Dr. Amy Nguyen Howell
CMS reimbursement: MACRA’s impact in 2017
January 16, 2017
Hospitals, health systems and physician groups are in the process of deciding which of the two reimbursement paths they will take under the Medicare Access and CHIP Reauthorization Act (MACRA), which replaced the sustainable growth-rate formula for determining physician pay. The law will fundamentally change how Medicare pays physicians and other clinicians who participate in the Quality Payment Program (QPP).
With the January 2017 deadline fast approaching, MACRA has created a strong incentive for all U.S. physicians to move toward new care delivery strategies. Professional associations representing accountable physician organizations can provide resources to help physicians and physician organizations become successful under MACRA. This requires physicians to choose one of two paths to avoid a financial penalty: Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs), which both make up the QPP.
Merit-based Incentive Payment System (MIPS)
Under MIPS, physicians get a percentage adjustment to Medicare Part B payment based on a four-part score designed to measure quality, cost and value of care. For the transition year of 2017, CMS lowered the cost performance category to 0 percent and gave clinicians four reporting options:
• Option one: Report under MIPS, but only one quality measure, one improvement activity or the required advancing care information measures to avoid a payment reduction. Physicians who choose this option will not be eligible for a bonus in 2019.
• Option two: Report under MIPS for less than the full year, but for at least a full 90- day period in 2017 on one quality measure, more than one improvement activity or more than the required advancing care information measures to avoid penalties. This could lead to eligibility for a small bonus in 2019.
• Option three: Report under MIPS for the full year in 2017 on quality improvement activities and advancing care information to be eligible for the maximum 4 percent bonus, as well as a potential exceptional performer bonus in 2019.
• Option four: Successfully participate in Advanced Alternative Payment Models (APMs). Physicians who choose this option will earn a 5 percent bonus incentive in 2019 and be exempt from MIPS payment adjustments. In short, physicians reporting at least some data in 2017 will not receive a payment reduction.
Risk means the ability to lose money in the case of subpar performance. The transition to MIPS may be fairly straightforward for groups that are already pursuing value-based payment methods and have reporting mechanisms in place. Further, the transition to APMs may be natural for physician groups that are already taking on substantial risk.
Advanced APMs
In 2017, under the QPP, clinicians may earn a 5 percent incentive payment through sufficient participation in the following Advanced APMs:
• Comprehensive ESRD Care Model (Large
Dialysis Organization [LDO] arrangement)
• Comprehensive ESRD Care Model (non-LDO arrangement)
• CPC+
• Medicare Shared Savings Program ACOs — Track 2
• Medicare Shared Savings Program ACOs — Track 3
• Next Generation ACO Model
• Oncology Care Model (two-sided risk arrangement)
In 2018, it’s expected that physicians may also earn the incentive payment through sufficient participation in the following models:
• ACO Track 1+
• New voluntary bundled payment model
• Comprehensive Care for Joint Replacement Payment Model (Certified Electronic Health Record Technology [CEHRT] track)
• Advancing Care Coordination through Episode Payment Models Track 1 (CEHRT track)
These lists will continue to change and grow as more models are proposed and developed in partnership with the clinician community and the Physician-Focused Payment Model Technical Advisory Committee. To qualify as an Advanced APM participant, an eligible clinician must either:
• Receive at least 25 percent of the clinician’s payments for Medicare Part B-covered professional services through an Advanced APM, or
• See at least 20 percent of the clinician’s Medicare patients through an Advanced APM
The final rule excludes small practices from reporting requirements in 2017 due to the low-volume threshold, which has been set at less than or equal to $30,000 in Medicare Part B-allowed charges or less than 100 Medicare patients. It provides $100 million in education and technical assistance to small and rural practices in 2017.
Why is MACRA so critical to the U.S. health care system? According to the Congressional Budget Office’s most recent long-term projections — which include the estimated effects of MACRA — net Medicare spending will grow from 3 percent of GDP in 2015 to 4.2 percent of GDP in 2030, 5.1 percent in 2040 and 5.9 percent in 2050.
About the author: Dr. Amy Nguyen Howell is a board-certified family practice physician. She oversees all clinical programs at CAPG and supports advocacy work in Sacramento, Calif., and Washington D.C. CAPG’s Guide to Alternative Payment Models offers case studies that highlight CAPG member experiences with a range of APMs, from bundled payments to capitated, coordinated care.
With the January 2017 deadline fast approaching, MACRA has created a strong incentive for all U.S. physicians to move toward new care delivery strategies. Professional associations representing accountable physician organizations can provide resources to help physicians and physician organizations become successful under MACRA. This requires physicians to choose one of two paths to avoid a financial penalty: Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs), which both make up the QPP.
Merit-based Incentive Payment System (MIPS)
Under MIPS, physicians get a percentage adjustment to Medicare Part B payment based on a four-part score designed to measure quality, cost and value of care. For the transition year of 2017, CMS lowered the cost performance category to 0 percent and gave clinicians four reporting options:
• Option one: Report under MIPS, but only one quality measure, one improvement activity or the required advancing care information measures to avoid a payment reduction. Physicians who choose this option will not be eligible for a bonus in 2019.
• Option two: Report under MIPS for less than the full year, but for at least a full 90- day period in 2017 on one quality measure, more than one improvement activity or more than the required advancing care information measures to avoid penalties. This could lead to eligibility for a small bonus in 2019.
• Option three: Report under MIPS for the full year in 2017 on quality improvement activities and advancing care information to be eligible for the maximum 4 percent bonus, as well as a potential exceptional performer bonus in 2019.
• Option four: Successfully participate in Advanced Alternative Payment Models (APMs). Physicians who choose this option will earn a 5 percent bonus incentive in 2019 and be exempt from MIPS payment adjustments. In short, physicians reporting at least some data in 2017 will not receive a payment reduction.
Risk means the ability to lose money in the case of subpar performance. The transition to MIPS may be fairly straightforward for groups that are already pursuing value-based payment methods and have reporting mechanisms in place. Further, the transition to APMs may be natural for physician groups that are already taking on substantial risk.
Advanced APMs
In 2017, under the QPP, clinicians may earn a 5 percent incentive payment through sufficient participation in the following Advanced APMs:
• Comprehensive ESRD Care Model (Large
Dialysis Organization [LDO] arrangement)
• Comprehensive ESRD Care Model (non-LDO arrangement)
• CPC+
• Medicare Shared Savings Program ACOs — Track 2
• Medicare Shared Savings Program ACOs — Track 3
• Next Generation ACO Model
• Oncology Care Model (two-sided risk arrangement)
In 2018, it’s expected that physicians may also earn the incentive payment through sufficient participation in the following models:
• ACO Track 1+
• New voluntary bundled payment model
• Comprehensive Care for Joint Replacement Payment Model (Certified Electronic Health Record Technology [CEHRT] track)
• Advancing Care Coordination through Episode Payment Models Track 1 (CEHRT track)
These lists will continue to change and grow as more models are proposed and developed in partnership with the clinician community and the Physician-Focused Payment Model Technical Advisory Committee. To qualify as an Advanced APM participant, an eligible clinician must either:
• Receive at least 25 percent of the clinician’s payments for Medicare Part B-covered professional services through an Advanced APM, or
• See at least 20 percent of the clinician’s Medicare patients through an Advanced APM
The final rule excludes small practices from reporting requirements in 2017 due to the low-volume threshold, which has been set at less than or equal to $30,000 in Medicare Part B-allowed charges or less than 100 Medicare patients. It provides $100 million in education and technical assistance to small and rural practices in 2017.
Why is MACRA so critical to the U.S. health care system? According to the Congressional Budget Office’s most recent long-term projections — which include the estimated effects of MACRA — net Medicare spending will grow from 3 percent of GDP in 2015 to 4.2 percent of GDP in 2030, 5.1 percent in 2040 and 5.9 percent in 2050.
About the author: Dr. Amy Nguyen Howell is a board-certified family practice physician. She oversees all clinical programs at CAPG and supports advocacy work in Sacramento, Calif., and Washington D.C. CAPG’s Guide to Alternative Payment Models offers case studies that highlight CAPG member experiences with a range of APMs, from bundled payments to capitated, coordinated care.