CMA - California Medical Association

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MACRA repealed the flawed sustainable growth rate (SGR) payment system, which governed how physicians and other clinicians were paid under Part B of the Medicare program.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.

CMS published the final rule to implement MACRA on November 4, 2016. Key highlights of the final rule include:

• Restores the 0.5 percent payment update for 2017
• Reduces by half the number of measures that physicians must report, from 30 to 15.
• Lets physicians pick their pace of participation, and will not penalize physicians who at least attempt to report on a few measures
• Only requires physicians to report for 90 days in 2017 to receive a bonus
• Providers will not be scored on "cost" (physician cost) in 2017
• Mostly eliminates the pass/fail system and will provide proportional credit.
• Expands the types of alternative payment models that can participate in MACRA, most notably Track 1 accountable care organizations (ACO). The final rule also reduces the financial risk requirements for APMs.
• For a summary of the final MACRA rule, visit https://qpp.cms.gov.

How does this affect me?
Physicians will need to decide 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 quality measures to determine which are most aligned with improving their patients’ outcomes, and therefore the best fit 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 electronic health record (CEHRT) 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.  

2017: Pick Your Pace

During the transition year 2017, eligible physicians and other clinicians have multiple options for participation. Choosing one of these options will ensure you do not receive a negative payment adjustment in 2019. These options and other supporting details are described fully in the final rule.

First Option: Participate for the full calendar year.
Those practices that were ready to go on January 1, 2017, simply submit Quality Payment Program information for a full calendar year. This means your first performance period began on January 1, 2017. For example, if you submit information for the entire year on quality measures, advancing care (EHR), and what improvement activities your practice is undertaking, you could qualify for a modest positive payment adjustment. We’ve seen physician practices of all sizes successfully submit a full year’s quality data, and expect many to do so.

Second Option: Participate for part of the calendar year.
You may choose to submit Quality Payment Program information for less than a year but for a full 90 days. This means your first performance period could begin later than January 1, 2017 but by October 2, 2017 and your practice could still qualify for a small positive payment adjustment. For example, if you report for part of the calendar year on one quality measures, more than one improvement activities or more than the required measures in advancing care, you could avoid penalties and qualify for a small positive payment adjustment. You could select from the list of quality measures and improvement activities available under the Quality Payment Program.

Third Option: Test the Quality Payment Program.
With this option, as long as you submit a minimum amount of data to the Quality Payment Program for 2017, you will avoid a negative payment adjustment. Simply report one quality measure, or one improvement activity or report measures of advancing care to avoid penalty. This first option is designed to ensure that your system is working and that you are prepared for broader participation in 2018 and 2019 as you learn more.

Fourth Option: Participate in an Advanced Alternative Payment Model in 2017.
Instead of reporting quality data and other information, the law allows you to participate in the Quality Payment Program by joining an Advanced Alternative Payment Model, such as Medicare Shared Savings Track 2 or 3 in 2017. If you receive enough of your Medicare payments or see enough of your Medicare patients through the Advanced Alternative Payment Model in 2017, then you would qualify for a 5 percent incentive payment in 2019.

However you choose to participate in 2017, we will have resources available to assist you and walk you through the process. And however you choose to participate, your feedback will be invaluable to building this program for the long term to achieve outcomes that matter to your patients.

Practices that are not exempt and choose not to report will be subject to a negative 4 percent adjustment for measure year 2017, in payment year 2019. For more information on providers that are exempt from MIPS, see “Are there any exemptions from MIPS?”

Need Help to Prepare?

What kind of support is available for small practices?
CMS has awarded $20 million to 11 organizations for the first year of a five-year project to provide on-the-ground training and education about the Quality Payment Program for clinicians in individual or small group practices. CMS intends to invest up to an additional $80 million over the remaining four years.

Health Services Advisory Group (HSAG) was awarded the contract to help small practices in Arizona, California, Hawaii, New Mexico and the U.S. Virgin Islands prepare for and participate in the new Quality Payment Program, established by MACRA. HSAG will provide hands-on training to help to small practices (15 clinicians or fewer), especially those that practice in rural and under-resourced areas. The training and education resources are now available and will be provided at no cost to eligible clinicians and practices. According to CMS, clinicians will receive help choosing and reporting on quality measures, as well as guidance with all aspects of the program, including supporting change management and strategic planning, and assessing and optimizing health information technology. For more details, click here.

Start by learning the basics using resources and tools from CMA, AMA and CMS. CMA members have FREE access to CMA’s reimbursement helpline for assistance with MACRA or other reimbursement issues. Call (888) 401-5911 or email economicservices@cmanet.org.

Path 1: MIPS

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
• Improvement activities – new program

An overview of the MIPS measures and categories is accessible on the CMS Quality Payment Program website.

In the MACRA final rule, CMS estimated approximately 600,000 providers will be evaluated under the requirements of the MIPS program. It will be imperative that physicians understand the criteria for scoring and applying payment adjustments under MIPS.

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.

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 $30,000 and 100 or fewer Medicare patients in a year
• Providers who qualify for payment under APMs with the associated bonuses exempt from MIPS

Additionally, eligible clinicians billing for items and services under an FQHC or RHC all-inclusive payment methodology are exempt from MIPS. However, eligible clinicians billing for Medicare Part B items and services at FQHCs and RHCs under the physician fee schedule are required to participate in MIPS and are subject to a payment adjustment.

Path 2: Advanced APM

What is an APM?
An Alternative Payment Model is a payment approach, developed in partnership with the clinician community, that provides added incentives to clinicians to provide high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population.

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 ACOs, patient-centered medical homes, bundled payment models and other initiatives yet to be finalized. The list of Advanced APMs is posted at https://qpp.cms.gov and will be updated with new announcements on an ad hoc basis

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 EHR technology
• 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).

For more information on determining if the Alternative Payment Model is right for your practice, click here or refer to the resources below.

MACRA 101: Education

Click here for resources from CMA, AMA and CMS.