How the finance runs under MACRA

The Medicare Access and CHIP Reauthorization Act of 2015, usually known as “MACRA,” has provided a latest approach to Medicare physician payment and two latest payment plans or schemes by replacing the oft-criticized Sustainable Growth Rate. During the time of late April, the key details encircling the law’s implementation were issued by CMS; although, it is very significant to note down that the final rule is yet forthcoming and various incorporate important changes in reaction to public comments made on the intended rule.
 
Many stakeholders are attempting to understand the implications of this vital legislation, physicians and other providers—whose reaction is believe to be very critical for the victory of MACRA—must be ready quickly and almost instantly make decisions over which incentive program to take and what proposed measures will give rise to the prospects for victory. Commencing on the day of January 1, 2017, the performance of physicians’ and other contributors’ will evaluate their payment rate updates. Due to the time needed to collect and evaluate performance information, spending and other performance steps in calendar year 2017 will gives the basis for physician payments in the year of 2019.

This post will attempt to give you a glance into the potential financial changes in physician payment deployed on the intended rule. We will concentrate on the financial flow of dollars that assist physicians and other providers to assess which way within MACRA to pursue and how best to forecast the affect on their payments. This piece will also give an overview for policymakers on the financial implications of several options physicians are actively weighing now as an outcome of MACRA.

GENERAL OVERVIEW OF MACRA

In accordance to the law, MACRA establishes two primary payment schemes that physicians accepting Medicare can select to be judged under:
1.    MIPS or The Merit-Based Incentive Payment System, which controls and manages bonuses or penalties deployed on the performance of physicians in contrast to other physicians on the basis of quality and value measures; or
2.     APM or The Advanced Alternative Payment Model, that previously give bonuses and then offers higher yearly fee updates in comparison to MIPS when physicians earn enough amount of their revenue through qualifying Medicare or passed private payer payment models that require accepting economical threat if expenses exceeds the targets.

Initially, the large majority of physicians and other contributors likely will be judged under the process of MIPS, with the help of CMS projecting in the intended rule that only 4 to 11% of Medicare providers will be eligible for the Advanced APM payment approach in its 1st year due to the strict standards of qualification. In contrast to the expectations depicted during the congressional debate over MACRA that was focused on motivating physicians to merge with APMs; the rules made by CMS will lead many to stay in MIPS for the foreseeable future.  

Payment in MIPS is deployed upon the performance of physician in contrast to entire other physicians in the program, with the bonuses and penalties compelled around the base fee-for-service (FFS) payment amounts and yearly payment updates. MACRA explicitly requires bonuses or penalties in MIPS—not engaging outstanding performance bonuses—to be budget neutral.
In contrast to MIPS, the Advanced APM program describes that physicians receive a fixed 5% bonus during each of the first 6 years and higher base payment amount updates from the year of 2026 onward than MIPS, with extra bonuses or penalties deployed on quality and cost performance under the Advanced APM agreements. Further adding to comparison with MIPS, bonuses in the Advanced APM program, as well as contractually highlighted bonuses or penalties, have no requirement to be budget neutral.

THE MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS)

MIPS contain 3 existing programs that explain bonuses or penalties of physician for Medicare physicians and other contributors into a latest system that makes a composite score deployed on:
o    The quality of care given (30% in the year of 2021 and beyond), as measured under present law;
o    Resource use (30% in the year of 2021 and beyond), which consolidates the “measures of resource use established for the value-based modifier under present law and, to the extent feasible, accounting for the charge of Part D Drugs”;
o    Meaningful use of EHRs (25%), established under present law to verify either a contributor is meaningfully utilizing EHRs; and
o    Clinical practice improvement activities (15%), a broad subsection that is decided by the Secretary.
    
Physicians and other contributors’ weighted scores in each of these segments for a year are aggregated into an overarching Composite Performance Score (CPS) for each and every practice. The CPS values are judged from highest to lowest, and the ranking of every score determines how provider payments are adjusted, explaining whether a bonus or penalty results as well as its size. The Secretary will select every year either the mean or the median of CPSs for that year to facilitate as the performance threshold above and below which physicians and other providers will get bonuses or penalties, respectively.

In the very beginning of 2019, 4% of a medical professional’s revenue developed through Medicare fee-for-service payments will be redistributed under the process of MIPS, rising to 9% by the year of 2022 and remaining at that level indefinitely. By making a comparison, under the 3 initial reporting programs, physicians in small practices were subject to combined penalties as high as 6% or bonuses up to 2%; huge practices were taken to maximum penalties and bonuses of 8% and 4%, respectively. 
The maintenance of budget neutrality requires that CMS pay the similar amount in bonuses as it gets in penalties. To make certain that penalties offset bonuses, the MIPS bonus percentages explained above are potentially based on a scaling factor of up to 3-times to sustain the budget neutrality.

In contrast to budget neutrality requirement, the law gave $500 million every year from 2019 to 2024 to grant “exceptional performance” bonuses to MIPS providers with the largest composite performance scores. The bonuses would be granted on the base of sliding scale up to as high as 10% added to the base MIPS bonus.

ADVANCED ALTERNATIVE PAYMENT MODELS (ADVANCED APMS)

The alternative payment models under MACRA should meet the criteria established by CMS to be designated “advanced.” Advanced APMs are termed as (i) calculating the physicians and other contributors in accordance to metrics similar to those of MIPS, (ii) needing providers’ use of certified EHRs, and (iii) holding contributors answerable or accountable for at least “nominal financial threat.” In the intended rule, CMS asserts which of its present APMs measure up to this “Advanced” threshold, involving:
o    Comprehensive Primary Care Plus (CPC+) Model;
o    Medicare Shared Savings Program ACOs, Tracks 2 and 3;
o    Medicare Next Generation ACOs;
o    Oncology Care Model (two-sided risk); and
o    Comprehensive End-Stage Renal Disease Care Model (Large Dialysis Organization arrangement).
Prominently unavailable from this list of proposed approved Advanced APMs are Track 1 MSSP ACOs and several bundled payment models.

By acquiring enough percentage of their revenue through an Advanced APM, physicians can get qualification for a bonus payment which is to 5% of their yearly fee-for-service revenue in years 2019-2024 and a 0.5%-point higher yearly fee rate increase in contrast to physicians and other contributors in MIPS each year starting in the time of 2026 (0.75% vs. 0.25%). Now the physicians can also be eligible by observing a sufficient percentage of their sufferers through an Advanced APM; eminently, the sufferer percentage thresholds are lower than the revenue percentage thresholds.

For physicians engaging in Advanced APMs, there are 4 ways to be eligible for the bonuses and higher payment updates of the Advanced APM track. The 4 categories for qualification are:

1. Acquire a minimum percentage of their Medicare Part B revenue through an Advanced APM;
2. During the initial time of 2021, gain a lower minimum percentage of their Medicare Part B revenue AND a minimum percentage of their revenue from entire payers by an Advanced APM;
3. Observe a minimum percentage of their Medicare sufferers through an Advanced APM; or
4. Initiating during the 2021, analyze a lower minimum percentage of their Medicare sufferers AND a minimum percentage of their sufferers from whole payers through an Advanced APM. 

Important to note down, if physicians and other contributors are failed to meet these minimums, they would not be eligible under the Advanced APM track. While the physicians and other providers engaging in APMs who get the lower “Partial Qualifying Provider” percentage thresholds for either revenue or sufferers can select to opt out MIPS reporting altogether, assuring that they’ll get neither a penalty nor bonus for the year. Moreover, the providers engaging in APMs that were not designated Advanced might yet be eligible as MIPS APMs and get certain automatic credit under the CPIA category.

CHANCE FOR LOW SPECIALIST PARTICIPATION IN THE ADVANCED APM PROGRAM

MACRA is likely to sustain to evolve and the All-Payer Combination Advanced APM choice will become present, making payment models established by private insurers increasingly available and permitting more payment models to avail “advanced” recognition.

Prominently, although, the “advanced” list doesn’t engage any of the present bundled payment models made by CMMI. This omission will be specifically crucial to specialists, as bundled payments depict a key share of their involvement in APMs and several proposed “advanced” APM qualifiers have more efficaciously engaged primary care physicians and other providers in contrast to specialists to-date.

CONCLUDING REMARKS

With only 6 months before the performance of physicians will have an effect on their payment under MACRA, physicians are immensely scrutinizing the 2 payment incentive programs and how they would fare under them. But most are worried about how best to navigate the several programs given the complexity of the regulations and choices. The deficiency of timely information with which to pursue their performance on a continual basis might further handicap the capability of physicians to make informed choices and make better their performance.

This proposed rule highlights several elements of the latest payment systems and the final rule will assist to clarify few remaining queries, several queries over moving parts remain, involving those regarded to: the uncertainty of movement between both pathways; the distinctive threats and rewards for MIPS vs APMs; and the chance for extra or additional payment models. These types of uncertainties have given stress over the viability of small practices in this atmosphere.

MACRA consolidates significant change from the status quo. It provides key promise to change—and hopefully make better—physician practice and shift payment from volume to value.