How to Prepare for 2017 with MACRA Final Ruling

March 18th, 2016 /
Om Thakur
/ 6 Min Read

The Centers for Medicare and Medicaid Services has released the Final Rule on the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA), or what they call the Quality Payment Program. MACRA is designed to overhaul the current Medicare payment system into one that incentivizes quality and value over volume. Eligible clinicians will participate in MACRA through two avenues, depending on goals and eligibility: the Merit-Based Incentive Payment Systems (MIPS), or Alternative Payment Models (APM).

Though we’ve written many articles on MACRA, it is important to rekindle our understanding of it because of the changes in MACRA with the Final Rule, and the proximity of the performance period, January 1, 2017. Here is the summary of the 2000 page behemoth that is the Final Rule and answers the questions providers want to see.

What – MACRA’s Key Objectives

MACRA moves away from the largely volume-based fee-for-service model to a more value-based one which incentivizes value and quality. MACRA overhaul the Medicare payment system by:

  • Repealing the Sustainable Growth Rate (SGR): a method to control Medicare spending on physician services by “tying the allowable increases in physician spending to the growth rate in real GDP per capita”. While effective, in theory, linking reimbursement rates to the growth of the economy, without taking into account rising medical costs and specialty, created an ineffective system. Though there are many more factors that contributed to the ineffectiveness of the SGR, physicians simply were not reimbursed enough what they spent on services.
  • Providing two avenues for participation, the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models
    • Merit-Based Incentive Payment System takes features of the old quality reporting systems (Physician Quality Reporting System, Meaningful Use, Value-Based Payment Modifier) and combines them into one program, MIPS. MIPS grades eligible clinicians (ECs) on four performance category scores (quality, resource use, clinical practice improvement activities, and advancing care information), aggregated into a Composite Performance Score (CPS). This CPS is compared against the performance threshold, which results in a positive, neutral, or negative payment adjustment for the payment adjustment period  (usually a year after the end of the performance period).

      ACI Replaces Meaningful Use
      MIPS Performance Categories
  • Alternative Payment Models (APMs), such as the Medicare Shared Savings Program, are another way to participate in MACRA. Providers in APMs receive advantages to MIPS scoring and APM-specific rewards depending on the program. Most importantly, MACRA defines a certain amount of APMs to be Advanced APMs, which meet the highest criteria of value-based standards. Advanced APM participants are not subject to MIPS, and receive an annual 5% lump-sum bonus. Advanced APMs are a high-risk high reward type of Medicare participation.

Who – MACRA’s Participants

The relevant participants of MACRA, as defined by the Final Rule are:

  • MIPS Eligible Clinicians (ECs): for the first and second year for which MIPS applies to payments (and the performance period for such years) a MIPS EC is defined as a physician, a physician assistant, nurse practitioner, clinical nurse specialist, and a certified registered nurse anesthetist, and a group that includes such professionals. MACRA also provides flexibility in the third and fourth years of MIPS, regarding who can be defined as an EC, and therefore report through MIPS.
  • Qualifying APM Participants (QPs): these providers are those that participate in Advanced APMs, and receive the benefits from them.

Providers who are excluded from MIPS are clinicians who are new Medicare-enrolled eligible clinicians, Qualifying Participations (QPs) and Partial QPs, or those who do not exceed the low-volume threshold pertaining to the dollar value of billed Medicare Part B allowed charges or Part B-enrolled beneficiary count.

Four Options for MACRA Participation

January 1, 2017, is the start of the performance period for MACRA, but this date comes with a few caveats. The overwhelming amount of comments from healthcare organizations have persuaded the CMS to provide different options in which one can “pick their pace” with the upcoming performance period of MACRA. Keep in mind, MACRA participation is still mandatory for those eligible. We recently went over this in a relevant blog post, and to reiterate, the four options providers have are to:

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 in 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 qualify for a small positive payment adjustment. Slavitt does not specify the level of payment adjustment accrued with the select number of reporting days, nor 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 is 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 qualify for the payment adjustment period following.

4. Participate in an Advanced Alternative Payment Model in 2017

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 qualify for the 5 percent lump sum annual bonus.

MACRA In Summary

The CMS estimates MIPS would distribute payment adjustments to between approximately 687,000 and 746,000 eligible clinicians in 2019. Payment adjustments depend on provider’s MIPS CPS versus the performance threshold. The CMS estimates that payment adjustments will be equally distributed negatively ($833 million) and positively ($833 million), to ensure budget neutrality. However, there is an incentive to do well under MIPS, as the CMS estimates it will be providing $500 million in incentives for exceptional quality reporting.

On the APM side, the CMS estimates that between approximately 30,658 and 90,000 eligible clinicians would become QPs through participation in Advanced APMs, and are estimated to receive between $146 million and $429 million in APM Incentive Payments for payment judgment year of 2019. Both APM and MIPS are expected to drive quality improvement for clinical care provided to Medicare beneficiaries and to all patients in the healthcare system.

Check out the new CMS website for MACRA here.

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