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Medicare Need-to-Know: Understanding the MACRA Final Rule

Jan 15, 2017

For Medicare providers, 2017 is the year to begin ramping up for Medicare's Quality Payment Program (QPP). Final rules authorized in the bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) will affect providers' Medicare payments beginning in 2019.

QPP is an intricate and complicated program. The good news is that the program's "pick your pace" component (see article on page 3) provides physicians with some flexibility in transitioning to performance reporting.

A New Framework

In essence, QPP creates a new framework for rewarding physicians who provide higher quality care. Specifically, the program establishes two payment tracks: the Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM).

At its heart, the MIPS program consolidates three existing quality reporting programs (PQRS, VBM and Meaningful Use) into a single performance program. Providers who meet specified quality goals are eligible for an "exceptional performance adjustment" funded from a pool of $500 million.

MACRA also creates new opportunities for physicians to develop and participate in alternative payment models such as accountable care organizations (ACOs), advanced primary care medical homes and new models that bundle payments for episodes of care.

To qualify as an alternative payment model under the MACRA statute, the model must use Certified EHR Technology, report quality measures comparable to measures under MIPS, and bear some degree of financial risk.

Physicians participating in an Advanced Alternative Payment Model are exempt from MIPS quality reporting and will receive a lump sum payment equal to 5 percent of the last year's fee for service payments.

It is expected that most physicians will follow the MIPS track until more Advanced APMs become available. With that in mind, the remainder of this article will focus on MIPS.

How MIPS Works

Starting in 2017, physicians who provide Medicare Part B services and are not part of a recognized Advanced APM will participate in the MIPS program.

Payment adjustments are determined using evidence-based and practice-specific quality data. Based on 2017 performance, eligible providers will see a positive, neutral or negative adjustment of up to 4 percent for covered professional services furnished in 2019.

Performance in the following four categories will ultimately determine the performance score and payment rate:

  1. Quality (replaces the Physician Quality Reporting System) – Providers must report on six quality measures, one of which must be an outcome measure. Quality measures will be selected annually and published by November 1 of each year. 2017 Category Weight: 60 percent.
  2. Clinical Practice Improvement Activities (new category) – CMS has proposed a list of more than 90 CPIAs. Note that patient-centered medical homes will automatically receive full credit in this category. Clinicians who do not qualify for the automatic credit must attest to three high-weighted or six low-weighted activities – or a combination of both – to achieve a total of 60 points. 2017 Category Weight: 15 percent.
  3. Advancing Care Information (replaces the Medicare EHR Incentive Program) – This transition from the Meaningful Use program focuses on health information technology implementation. For full participation in the ACI performance category, providers will need to fulfill these required measures for a minimum of 90 days:

    • Security Risk Analysis
    • e-Prescribing
    • Provide Patient Access
    • Send Summary of Care
    • Request/Accept Summary of Care
    2017 Category Weight: 25 percent
  4. Cost/Resource Use (replaces Value-Based Modifier) – This category will be calculated from adjudicated claims by CMS. No data submission by clinicians is required. Primary care will be predominantly measured on Medicare spending per beneficiary (MSPB) and total cost of care. 2017 Category Weight: Counted starting in 2018, when it will increase to 10 percent for the performance period.

You'll Have Some Flexibility

The MIPS performance threshold in 2017 will be three out of a possible 100 points. This means eligible physicians will only need to score three points to avoid a negative payment adjustment in 2019. On the downside, failure to report even one measure or activity in 2017 will result in a negative 4 percent adjustment in Medicare payments in 2019.

There are also a variety of exemptions. For example, you'll be exempt from participation in the Quality Payment Program if your Medicare allowable charges are less than $30,000 a year or you provide care for 100 or fewer Medicare fee-for-service patients in a year. Additional provisions provide allowances for low-volume practices.

MACRA has the potential to fundamentally change the way care is delivered in the United States. To stay in the game, Medicare providers will need to make 2017 a "learning year."

Please feel free to contact our office for guidance on the changes at hand.

Sources: American Association of Family Physicians, Centers for Medicare and Medicaid Services

Healthcare Practice Strategies - Winter 2017

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