Signed on April 16, 2015 by President Obama, the Medicare Access and CHIP Reauthorization Act (MACRA) provides funding for the Children’s Health Insurance Program (CHIP) through 2017 and makes sweeping reforms to Medicare physician reimbursement (see Congress Reauthorizes CHIP Through September 2017). Additionally, MACRA:
- Extends certain special payment add-ons for Medicare provider organizations, such as the ambulance add-ons and increased inpatient hospital payment adjustment for certain low-volume hospitals
- Extends funding for abstinence education, the personal responsibility education program, the health care work force demonstration program, and other programs
- Disallows Medigap plans, which cover 100% of out-of-pocket costs beginning with the first dollar
- Increases Medicare premiums for beneficiaries with higher income beginning in 2018
The largest provision of MACRA, and the one that is getting all the attention, is the Quality Payment Program, which replaces the use of the sustainable growth rate to adjust physician payments. The Quality Payment Program applies to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists participating in Medicare Part B. Within the program, there are two components eligible clinical professionals can participate in: the Merit-Based Payment System (MIPS) and the Alternate Payment Model (APM). Both components focus on moving from payment for services to payment for quality and value.
MIPS: The MIPs model applies to individual clinical professionals or group practices and will make positive, negative, or neutral adjustments to Medicare payments. Payment adjustments will be calculated using a weighted composite score compared to the MIPS performance threshold. The composite score consists of four categories: quality, resource use, clinical practice improvement activities, and advancing health care information. Payment adjustments will start at four percent in 2019 and eventually rise to nine percent in 2022. In 2026, in addition to the MIPS payment adjustment, the fee schedule will be increased .25% each year.
Quality is worth 50% of the composite score under MIPS, and as such, is one of the most important categories clinical professionals and group practices will report. Scoring on quality performance will be based on six measures that each clinician or group chooses from a list of proposed measures. At least one measure must be cross-cutting and one measure must be an outcome or high-value measure. Examples of measures clinical professionals and group practices can select include Diabetes: Hemoglobin Ale (HbAlc) Poor Control; Anti-Depressant Medication Management; Screening for Osteoporosis for Women Aged 65- National Clinical Registry 85 Years of Age; etc. Additionally, clinical professionals or groups can report on specialty measure sets, such as behavioral and mental health.
APM: The APM applies to individual clinical professionals or group practices participating in advanced alternative payment initiatives with nominal financial risk. This would include the following programs – Track 2 and 3 of the Shared Savings Program, the Next Generation ACO Model, Comprehensive End-Stage Renal Disease Care, Comprehensive Primary Care Plus (CPC+), and Oncology Care Model. Clinical professionals or group practices who meet the Medicare beneficiary or payment thresholds set by the rule will automatically qualify to receive a five percent lump sum bonus on their Medicare Part B payments. The bonus will be available from 2019-2024. Beginning in 2026, APMs will receive a .75% fee schedule increase each year.
The long and the short of it is even those clinical professionals and provider organizations that have been trying to avoid value-based payment will be forced—through their compensation—to address the issue of relative cost and quality. MACRA is essentially assuming that every clinical professional and every provider organization participating in the Medicare program is, in fact, not paid just for volume.
So who are the likely winners and losers in new world of MACRA? MACRA will benefit:
Organizations already participating in alternative payment models who have made investments in metrics-based performance improvement will be at an advantage, as the new rule offers the opportunity for an additional bonus payment and a fee schedule increase.
Clinical professionals who have embraced the medical home concept in their practices will benefit from better performance that results in rate increases. CMS has made clear that they are in full support of patient centered medical homes – clinical professionals participating in this model receive full credit in the clinical practice improvement activities category. CMS also intends for the expanded medical home initiative under the Center for Medicare and Medicaid Innovation to be included as an advanced payment model whether or not provider organizations take on nominal financial risk.
Electronic health record (EHR) and analytics companies – MACRA will drive demand for EHR systems and systems with reporting capabilities that can be used to improve clinical practice and provider organization performance. And, time is short – there is about seven months to get ready for the first reporting year, which begins January 1, 2017.
Digital health solutions that can prove a return-on-investment in terms of achieving bonuses – Clinical professional practices and provider organizations will look at ways to optimize performance using technology, assuming that the bonuses exceed the cost of the technology.
There are also stakeholders that are going to be at a disadvantage in the new world of MACRA:
Clinical professionals in solo practices will struggle. In their impact study of the rule, CMS has estimated that 87% of clinicians in solo practice will face negative payment adjustments under the MIPS model. And CMS’ estimates show that the more clinical professionals in a group, the less likely they are to face negative payment adjustments. For groups with 10 to 24 clinical professionals, 59.4% are expected to face negative payment adjustments while only 18.3% of groups of a 100 or more are expected to receive negative payments (see Proposed Rule: Medicare Program; Merit-Based Incentive Payment System & Alternative Payment Model Incentive Under The Physician Fee Schedule, & Criteria For Physician-Focused Payment Models).
Provider organizations in limited-risk APMs without real-time performance management systems will also be at a disadvantage. Those organizations will be less likely to achieve bonus payments – and will suffer from relatively flat payment rates.
The Track One Shared Savings ACOs won’t get an opportunity for enhanced payments. ACOs participating in track one of the Shared Shavings Program have been excluded from the advanced payment model because they do not have an opportunity to share risk. Clinical professionals under this model will participate in MIPs and eventually receive less favorable incentives as they are excluded from the bonuses in the APM.
For a more detailed look at MACRA’s Quality Payment Program and its implications be sure to check out: What Is MACRA & How Does It Affect Clinical Professionals?: An OPEN MINDS Market Intelligence Report. The report includes information on:
- The expected number of clinical professionals participating in the APM and MIPS programs
- A detailed timeline matching performance year to payment year and the bonuses available for the year
- Detailed information on how the MIPS score will be calculated and what standards clinical professionals need to meet to participate in the APM program
And, for more, don’t miss the upcoming web briefing, MIPS & APMs & MACRA…Oh My!, on June 30, featuring Ravi Ganesan, President, Core Solutions Inc.