MACRA Drops Payment Program That Resulted in Cuts to Doctors

Much remains unknown about how the Donald Trump Administration will impact healthcare.

One of Trump’s first actions was to issue an executive order aiming to roll back the Affordable Care Act. But there is general agreement that steps must be taken to reduce costs for Medicare while improving care, said Doral Jacobsen MBA, FACMPE, Chief Executive Office, Prosper Beyond, Inc. in Asheville, North Carolina.

“There are three things both parties agree with,” Jacobsen said. “One, we must bend the cost curve. Two, fee for service reimbursement is the enemy. Three, coordinated care is much better than uncoordinated care. These three things are the case regardless of political affiliation.”

Jacobsen said the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) eliminated the flawed sustainable growth rate (SGR) formula that had previously been used to calculate Medicare payments to physicians and had resulted in repeated proposals of severe payment cuts. She said that, generally speaking, MACRA provides a more predictable Medicare payment schedule and aims the Part B payment system away from a volume-based system toward a system that rewards value.

“Starting in 2017, providers will begin participating in either the Merit-Based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (AAPM) which will have financial impact (positive or negative) on Medicare payments,” said Jacobsen, who has made MACRA presentation to groups in Tennessee. “We are in the first performance period starting January of this year.”

Jacobsen said from January 2016 through December 2019, all physicians will receive a 0.5 percent payment increase each year on Part B Medicare reimbursements. And, starting in 2019, this baseline will be the starting point for incentives from either the MIPS or APM payment track. Starting in January 2020, there will no longer be automatic baseline payment increases each year.

“For those in the MIPS program, the payment adjustments will be exclusively based on performance within MIPS,” she said. “For those who participate in the AAPM track, from January 2019 through December 2024, physicians will receive an annual 5 percent lump sum bonus payment on total Medicare fee-for-service reimbursements, as well as any incentives that are built into their APM (e.g. shared savings, etc.).

‘Starting in 2026, physicians in the APM track will receive 0.75 percent and those in MIPS will receive 0.25 percent increase to Part B payments. So, over the next seven years, the variance from highest to lowest reimbursement is estimated to grow to 36 percent for Medicare patients, which is an amount of revenue at risk we have never seen before.”

The implementation of MACRA will build upon the quality and efficiency metrics that are already being measured in several Centers for Medicaid and Medicare Services (CMS) initiatives like PQRS, Meaningful Use and the Value Modifier (VM) program.

“As practices work to improve performance in these programs, it will have a halo effect on several CMS quality programs across the continuum,” Jacobsen said. “The key to identifying the opportunities lies in the data available through the VM program (QRUR). Assisting providers in understanding performance in this program benefits their practice and can have a positive impact on many other reform programs (e.g., bundle payments, etc.)”

Jacobsen said steps a practice can take to succeed in future programs include evaluating the MIPS and APM programs to identify which program is the most feasible and advantageous program for your practice.

“Learn about the various current APM programs potentially available to you (e.g., Patient Centered Medical Homes, Medicare Accountable Care Organizations, etc.),” she said. “Many of these provide support in a variety of ways, such as technology, reporting measures that will be helpful in the future If you are not already, begin to participate in PQRS and Meaningful Use programs And review feedback reports available, as part of the Value-Based Payment Modifier program – Quality and Resource Use Reports are located at https://portal.cms.gov.”

Many physicians are not quite prepared to comply with all the MACRA reporting requirements, said Jackie P. Boswell, MBA, FACMPE, assistant vice president, SVMIC, in Brentwood, Tennessee.

“The Physician Quality Reporting System and Meaningful Use are current Medicare quality reporting programs and even those have been a challenge for providers,” Boswell said. “The Value-Based Payment Modifier has been implemented in the past few years and many providers are unaware that program exists even though they face potential payment adjustments for scoring in the bottom percentile.

“MIPS will replace these current programs beginning January 1. CMS has relaxed some of the initial MIPS reporting requirements and implemented a ‘Pick Your Pace’ program for the 2017 Performance Year. This modification allows providers who are not ready to just report something to avoid a penalty. CMS realizes providers are not prepared to comply with their new quality payment programs for a full year.”

Boswell said it is important to get up to speed on MACRA because providers could end up being penalized eventually up to nine percent. She said there are many providers who are weighing the costs versus the benefits of complying with all of the requirements, and feel that the benefits may not outweigh the costs.

“The reporting is very confusing,” she said. “Providers aren’t sure what quality measures they should be reporting or how to report each of the categories. Even though the payment adjustments will now be combined, providers may still have to report using different systems such as registry and electronic health records (EHRs). My best advice is to start reviewing the reports that are available currently such as the Quality and Resource Use Report (QRUR), and their PQRS Feedback Reports.”

She encourages providers to talk to their EHR vendors to determine what capabilities they will have for MIPS reporting. She also recommends not reacting too quickly to pressures to spend large amounts of money to upgrade or replace their current systems. She encourages them to meet with their vendors and understand what solutions they will offer.

“Vendors might make it sound like you have to upgrade right now,” Boswell said. “Physicians need to be thoughtful about the process.”

Another reason it is so important for physicians to prepare for these quality payment programs is Medicaid and commercial payers have already begun implementing similar quality incentives and penalties. So in addition to the risk of non-compliance resulting in penalties from CMS, there is a risk of being eliminated or de-selected from commercial networks.

“Basically, the payers are moving from a fee-for-service, volume based environment to pay-for-performance,” she said.

There is a risk that some providers will be more selective accepting patients. Boswell said ideally the payers will be risk adjusting for patients with chronic conditions. She emphasized the importance of providers coding all chronic conditions, as well as patient non-compliance. Providers should familiarize themselves with the ICD-10 codes for patient non-compliance.

Boswell said that the healthcare industry has begun the process of paying providers based on value instead volume.

“And they are defining value as improving the quality of patient care and outcomes, better patient experience and lowering the cost of healthcare,” Boswell said. “The healthcare industry calls this the Triple Aim. Based on how the payer determines that the provider has performed in these three areas, he/she may receive an incentive or a penalty.”

Centers for Medicare and Medicaid Services Quality Payment Program