Avoid MACRA Penalties Based on New Guidance

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Avoid MACRA Penalties Based on New Guidance

Andy Slavitt, acting administrator of the Center’s for Medicaid and Medicaid Services (CMS) has written a blog post on the implementation of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Slavitt’s post titled, “Plans for the Quality Payment Program in 2017: Pick Your Pace”, shows a way providers can participate in MACRA in a slower and potentially penalty-free way. This optional delay is possibly due to the overwhelming amounts of comments from healthcare organizations that MACRA implementation next year is too soon.

“We intend for the Quality Payment Program [MACRA] to allow physicians to pick their pace of participation for the first performance period that begins January 1, 2017,” says Slavitt. “During 2017, eligible physicians and other clinicians will have multiple options for participation. Choosing one of these options would ensure you do not receive a negative payment adjustment in 2019.”

A Quick Breakdown of MACRA

First, in case you’re unfamiliar with MACRA, let me give quick breakdown (more details can be found in my previous post). MACRA repeals the Sustainable Growth Rate (SGR), which was a method to control Medicare spending on physician services. The SGR adjusted the Medicare payment rates to physicians based on a number of factors; while effective in theory, it was a flawed system that rewarded based on the volume of patients, rather than the quality of care. Providers who have Medicare patients, can now participate in MACRA in two ways:

  • The Merit-Based Incentive Payment System (MIPS): MIPS is designed to take parts of the old quality reporting systems (Physician Quality Reporting System, Meaningful Use, Value-Based Payment Modifier) and combine them into a new more comprehensive system. MIPS has four performance categories: quality, resource use, clinical practice improvement activities, and advancing care information. MIPS gives providers a composite score based on the categories after the performance period is over. MIPS will adjust the provider’s base rate of Medicare Part B payment based on the composite score. Payment adjustments can go positive, neutral, or negative depending on the score.
  • You can participate in MACRA through  Alternative Payment Models (APMs): Alternative Payment Models is the other way of participating in MACRA. APMs are payment programs such as the CMS Innovation Center model and the MSSP (Medicare Shared Savings Program), which providers are eligible to participate in if they have enough Medicare B patients. Those who successfully participate in APMs receive favorable MIPs scoring, and APM-specific rewards. APMs are further broken down into tiers which increase the risk and reward factors of participating. Some APMs listed are Advanced APMs (AAPMS). AAPMs are the most advanced APMs that meet the highest standard of MACRA. Those who participate in AAPMs are not subject to MIPS, receive 5% lump sum bonus payments for years 2019-2024, and receive a higher fee schedule update for 2026 and onward.

Further information can be found on the CMS website. Providers now have four options on how to  participate in MACRA in the coming years. Let’s look at the options and weigh the benefits.

The Four Options in MACRA Participation, Pick Your Pace

1.      Test the program

The first options allow providers to submit some data to the Quality Payment Program, including data from after January 1, 2017, to a negative payment adjustment. This first option is designed for providers who may be newer, or want to test how quality reporting works in their practice. This option allows providers a “test run”, until fuller participation in 2018 and onwards.

2.      Participate for part of the calendar year

Providers are able to submit quality reporting data for a select number of days. This means that the performance period can start later than January 1, 2017, and providers may still quality for a small positive payment adjustment. Slavitt does not specify the level of payment adjustment accrued with the select number of reporting days, not does he mention if providers can receive a small negative adjustment if they have inadequate reporting through MACRA’s Merit-Based Incentive Payment System (MIPS), one of two ways of participating in MACRA.

3.      Participate for the full calendar year.

This option if for providers who believe that they can report through MACRA completely and accurately. Providers who have experience with Meaningful Use and the Physician Quality Reporting System (PQRS) may want to choose this option, because MACRA’s MIPS aggregates old quality reporting systems into one. Providers will begin their performance period on January 1, 2017, report through MIPS for an entire year, and may quality for the payment adjustment period following.

4.      Participate in an Advanced Alternative Payment Model in 2017

As we went over in our MACRA breakdown, providers may participate in MACRA in two ways: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Qualified professionals may choose to participate in Advanced Alternative Payment Models (henceforth called AAPMs), which have higher standards, but receive greater financial incentives. For example, in 2017 providers may choose to participate in MACRA through an AAPM like the as Medicare Shared Savings Track 2 or 3, and will quality for the 5 percent lump sum annual bonus.

Which MACRA Option Should You Choose?

The level of participation in MACRA depends on your comfort level and experience with quality reporting. If you have previously reported with programs such as Meaningful Use and the Physician Quality Reporting System, MACRA may not be much of a hurdle to transition to. Newer providers may look at the first “test run” option as a great way to participate in MACRA without penalties. Advanced Alternative Payment Models are seeming the most profitable option, though they have the highest standards. AAPM participation is very high risk, high reward.

Picture Credit: Maryland Healthcare Exchange Press Conference/Flickr