Sagacious Consultants Blog Spotlight on MACRA: Overview and Initial Planning Essentials

by: Andrew Hecker and Ryan Scott In case you missed it, MACRA stands for Medicare Access and CHIP [Children's Health Insurance Program] Reauthorization Act; it has set the stage for the significant Medicare payment reform. MACRA will create two models that directly links provider's payments to the quality and effectiveness of the care provided, and replaces the sustainable growth rate formula: The Merit-Based Incentive Payment System (MIPS), which streamlines multiple existing quality programs, and Advanced Alternative Payment Models (APMs), which provides incentive payments. Providers will participate in one of these two incentive payment models, either MIPS or APM. According to CMS, most Physicians will fall into MIPS. MIPS - Merit Based Incentive Payment SystemBy 2020, CMS estimates that most eligible professionals participating in the Medicare Fee-for-Service payment program will be part of the MIPS track. Eligibility Overview: MIPS Eligible Physicians: o Medicare Part B Physicians (after 1st year). o For years 1-2, Part B EPs plus Physician Assistants, Nurse Practitioners, Nurse Anesthetists, and Clinical Nurse Specialists o For years 3+ includes the above plus Physical or Occupational Therapists, Speech and Language Pathologists, Audiologists, Nurse midwives, Clinical social workers, Clinical psychologists, and Dietitians. MIPS Exclusions o Providers who see fewer than 100 Medicare patients or have billing charges less than or equal to $10,000 o Clinicians in their first year of Medicare part B participation o Certain qualifying advanced APM participants. This program combines several existing CMS programs (including Meaningful Use, Physician Quality Reporting System, and Value based payment modifier) with the new clinical practice improvement activities using a Composite Performance Score (CPS). A CPS is the result of scoring and weighting the program's four key components: Quality (Formally PQRS), Resource Use (Value-based payment modifier), Clinical Practice Improvement Activities, and Advancing Care Information (Meaningful use). The CPS will be used to calculate payment adjustments for participating providers, with the potential for profound impacts on revenue for providers and the organizations they practice at. Starting in 2019, providers could be subject to incentive or payment adjustments of up to +/- 4% to their base rate of Medicare Part B payments. That value will incrementally increase to +/- 5% in 2020, +/- 7% in 2021, and finally +/- 9% in 2022. Additionally exceptional performers will be eligible for an additional positive adjustment factor - with up to $500M available each year for distribution from 2019 to 2024! APMs - Advanced Alternative Payment Models Advanced Alternative Payment Models (APM) provide a separate option, and while they provide an alternative to the MIPS program, they carry increased financial risk and quality reporting requirement burdens. CMS has stated that they will institute tight controls governing who will be considered Qualifying APM Participants ("QPs"). Eligibility Overview: Eligibility will be determined by both organizational certification as an advanced APM, as well as individual providers meeting the requirements to be designated as a qualified APM participant. APM Eligibility: CMS will specify a list of organizations that they have determined as being eligible for designation as an APM. Such organizations will have to meet the following requirements to be considered an advanced APM: o CMS Requirements: - Require use of certified EHR technology - Provide payment based on quality measures comparable to those used in the MIPS quality category - Bear financial risk for more than a nominal amount of monetary loss, or be a medical home model expanded under CMMI authority QP Eligibility: Eligibility for providers participating in an eligible APM will be determined based on their ability to meet thresholds for the percentage of patients or payments received through an eligible APM. Threshold Requirements Those who do successfully fully participate will receive a 5% lump sum bonus on MPFS (Medicare Physician Fee Schedule) payments for years 2019-2024 and then a higher fee schedule update from 2026 onwards. Those providers who qualify for partial participation will have the option to opt out of MIPS or receive a favorable weighted adjustment to their CPS. What should organizations do right now to prepare for MACRA and assess their risks? It is critical that healthcare leadership start planning strategically for MACRA, and how this legislation will impact their organization. A key component of this planning should be mapping out what MACRA means in terms of estimated costs (risk) and benefits (incentives). Acknowledging that most providers will be subject to MIPS, a good starting point would be to forecast how that program would impact Medicare payments based on historical baselines. The elements that should be used as variables in this forecast are the potential payment adjustments, both positive and negative, that you could face. You can increase the complexity and accuracy of this assessment by also analyzing your current performance across the four categories included in the CPS. You can also identify your risk profile and an estimated score to serve as a baseline for improvement. Additionally, those organizations who want to prepare themselves for potential inclusion as an Advanced APM can take a first step by analyzing potential qualifying participating providers to validate if they can support the minimal thresholds necessary for participation in 2019. This process should be repeated looking at the progressively more stringent requirements that will follow through 2023 to forecast what transformational steps will need to be taken to maintain eligibility. Another important factor that leadership should take into account is that providers who practice at an Advanced APM but do not meet threshold requirements will also be provided with unique incentives. Such providers will be able to choose either an exception from MIPS, or an increased favorable weighting to their MIP CPS. Both options provide a unique set of benefits that should be carefully assessed, documented, and integrated into projections and plans to maximize the organization's incentives. Acknowledging that MACRA will have a direct impact on provider reimbursement, it is essential that organizations also factor performance into provider's compensation structure. With quality and effectiveness of care being a primary driver of future financial performance, compensation will need to be aligned with this factor. The benefit of this alignment will be twofold: it will provide an incentive structure to reward providers whose performance aligns with positive outcomes while also distributing risk between the individual and the institution.