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MACRA, Medicare, MIPS, & APMs: The Wild Ride Continues

By: Nextech | July 10th, 2015

MACRA, Medicare, MIPS, & APMs: The Wild Ride Continues Blog Feature

states.jpgSome of you may have read my blog article on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), and the decade long history of “doc fixes” leading up to it, posted back in April.  At that time, there were certain details of the new law that were still being ironed out.  And there are a number of things that still remain in development limbo when it comes to how MACRA is going to play out in the future (even Paul Spitalnic, Chief Actuary of the CMS, has claimed that MACRA is not sustainable past the year 2048). 

No matter what the future of MACRA turns out to be, those in the healthcare industry must deal with it in the now

Presently, MACRA is enacting significant changes to a number of key areas related to Medicare/Medicaid.  In this article we will be taking a look at some of these new rule changes, and how they might affect your practice.

MACRA Changes the Rules for Medicare Opt-Out

In the days before MACRA, all Medicare opt-out affidavits (signed by physicians and other healthcare providers) had to be renewed every two years.  Those who failed to submit signed renewals saw their opt-out statuses expire.  Well, guess what?  If you are sick and tired of having to do this every two years, I’d suggest you get ready to do the happy dance.

As of now, all opt-out affidavits that were signed on or after June 16, 2015 will automatically renew every two years

If your last renewal was before this date, unfortunately, you will still have to submit at least one more affidavit to your Medicare Administrative Contractor(s) before the renewals becomes automatic for you.  If you don’t, your opt-out status will be allowed to expire.  Look on the bright side, though—at least your next opt-out submission will also be your last.

Some of you may be thinking, But what if I change my mind later and no longer want to opt-out of Medicare?

No worries, people. MACRA has that covered.

If the time ever comes that you decide you no longer want your affidavit to automatically renew, all you have to do is submit your desire to cease automatic renewals (in writing) to the same Medicare Administrative Contractor(s) with whom you filed your last affidavit.  However, it’s also important to note that this written notification must be submitted 30 or more days prior to the start of your next opt-out period.

The Merit-Based Incentive Payment System (MIPS)

As explained in the previous MACRA blog article, annual physician payment adjustments will remain on the existing fee-for-service model for now.  This will change in 2019, however, when the basis for Medicare reimbursements shifts over to a new Merit-based Incentive Payment System (MIPS).  The MIPS is intended to integrate and simplify several of the current CMS quality programs, namely the Base EHR portion of Meaningful Use, the Physician Quality Reporting System (PQRS), and the Value Based Payment Modifier (VBM).  The goal of this is to cut down on a lot of the overwhelming administrative burdens these programs have come to put on providers who participate in them.

Unlike the way things are now, where physicians are forced to either participate in these programs or incur penalties, healthcare providers will each be given a cumulative score (based on participation in these programs and other efforts to improve patient care and optimize treatment outcomes).  Medicare reimbursement adjustments, under MIPS, will be increased or reduced based on this cumulative assessment score.

These MIPS assessments will be scored on a scale from 0 to 100, and point will be awarded based on the following criteria:

  • Quality: based on PQRS
  • EHR: based on Meaningful Use
  • Use of Resources: based on VBM
  • Clinical Practice Improvement Activities (CPIA): this is a new measure designed to award credits to healthcare providers who demonstrate a deliberate effort to improve clinical measures and/or participate in Alternative Payment Models (or APMs, which we will cover in the next section)

Unfortunately, since MIPS won’t go into effect until 2019, things are going to get worse before they get better.

Sorry… but the combined potential penalties (in payment reductions) for these three programs will increase to a max of eight percent between now and 2018.  When 2019 arrives and MIPS goes into effect, luckily, the max reimbursement reduction will drop down to four percent.  As providers adjust to the new system, it will start to increase once again—the potential reduction cap is set to reach nine percent by 2022 (at which it is expected to remain).  However, MIPS is supposed to provide an array of possible ways to earn positive scores intended to offset the high negative potential cap.

Every year, the Secretary of the Department of Health and Human Services will set a “performance threshold” to which all MIPS scores for that year will be compared.  This threshold will be based on the median or average of all recorded MIPS scores from the previous year.  Those who score below the set threshold will be penalized with reimbursement reductions, while those who score at or above it will receive increases and other rewards.  Any providers who score in the bottom quartile below the threshold will have their reimbursements immediately reduced to the maximum penalty for that year.  In the case that more physicians score below the set threshold than above it, then the increased rewards for those who score above the threshold are authorized to be increased by as much as three times the set increase cap.  This is because a certain amount of funding is allotted for rewards and reimbursements for each year.  Less people scoring on the positive end means each will get a bigger piece of the pie.  Let’s say, for example, that 70 percent of physicians scored below the threshold (all receiving a max reduction penalty of four percent in 2019) while only 30 percent scored above it.  This means that the 30 percent who scored above the threshold would receive a max award increase of 12 percent.

Each year, an additional $500 million will also be set aside for distribution among the top 75 percent of physicians who score above the threshold or (depending on how many physicians qualify in a given year) those who score in the top three quartiles above the threshold.

Alternative Payment Models (APMs)

In order to qualify for incentives and benefits under MACRA, physicians are required to participate in Alternative Payment Models (APMs) that are based on the same quality measures set down by MIPS.  Unfortunately, there is a certain amount of financial risk involved with APMs.

Since APM options are not yet available in much of the country, or are unavailable for providers with certain specialties, MACRA is trying to encourage providers to participate in developing a number of new payment models:

  • Models for specialty-specific practices
  • Models for practices with 15 physicians or less
  • Models developed together with private payers
  • Statewide payment models
  • Medicaid-based option models

The goal is to attract more participation in payment model creation from specialty groups and other providers by making it a part of the CPIA portion of MIPS.  The idea, one would assume, is that this will incentivize more providers to get involved.  You see, those who receive a significant enough percentage of payments through APM participation may be exempted from other requirements (possibly all other requirements) of the MIPS program.  APM participants will also receive a five percent lump-sum incentive award, which will remain in effect from 2019 to 2024, meant to offset any financial risks or monetary losses they might suffer from this transition.  Be warned, though.  Physicians who participate in APMs but fail to meet the threshold score set by HHS will be disqualified from the lump-sum payment (but they will still qualify for the MIPS exemption).

All APM participants, to any degree, will automatically receive half of the MIPS points from the CPIA section of the assessment.

The Evolution of MACRA

It would seem that MACRA is still very much a work in progress, and it still remains to be seen whether it will turn out to be Medicare’s saving grace… or if it will just take it crashing down in flames in new and creative ways.

Stick around, folks. 

No matter what MACRA does in the end, I predict that watching it play out is going to be pretty interesting.