MACRA: What’s Really in the Final Rule?

  • By Amy Maciejowski
  • November 15, 2016

In October, CMS finalized its rules for the Medicare Access & CHIP Reauthorization Act (MACRA) that overhauls Medicare payment to clinicians. Since then, our Public Policy team has pored over the final document to determine what this means for the health care system. Here’s what they’ve learned so far—and what you need to know.

The Two New Ways CMS Will Pay Clinicians

MACRA changes how clinicians are paid: for value rather than for the volume of patients they see. It creates the new Quality Payment Program (QPP), which comprises two payment options:

  • The Merit-Based Incentive Payment System (MIPS), which adjusts FFS payments based on quality, resource use, clinical practice improvement activities (CPIA) and advancing care information (ACI, a reformed health IT Meaningful Use program).
  • Alternative Payment Models (APM), which move away from FFS and toward population-based payments. APM clinicians who meet revenue and patient thresholds are considered Advanced APMs and earn automatic 5% bonuses on their Part B revenue.

How and When to Report Your Data to CMS

If your practice enters through MIPS, it will be required to report quality measures. CMS eased reporting requirements for the initial 2017 and 2018 transition years, to give practices the time to get familiar with reporting and to prepare themselves. (But don’t dawdle: reporting begins in January, and how practices perform then will affect how they are paid in 2019.) Practices have four options in the initial transition years:

  1. Reporting no measures in 2017 will result in a 4% penalty (authorized under the law) in 2019.
  2. Reporting any MIPS measures in 2017 will prevent 2019 payment penalties.
  3. Reporting on all MIPS categories in any 90-day period qualifies clinicians for modest bonuses. Performing in the top 25% qualifies for additional bonuses.
  4. Clinicians in approved Advanced APMs (AAPM) will receive automatic 5% bonuses if they meet patient or revenue thresholds.

CMS also expanded the number of low-volume clinicians who are exempt from MIPS: those with less than $30,000 in Medicare Part B charges or fewer than 100 Medicare patients. CMS estimates that 90% of all eligible clinicians and 80% of clinicians in small practices (fewer than 10 clinicians) will receive bonus or neutral adjustment in the 2017 performance/2019 pay year.

Your Benefits as a PCMH/PCSP Practice

MACRA presents a unique opportunity for NCQA-Recognized PCMHs and PCSPs: it gives them automatic full credit in MIPS for the CPIA category (which is 15% of the total score). Recognized PCMHs/PCSPs are also likely to succeed in other MIPS categories because they already focus on quality, costs and use of health IT.

Clinicians must be NCQA Recognized by October 1 to receive automatic CPIA credit for that year; non-recognized practices must report on individual CPIAs; specifically, at least two “high-level” or four “medium-level” CPIAs, or one high-level and two medium-level, if they are in small, rural, non-patient-facing or health professional shortage area practices.

What Will Practices Report On?

  • Quality. CMS provided several specialty-specific measure sets to help clinicians identify measures that apply to their practice. Clinicians must report at least six quality measures (including one outcome measure).
    • If no outcome measure is available, clinicians must report at least one other high-priority measure (Appropriate Use, Patient Safety, Efficiency, Patient Experience, Care Coordination).
    • If fewer than six measures apply to a practice, clinicians report on all applicable measures.
      • CMS will apply a “clinical relation test” data validation process to determine whether clinicians who report less than six could have reported more.
    • If clinicians report on more than six measures, CMS will score them all, and apply the six highest scores to the final MIPS score.

Most clinicians must report on all patients for MIPS, not just on Medicare enrollees. Quality measures represent a large portion of a practice’s overall MIPS scores in the first reporting period:          60% of MIPS scores for 2017/2019; 50% for 2019/2020, 30% thereafter. See the full set of 2017 MIPS quality measures here.

  • Resource Use. Practices aren’t required to report on this MIPS category. CMS will calculate scores using the Medicare Spending Per Beneficiary measure, as well as 10 episode-based measures for specific conditions/procedures. Resource Use will constitute 0% of MIPS scores for 2017/2019, 10% in 2018/2020, 30% thereafter.
  • Advancing Care Information (ACI). This category revises the old “Meaningful Use” program to reward progress in using health IT. Clinicians must report five measures (Security Risk Analysis, e-Prescribing, Provide Patient Access, Send a Summary of Care & Request/Accept Summary of Care) to earn half the ACI score. ACI constitutes 25% of the MIPS score.
    • Clinicians who report on all five measures can earn additional points based on how well they perform on other measures (see the full set here). Activities being measured must be conducted for at least 90 days in 2017–2018.
    • Clinicians can also earn a 5% ACI bonus for reporting to two or more public health or clinical data registries, 10% for immunization registry reporting and 10% for reporting on 18 CPIAs that involve use of health IT.
    • Clinicians can lose all ACI points for failing to protect patient privacy. And they must not block data sharing, must share data in good faith with other clinicians, regardless of health system or IT vendor, and must cooperate with HHS health IT field surveillance.

If Your Practice is Considered an APM

Clinicians in an “APM Entity”—a group enrolled in an APM—that meets targets for the percentage of revenue or patients served through the AAPM qualify as Qualified Participants (QP) in Advanced APMs. QPs are exempt from MIPS and automatically get 5% bonuses. APM Entities that meet lower revenue/patient thresholds are Partial QPs and can choose to be in MIPS or out of it. Starting in 2019 for the 2021 payment period, combinations of Medicare and other payer patients can be used to meet thresholds.

To date, CMS has approved five ongoing demonstrations eligible as AAPMs (the Comprehensive Primary Care Plus Initiative, Medicare Share Savings Program Tracks 2 & 3, Next Gen ACOs, the Oncology Care Model, the Comprehensive ESRD Care Model) for 2017/2019, and may add more by January 1.

To qualify as AAPMs, APM entities must share a set portion of savings and losses at the APM Entity level. This “nominal risk” standard for 2017–2018 is 8% of the estimated total Medicare A/B revenue, or 3% of the expected spending for which an APM Entity is responsible. Medicare Advantage revenue does not count toward this threshold.

Clinicians may also propose additional APM models for consideration by a Physician Focused Payment Advisory Committee that will recommend approval to CMS. Proposals must include use of certified electronic record technology (CEHRT), base pay within the APM on MIPS-like measures, and must share both savings and losses, as described above. NCQA PCMH/PCSP standards align closely with those used in existing AAPM demonstrations, such as CPC+. CMS has indicated that new AAPMs will use similar standards. Earning NCQA Recognition will not only help practices perform better in MIPS, it will help them achieve the clinical transformation expected for participation in an APM.

Year 2019 2020 2021 Medicare 2021 All-payer
QP Payments 25% 25% 50% 50% total, 25% Medicare
QP Patients 20% 20% 35% 35% total, 25% Medicare
Partial QP Payments 20% 20% 40% 40% total, 20% Medicare
Partial QP Patients 10% 10% 25% 25% total, 10% Medicare

Next Steps

As you can see, there’s a lot to learn about MACRA. It’s not a cut-and-dried method of transforming payment, and will require a lot of reporting—and reporting begins two months from now.

We hope our summary has given you insight on the right path for your practice. Remember that we’re here as a resource, so stay tuned to this blog for more micro on MACRA!

Ready to Get Started?

Learn more about MACRA and see best practices and case studies to help your organization prepare for the value-based payment environment.

Get Started