancing Care Information (ACI) “consists of two separate components: a base score and a performance score. In 2017, physicians can earn credit toward the base score by performing five action items: protecting patient information; e-prescribing; providing patient access; sending a summary-of-care record; and accepting a summary-of-care record. Earning base credit requires only one instance of a measurable item, such as providing one patient access to their medical records. However, failure in any one of the base score measures results in an ACI score of zero because you cannot receive any performance credit if you haven’t met all base measures. To earn credit toward the performance score, you must maximize your support of several other measures, including providing electronic patient education and sending a secure message to a patient. For example, you only need to provide a single patient with electronic access to meet the base requirement, but the performance score is calculated from your total patient counts for each relevant measure. If 30% of your patients can access electronic information and you send half of them a secure message, then you get 6 points out of 20 for patient access and 1.5 points out of 10 for secure messages. The combined base and performance score is structured so that you can achieve a less-than-perfect performance and still earn the full 25% ACI portion of the MIPS score. You have the opportunity to earn more than 130 points, but 100 points earns you the maximum 25% ACI portion of MIPS.” (Medscape Business of Medicine, 12.29.16)

MIPS Reimbursement

Physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists will receive payment adjustments in 2019 for their 2017 performance; other health professionals are expected to become eligible in 2021. ECs are scored on a 100-point scale, with each performance category accounting for a specific percentage of points. CMS will calculate the total performance score for each EC, then compare it with all other MIPS ECs to determine the respective Medicare Part B payment adjustments.
ECs participating in the MIPS will be eligible for positive or negative Medicare payment adjustments that start at 4 percent and gradually increase to 9 percent for 2022. The threshold for these payment adjustments will be the mean composite score for all MIPS-eligible professionals during the previous performance period. Distribution of payment adjustments will follow a bell-shaped curve, (i.e., will be budget-neutral).

  • ECs who score at the threshold (i.e., earn the mean composite score) will receive no payment adjustment.
  • ECs whose composite score is above the mean will receive a positive payment adjustment on each claim for the following year.
  • ECs whose composite score is below the mean will receive a negative payment adjustment on each claim for the following year.
  • ECs with high composite scores will be eligible for a positive payment adjustment that is up to three times the baseline positive payment adjustment for a given year. For example, the baseline positive payment adjustment for 2019 will be 4 percent, so high performers will be eligible for a positive payment adjustment of up to 12 percent. For 2019 through 2024, an additional positive payment adjustment of up to 10 percent will be available to exceptional performers.
  • Beginning in 2026, all ECs participating in the MIPS will be eligible for a 0.25 percent increase in their payments each year.
  • According to law firm Proskauer (5.12.16), “MIPS would distribute payment adjustments to between 687,000 to 746,000 eligible clinicians in 2019 based on MIPS eligible clinicians’ performance in the four performance categories. CMS hopes to achieve budget neutrality with equally distributed negative payment adjustments ($833 million) and positive payment adjustments ($833 million), with approximately $500 million distributed in exceptional performance payments.”

Impact on Clinician Revenue

  • MACRA to Cut Physicians’ Medicare Revenue, Study Says. “The RAND forecast of diminished Medicare revenue didn’t shock Shawn Martin, the senior vice president for advocacy, practice advancement, and policy at the American Academy of Family Physicians. ‘We anticipated that MACRA would reduce spending in the healthcare system, and even some kinds of spending on physician services,’ Martin told Medscape Medical News. The low end of the RAND estimate — $35 billion less in physician revenue over 15 years — isn’t so worrisome on an annual basis, but the upper end of $106 billion is, said Martin… Hospital-based physicians, in contrast, may bear the brunt of MACRA cost savings. The RAND study projects that MACRA may reduce Medicare spending on hospital services by as much as $250 billion over 15 years. With improved ambulatory care reducing the number of emergency department visits and hospital admissions, ‘physicians in these settings may see a revenue reduction,’ Martin said… ‘In real terms, payment rates are decreasing,’ said Dr Hussey. Dr Hussey’s observation isn’t exactly ‘new news,’ as they say in journalism. The office of chief actuary in CMS reached the same conclusion in 2015. Its analysis of MACRA predicted that physician revenue from Medicare would not keep pace with their practice costs in the long run, which could drive them out of the program.” (Medscape News and Perspective, 4.20.17)
  • Specialists Risk Wide Swing in Payments Under MIPS Proposal, Avalere Says. “Medicare payments to some specialists could rise or fall by as much as 16% for the 2018 performance year, if CMS finalizes plans to change how it calculates Merit-based Incentive Payment System (MIPS) adjustments, a new Avalere analysis concludes. Rheumatologists, oncologists and ophthalmologists are among specialists that bill for more Part B drugs and could see large payment swings. Under the proposed rule, Part B drug payments would now be factored into a physician’s total billed Medicare allowed charges when determining MIPS payments. That’s a change from pre-MIPS programs like Meaningful Use and the Physician Quality Reporting System, which only consider Medicare physician fee schedule services, the authors say.” (Healthcare Dive, 10.6.17)

MIPS Repeal

  • MedPAC Urges Repeal of MIPS. “The CMS estimates that up to 418,000 physicians will be submitting 2017 MIPS data. But MIPS is severely flawed, according to MedPAC. It is designed primarily to measure how doctors perform, such as whether they ordered appropriate tests or followed general clinical guidelines, rather than if patient care was ultimately improved by that provider’s actions… To that end, the Commission suggests junking MIPS. Then, all Medicare physicians not in an APM would have 2% of their payments withheld.” (Modern Healthcare, 10.5.17)
  • MEDPAC Sinks MIPS, Recommends Alternative Program. “The panel had previously ruled out a straight ‘repeal’ of MIPS. The decision was between two models: MIPS and the VVP. The VVP involves gutting the MIPS and replacing it with a design that includes an across-the-board withhold for all fee schedule payments. (In the past, MedPAC’s staff suggested a 2% withhold as an example, but that percentage has not definitively been decided.) Clinicians then choose to either join a voluntary group or to engage in an advanced Alternative Payment Model (A-APM) to receive the withheld amount. Those who do neither, lose their withhold. Clinicians who join voluntary groups will be assessed based on the performance of the group using population-based measures related to clinical quality, patient experience, and value… MedPAC, whose 16 members include physicians, healthcare executives, and other policy experts charged with advising the Department of Health and Human Services on Medicare policy issues, has been questioning the worth of MIPS since last January.” (MedPage Today, 1.12.18)
  • Will MACRA Improve Physician Reimbursement? “Although I agree with MedPAC about the problems it has identified, I am also concerned about the commission’s proposal… I have several suggestions. The first is that CMS use its Innovation Center (CMMI) to try out the MedPAC proposal as quickly as possible. A pilot program would provide real-world evidence as to whether this strategy is an improvement over the MIPS in terms of helping clinicians improve their practice and helping beneficiaries identify the health care organizations that offer better outcomes for their needs. It would also test whether CMS can perform the claims-payment and other analyses that would be required under the proposal. CMMI could also quickly start a test of a primary care APM that has been proposed by the American Academy of Family Physicians and recommended by the physician payment technical advisory group established by MACRA.” Wilensky, Gail. (NEJM, 4.5.18) 

Analysis of MACRA Statute

  • Party on Medicare SGR’s Grave May End in Hangover. “Physicians have been the most significant holdout in the industry’s movement away from the fee-for-service payment system, said Blair Childs, senior vice president of public affairs at Premier, an alliance of hospitals and other providers working on alternative payment models. ‘This makes it starkly clear. There’s no question that everyone’s being pushed to alternative payment models,’ Childs said. ‘Physicians are going to start to engage in a way they haven’t before.’…’The idea that this is a permanent fix is false,’ said James Capretta, a visiting scholar at the American Enterprise Institute who previously served as a top GOP healthcare staffer in both the House and Senate. ‘I just think that’s total folly.’ But Paul Van de Water, a senior fellow at the left-leaning Center on Budget and Policy Priorities, points out that nothing is permanent in healthcare because the dynamics are constantly shifting.” (Modern Healthcare, 4.15.15)
  • The Fix to the Doc Fix is No Fix At All. “The heart of [MACRA] is a new, two-tiered indexing system for physician fees. Physicians who agree to participate in Medicare Accountable Care Organizations (ACOs) — or in similar structures established by the Medicare bureaucracy — will receive a permanent 0.75 percent increase in their fees each year. Physicians that don’t join an ACO will be placed into a new Merit-Based Incentive Payment System, or MIPS. Under MIPS, the Medicare bureaucracy will assess the ‘quality’ of a physician’s services to patients and reward or penalize them accordingly…By 2019, the actuaries assume that 60 percent of all physicians taking care of Medicare beneficiaries will be part of an ACO, up from 25 percent today. By 2038, they assume that 100 percent of physicians participating in Medicare will be a part of an ACO or a similar structure invented by the Medicare bureaucracy.” Capretta, James. (American Enterprise Institute, 4.15.15)
  • Physician Analysis of MACRA. “This is an analysis of HR2, the Medicare Access and CHIP Reauthorization Act of 2015, referred to as the ‘doc fix’ bill. The bill does end SGR permanently and provide 0.5% payment increased for a few years. However it vastly expands the pay for performance control structure over Medicare patients and their doctors. This expansion is done in ways that violate large amounts of FMA and AMA policy. There is far more harm contained in this bill than benefit. Some may describe this bill as a ‘reality’ we must accept. They may say that we must be ‘pragmatic’ and that we can minimize the impact on doctors later in rule making. However, the FMA has never merely accepted bad legislation and bad health care policy as a ‘reality’ we must ‘pragmatically’ accept and hope to address through damage control later on.” McKalip, David, MD. (Florida Medical Association, May, 2015)
  • The Repeal of Medicare’s Sustainable Growth Rate for Physician Payment. “The momentum in Washington for continued payment reforms, however, is strong. The repeal of the SGR is the carrot; the far-reaching payment reforms that the legislation facilitates are the stick… In 2025, the $500 million in annual updates for exceptional performance and the 5% annual bonus are scheduled to expire, ‘resulting in a payment reduction for most physicians,’ as the CMS Office of the Actuary has noted. The momentum for payment reform and the specific payment mechanisms notwithstanding, physicians are likely to advocate for Medicare payment updates that at least keep up with inflation and the cost of living. At some point, the cumulative effect of the new payment updates will not keep up with physician costs, unless the volume and cost of services substantially decrease, which is the same underlying issue as with the old payment updates. The SGR formula lasted 18 years. Within the decade, its replacement is likely to be under scrutiny as well.” Steinbrook, R. (JAMA Network, 5.26.15)
  • Physician Payment Reform In A Post-SGR World: Challenges Remain. “Value-based health care should be the goal of any health reform initiative. However, even with SGR out of the way, there are major challenges to achieving that goal, including the lack of an agreed-upon, patient-centered definition of value; a shortage of meaningful performance metrics; and a deficiency of accounting systems capable of reflecting the true cost of delivering care… According to a 2014 RAND report that looked at 49 studies examining the effect of P4P on process and intermediate outcome measures, the overall results of the studies were mixed, and any identified effects were relatively small. In short, ‘The evidence from the past decade is that pay for performance had modest effects on closing the quality gap,’ according to Cheryl Damberg, the study’s lead author… Linking more and more physician income to meaningless quality measures or mandating participation in undeveloped APMs will do little more than add to the already considerable non-clinical burden that physicians face and may force many physicians to abandon private practice in favor of employment, thereby accelerating the current trend toward consolidation. Worse yet, physicians may choose to leave practice altogether. Greater effort should be made to develop small, easily reportable, meaningful, specialty-specific core sets of patient-centered outcome measures. In addition, clearer principles and a realistic blueprint are needed before rushing ahead on physician payment reform.” O’Shea, John. (Health Affairs, 9.3.15)
  • Meaningful Use is Not Dead: It’s Reincarnated. “MIPS will entail parts of both the PQRS and MU programs. And doctors no longer have any choice in it. If we want to be paid for our services, we must comply. It is now federal law. Doctors and other providers will be paid based on their data and outcomes, not the services they provide to their patients… Who will get paid more under MIPS? The doctor who spent more time and effort with the pt or the doctor with healthier patients? It seems counter-intuitive but time and effort will not be appreciated under this system. We will be penalized for our patients’ bad choices and disincentivized to make the effort to get them to change. In fact, patients who are more complicated and have more chronic diseases are going to be greatly harmed under this system. They need more time and care but doctors cannot afford to do it for free. The more ill patients will find it hard to access the medical system.” (Med City News, 1.18.16)
  • If You Can’t Measure Performance, Can You Improve It? “MIPS is an outgrowth of a decade of smaller pay-for-reporting and pay-for-performance programs. Realizing that physicians basically ignored the small rewards and penalties limited to 2% of Medicare physician payments, Congress raised the financial stakes enormously, making sure physicians pay attention… Within a few years, MIPS will publish a performance scorecard for each physician participating in Medicare. But performance on a few, random and often unreliable measures of performance can provide a highly misleading snapshot of any physician’s value (http://bit.ly/1cU6jtK)… Having government rate physicians would be a step too far even if we had important and valid measures of physician performance. Practical challenges aside, pay for performance for health professionals may simply be a bad idea. Behavioral economists find that tangible rewards can undermine motivation for tasks that are intrinsically interesting or rewarding. Furthermore, such rewards have their strongest negative impact when they are perceived as being large, controlling, contingent on very specific task performance (http://bit.ly/1OB5Lx9), or associated with surveillance, deadlines, or threats, as with MIPS (http://bit.ly/1qhAzql).” (JAMA, 2.16.16)
  • MACRA: A New Law, but with what Consequences? “MACRA may bring with it some unintended consequences as well. Doctors and hospitals may limit or alter care as a result of the new regulations, believing that less is now more. Complex cases and unreliable patients may be avoided as they will increase the cost of care and decrease profit. Providers may manipulate data in order to meet the requirements, limit penalties, and maximize profits. EHR data may be hacked and personal health information may not be protected. Because the government wants to remain budget neutral, it could lead to draconian reimbursement cuts similar to SGF, causing doctors to eventually drop out of Medicare completely. The final effect of this new legislation, whether intended or unintended, may be a forceful shift into a single system that is run by the federal government. Socialized healthcare in America, whether good or bad, is a separate debate.” Ferenz, V. (Seton Hall, 2016)

Impact on Small Practices

MACRA 2016 Proposed Rule 

MACRA 2016 Final Rule

Impact of the 2016 Presidential Election

With the election of President Donald Trump, and orthopedic surgeon and former Georgia representative Tom Price at the helm of the Department of Health and Human Services, changes to MACRA regulations were considered likely.

  • Republicans Face Headaches Replacing ACA. “Predictions are split as to the new administration’s impact on the ACA’s pay-for-performance (P4P) programs. ‘Value-based’ projects developed by the Center for Medicare and Medicaid Innovation (CMMI) are here to stay, according to Modern Healthcare. Joseph Antos of the conservative American Enterprise Institute says the new administration may lessen regulatory burdens on providers and revisit the Medicare Access and CHIP Reauthorization Act and its emphasis on accountable care organizations (ACOs). ‘ACOs are a top-down approach that has shown limited success in producing shared savings,’ he argues. ‘The real success stories in making health care more efficient come from individual organizations, like Geisinger and Mayo, which did it voluntarily. They didn’t have Washington telling them what to do.’ Managed Care Magazine maintains that private entities will continue their P4P experiments, and that Congress, previously skeptical of CMMI, could find Medicare P4P ‘more appealing under their own supervision.’ Trump’s pick for HHS secretary, Georgia Rep. Tom Price, MD, for example, supports quality measurement, but believes outcome targets should be approved by medical specialty organizations.” (The National Psychologist, 1.23.17)
  • MGMA Advises New HHS Secretary on MACRA Implementation. “In a letter to HHS Secretary Tom Price, MD, MGMA made suggestions regarding topics including administrative simplification, the Merit-based Incentive Payment System (MIPS), alternative payment models (APMs), EHR certification, and the Stark Physician Self-Referral Law. In terms of simplifying the administrative process, MGMA suggests the HHS cut costs by improving HIPAA and engaging with leaders of medical groups in the healthcare industry to identify appropriate administrative standards to reduce costs in other ways.
    • To ease the transition to MIPS, MGMA suggests reducing the cost and reporting burden of the program through a 90-day reporting period, among other suggestions. A 90-day reporting period has been a frequent recommendation since the program’s inception.
    • Advance APMs, the other pathway for eligible clinicians to benefit from MACRA incentives, should be pushed as a way to save health organizations expenditure, according to MGMA, which also suggests HHS push the Physician-Focused Payment Models Technical Advisory Committee (PTAC) to accelerate the development of qualifying payment models for providers.
    • Additionally, HHS should work directly with the physician community when developing new models of care delivery and episode payments to speed the APM approval process.
    • MGMA suggests the Office of the National Coordinator for Health Information Technology (ONC) delay requirements to move to the 2015 CEHRT requirements and provide greater flexibility in certification standards and simplify the Federal Physician Self-Referral Law.” (EHR Intelligence, 2.14.17)

Rule-making Under Trump

The Centers for Medicare and Medicaid Services’ (CMS) proposed 2018 rule was released June 20, 2017, for the Quality Payment Program (QPP) and the Merit-Based Incentive Payment System (MIPS) track.

  • AMGA’s Ambivalent First Reaction to the Quality Payment Program’s Proposed Rule Release. “In their initial statement in the hours after the proposed rule’s release, AMGA’s leaders said,  ‘AMGA thanks the Centers for Medicare & Medicaid Services (CMS) for its efforts in drafting the proposed rule to implement the Quality Payment Program (QPP) for 2018. AMGA recognizes the burden the Medicare Access and CHIP Reauthorization Act (MACRA) places on small practices and appreciates the options for them to participate. However, AMGA remains concerned the proposed rule delays the transition to value and does not recognize the investment that AMGA members have made in preparing for a value-based health care system.’” (Healthcare Informatics, 6.20.17)
  • Medical Societies Praise Draft MACRA Rules for ‘Flexibility.’ “Among the steps CMS took in this regard, the most important was to exclude from the Merit-Based Incentive Payment System (MIPS) eligible clinicians and groups that have Medicare Part B-allowed charges of $90,000 or less or that care for 200 or fewer Medicare Part B beneficiaries. According to the proposed rule, this will exclude about 134,000 additional clinicians from MIPS. Moreover, CMS said, the new threshold will especially benefit small practices, which represent about 35% of all clinicians billing Part B services. Applying the 2017 criterion for participation, 27% of those eligible for MIPS would have come from small practices; with the latest threshold, that drops to 22%. Other provisions in the proposed rule that will be helpful to small practices include offering them the option to participate in ‘virtual groups’ for reporting purposes, continuing to allow the use of 2014-edition certified electronic health records (EHRs) alongside 2015-edition EHRs, adding a new hardship exception for clinicians in small practices under the Advancing Care Information category of MIPS, and giving them bonus points on their total score.” (Medscape, 6.21.17)

Guidance for Health Professionals

  •  How to Profit From MIPS, Explained in Plain English.
    • “First, determine whether you’re eligible for the program in the first place. Approximately one third of clinicians are ineligible. (CMS exempts eligible clinicians who did not see 100 Medicare patients during a reporting year or did not receive $30,000 in Medicare Part B total allowed charges.) If you’re not eligible, don’t participate, because you won’t glean any reimbursement boosts. The government has proposed excluding another third of clinicians as of 2018.
    • Next, dig into your management information system and pull your own data. Capture your performance for the quality measures you’ve considered for reporting. Stack them up against the measures to determine how many points you think you’ll get. If the answer is not many, then it may be best to default to the simple single-measure reporting allowed in 2017. If the data reveal that you’re performing the measure—even if you didn’t know you were—then it’s an opportunity to construct a plan to reach the 70-point exceptional performance threshold.
    • Finally, it pays (literally) to find out what’s at stake in the first place. If your Medicare payments were $40,000 last year, then the 4% penalty will result in a loss of $1600. You can mitigate that loss by just reporting one measure—‘yes,’ for example, to timely test results reporting, which is one of the improvement activities.
    • On the flip side, what’s to gain? Exceptional performance promises up to 12%, or $4800, in this case. A nice bonus, but one that you won’t see until 2019 (because the ‘scoring’ will occur over the next 24 months). But that would be a paltry return if your EHR system vendor charges you $20,000 for the upgrade required to report MIPS. Given the fact that you would probably be exempt in the program’s second year, on the basis of the recent proposed rule, that $20,000 upgrade would border on foolishness.” (Medscape, 9.6.17)

Resources