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Final Rule Released: MACRA Implementation Set in Stone

On October 14, 2016, the Centers for Medicare & Medicaid Services (CMS) issued the Final Rule regarding the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), stating that its new program is “flexible, highly transparent, and improves over time with input from clinical practices.” Titled: Medicare Program; Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, the 2,204-page document outlines the new Medicare reimbursement model – the Quality Payment Program (QPP). As outlined by MACRA, the QPP offers two paths to reimbursement: by joining an Advanced Alternative Payment Model (APM), or reporting through the Merit-based Incentive Payment System (MIPS). CMS accompanied the release of the Final Rule with a user-friendly, graphic-heavy implementation guide to QPP. Despite the voluminous announcement, the material covers only the first year of the program, with CMS announcing that 2017 is its “Transition Year and Iterative Learning and Development Period” – and revealing that 2018 will be the “second transition year.” “CMS will provide additional information…for 2020 and beyond beginning next year,” noting that it has “beg[un] by laying the groundwork for expansion… through a staged approach.”

While readers are encouraged to review the material from CMS, here is a summary of the announcement, starting with the surprises:

Surprise 1: Adjustment to the Low-Volume Threshold. If you don’t bill at least $30,000 in Medicare Part B allowed charges or you see less than 100 Medicare patients per year, you are exempt from the QPP. This, estimates CMS, knocks out approximately 32.5% of all clinicians billing Medicare Part B services or more than 380,000 clinicians.

Surprise 2: Cost Pillar Dropped. CMS will collect data about costs, but only behind the scenes. This MIPS pillar will not count for the performance year 2017. Its “weight” was transferred to the Quality category.

Surprise 3: Clinical Practice Improvement Activities Lowered. Only four activities need to be reported, and none if you’re already recognized as a medical home.

Surprise 4: A Promise to Expand Definition of Advanced APM. Committed to incorporating more organizations into the Advanced APM path, CMS highlights its new criteria related to inclusion; the “list” of newly considered Advanced APMs, however, has not yet been released.  Based on these refinements, however, CMS estimates that 70,000 to 120,000 clinicians – approximately 5 to 8% of all clinicians billing under the Medicare Part B – will qualify as Advanced APM participants in 2017.

Surprise 5: Advancing Care Information (ACI) Requirements Reduced. ACI – the new name for “meaningful use” – dropped its required criteria from 11 to just five, but reporting on most of them is still necessary if you want to achieve a score of 100%. Another twist? The definition of “hospital-based” has been altered to 75% of covered professional services being performed in a hospital or emergency department. Plus, physicians and other eligible professional practicing in outpatient hospital settings – place of service code 22 – are now considered “hospital-based,” and thus, are exempt from the ACI category. Non-physicians may choose their participation in 2017; should they not wish to submit data, the ACI category will be re-weighted as 0%.

The program begins in 2017, with MIPS reporting required by March 31, 2018. This initial performance year establishes your Medicare payments in 2019, with an adjustment of 4%, up or down. If you fail to submit any 2017 data (and qualify for the program), you will receive a negative 4% payment adjustment. If you transmit a “test” – e.g., one quality measure, one improvement activity, or the required measures in the ACI pillar – you will avoid the penalty; a partial year of reporting earns you a neutral or small positive adjustment. The full year provides for the “moderate” positive payment adjustment. But, wait – there’s an incentive to participate fully during this transition year: qualifying participants who achieve a final score of 70 or higher will be eligible for the exceptional performance adjustment, funded from a pool of $500 million.

MIPS allows reporting by individual or as a group. As noted above, eligible clinicians include only those professionals who bill Medicare more than $30,000 in total Part B allowed charges per annum or provide care for more than 100 Medicare beneficiaries per year. Qualifying professionals are defined as physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists.

The cost category is completely eliminated for the first performance year (2017); therefore, Medicare reimbursement is tied to the remaining three: Quality, Clinical Improvement Activities, and ACI. Those three categories contribute, respectively, 60%, 15% and 25%, to formulating your composite performance score. The score determines your Medicare adjustment in 2019. Here’s a breakdown of the three categories that count in 2017:

Quality: Report six measures out of 271 or one of 30 specialty measure sets, including an outcome measure, for a minimum of any continuous 90-day reporting period. If fewer than six apply, then you’re only required to report on the measure(s) that is applicable.

Improvement Activities: Report four activities out of 93, for a minimum of 90 days. Opportunities include patient coaching, referral management, care plans, care coordination training, group visits, and telehealth. For small and rural practices, those in Healthcare Professional Shortage Areas (HPSAs) and those who are “non-patient-facing” clinicians, only one high or two medium-weighted activities need be reported. Practices recognized as medical homes (or a comparable specialty practice designation) are exempt.

Advancing Care Information: Report the performance of your EHR system as it relates to your operation; a minimum of five required measures include a security risk analysis, e-prescribing, electronic patient access and summary of care record; two options are available, with different measures, depending on the edition of your EHR system.

Participating in an Advanced APM offers an automatic 5% incentive payment for all Medicare patients. The option to join an Advanced APM is very limited – there are less than 100 organizations which qualify today, and, even within those organizations, many physicians won’t reach CMS’ threshold of receiving 25% of Part B payments or seeing 20% of its Medicare patients through the Advanced APM. More importantly, the application period to join the programs in 2017 has passed for all of them. As noted above, however, CMS announced that the “list may change.” Showing its commitment to expand the definition to include more participants, CMS reveals that it “expects about 25 percent of eligible clinicians will be a part of the second path of Advanced Alternative Payment Models” in 2018, to include the yet-to-be-defined Accountable Care Organization Track One model.

2017 is just around the corner; if you have been participating in the government’s incentive programs to date, this new era will likely be an easy transition. For those of you who haven’t, however, prepare to get up to speed – and quickly.

Woodcock & Associates: Changing the Way You Work