On April 16, 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), reforming the way physicians will be reimbursed in the future. The California Medical Association (CMA), American Medical Association (AMA) and nearly every other physician organization supported MACRA because it was intended to provide stable payment updates, significantly reduce the quality reporting program burdens, reinstate bonus payments, and allow innovative, physician-led alternative payment models.
MACRA repealed the flawed sustainable growth rate (SGR) payment system, which governed how physicians and other clinicians were paid under Part B of the Medicare program. It replaced the SGR, and its fee-for-service (FFS) reimbursement model, with two paths: The Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). The Centers for Medicare and Medicaid Services (CMS) will begin measuring performance for eligible clinicians in 2017, with payments based on those results beginning in 2019.
Two Payment Pathways: MIPS and APM
What is MIPS?
The Merit-Based Incentive Payment System combines the requirements of the Physician Quality Reporting System (PQRS), the Value-Based Modifier Program (VBMP), and the Medicare Electronic Health Record Incentive Program into a single, improved reporting program. It adds a fourth component to promote ongoing improvement and innovation to clinical activities.
MIPS will assess individual physician performance in four categories to generate a composite score on a 0- to 100-point scale that could affect a provider's Medicare reimbursement positively or negatively, starting at 4 percent in 2019 and gradually increasing to 9 percent by 2022. The categories are:
- Quality – based on PQRS
- Resource use – based on VBPM
- Advancing care information – based on meaningful use
- Clinical practice improvement activities – new program
The MIPS final rule, expected later this year, will determine how points are earned within each component and provide other details. Initially, most physicians are expected to be participants in MIPS.
Are there any exemptions from MIPS?
Yes. Exemptions from MIPS include:
- Providers in their first year billing Medicare Part B
- Providers that meet the low volume threshold, which is defined in the proposed rule as Medicare billing charges less than or equal to $10,000 and 100 or fewer Medicare patients in a year
- Providers who qualify for payment under APMs with the associated bonuses exempt from MIPS
Additionally, it is anticipated that providers practicing in rural health clinics or Federally Qualified Health Clinics (FQHC) are also exempt from MIPS.
What is an APM?
Clinicians who participate to a sufficient extent in advanced Alternative Payment Models would be exempt from MIPS payment adjustments and would qualify to receive a 5 percent lump-sum bonus on Medicare payments for 2019 through 2024. This bonus will be in addition to the incentive paid through existing contracts with the qualified APM (e.g., Medicare Shared Savings Program), demonstration program, etc. Beginning in 2026, participants will qualify for a 0.75 percent increase in payments each year.
Examples of APMs so far from the Center for Medicare and Medicaid Innovation (CMMI) include accountable care organizations (ACO), patient-centered medical homes, bundled payment models and other initiatives yet to be finalized.
In order for a provider to receive enhanced payment through a qualified APM, the APM must also meet the following eligibility requirements:
- Use of quality measures comparable to measures under MIPS
- Use of a certified electronic health record technology (CEHRT)
- Assumes more than a “nominal financial risk” for monetary losses OR is a medical home expanded under the CMMI
A physician receiving the designated percentage of Medicare payments or patients through a qualified, eligible APM based on the above requirements is considered a “qualifying participant” (QP).
How does this affect me?
All physicians will need to know which payment track they will be participating in — MIPS or Advanced APMs — and how quality and performance measurement will affect their Medicare payments. Physicians must also review and understand the preliminary lists of proposed measures to determine which are most aligned with improving their patients’ outcomes, and therefore most appropriate for their practices. Initially, most physicians are expected to be participants in MIPS. Physician practices will need to evaluate and address any gaps between current tracking and reporting capabilities and these new measures for 2017.
Practices that aren’t currently utilizing certified EHR technology will also want to consider doing so. Successful reporting on many of the performance measures for both APMs and MIPs will require increasing the use of CEHRT over time.
Penalties and bonuses
MIPS penalties and bonuses (for scores below or above the annual performance threshold) are on a sliding scale, with maximum MIPS bonuses/penalties of:
- 2019: +/- 4 percent
- 2020: +/- 5 percent
- 2021: +/- 7 percent
- 2022: +/- 9 percent
MIPS bonuses can go even higher (up to three times these levels). However, total MIPS bonuses and penalties must balance each other.
An extra “exceptional performance” bonus of up to 10 percent is available from 2019 through 2024, up to $500 million each year.
Physicians and other eligible professionals with substantial revenue from qualifying APMs receive a 5 percent bonus payment in 2019 through 2024.
What kind of support is available for small practices?
The U.S. Department of Health and Human Services (HHS) has announced that it will allocate $20 million annually for the next five years to fund “on-the-ground” training and education for clinicians in individual or small practices. Direct technical assistance through this program will target eligible clinicians in individual or small group practices of 15 or fewer, focusing on those practicing in historically under-resourced areas including rural areas, health professional shortage areas (HPSA) and medically underserved areas (MUA). CMS is also developing convenient, easily accessible educational materials that will focus on helping clinicians understand the programs and how to participate in them successfully.
Click here for resources from CMA, AMA and CMS.