CMS Expands Exemptions and Flexibility in Final MACRA Rule

Guest post Ken Perez, vice president of healthcare policy, Omnicell.

Ken Perez
Ken Perez

On October 14, the Centers for Medicare & Medicaid Services (CMS) released a 2,171-page final rule for the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS had issued a proposed rule on April 27 and in the intervening period, more than 100,000 physicians and other stakeholders attended outreach sessions and CMS received more than 4,000 public comments on the proposed rule, with many of the expressed concerns pertaining to the start date for MACRA’s first performance period.

MACRA’s Quality Payment Program replaces the unpopular sustainable growth rate formula and defines how physicians in physician practices—not hospitals—will be reimbursed by Medicare. It features two alternative, interrelated pathways: the Merit-based Incentive Payment System (MIPS) and advanced alternative payment models (APMs). MIPS is designed for providers in traditional fee-for-service Medicare, while the advanced APMs are for providers who are participating in specific value-based care models, such as accountable care organizations (ACOs).

Small physician practices with less than $30,000 in Medicare charges or that see fewer than 100 Medicare patients per year are exempt from MIPS. According to an analysis by the American Medical Association, 30 percent of physicians are below one or both of these thresholds. In addition, providers new to Medicare in 2017 are also exempt (though just for the first year).

The proposed rule specified Jan. 1, 2017, as the start date for the first performance period under MIPS, which would drive calendar year 2019 payment based on performance in 2017 across the four MIPS categories: Quality, Advancing Care Information, Clinical Practice Improvement Activities, and Cost/Resource Use. The final rule allows providers to start collecting performance data anytime between Jan. 1 and Oct. 2, 2017, with data due to CMS by Mar. 31, 2018.

Under MIPS, physicians can earn in 2019 a payment adjustment that is neutral, up to 4 percent positive, or up to 4 percent negative, depending on their level of participation, the amount of data submitted, and the length of the performance period reported. The adjustment increases to plus or minus 5 percent in 2020, plus or minus 7 percent in 2021, and plus or minus 9 percent in 2022. CMS projects that 592,000 to 642,000 clinicians will submit data for MIPS during the first performance year.

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The ABC of MACRA

Guest post by Abhinav Shashank, CEO and co-founder, Innovaccer.

Abhinav Shashank
Abhinav Shashank

Currently, one of the most discussed topics in the healthcare industry is MACRA; a complex 962-page document that is supposed to redesign the entire healthcare industry. Know all about MACRA in six questions.

What is MACRA?

MACRA stands for Medicare Access and CHIP Reauthorization Act. It’ll repeal the current Sustainable Growth Rate (SGR) Formula and extend CHIP for two more years. Extending CHIP for two more years (in total four years now) will help tens of millions of kids in retaining their insurance.

SGR was introduced in 1997, as a method to curb the Medicare expenditures. Under SGR the physician payments were cut if the overall expenditure was above the benchmark. This payment cut system turned out to be a major reason for significant losses incurred by physicians. Fearing payment cuts, many physicians started denying services to Medicare beneficiaries.

In 2015, “Doc Fix” or MACRA was proposed, which as the name suggests fixed the unprecedented payment cuts. If it weren’t for “Doc Fix,” physicians would have faced 21 percent payment cuts in 2015.

The Notice for Proposed Rulemaking (NPRM) was issued on Apr. 27, 2016, and the final rule will come in November. MACRA’s full implementation will begin from 1st January 2017.

What will MACRA change/replace?

The idea behind implementing MACRA is to create something that works and is enduring. MACRA would bring changes through its unified framework called “Quality Payment Program,” which has been further divided into Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Model (APMs).

All those who will be eligible for MIPS are called Eligible Clinicians. The term has expanded from “Eligible Provider” to “Eligible Clinicians.” It will include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and groups of such clinicians. This expansion has increased the number of people who will receive payments from Medicare. CMS might expand to Medicare part B after two years, which will include therapists, clinical social workers, clinical psychologists.

To keep health information flexible and user-centric, and bring all these changes with better care opportunities, MIPS will evaluate eligible clinicians on four measures namely: Quality Category to replace PQRS; resource use category to replace value-based modifier; Advanced Care Information (ACI) to replace meaningful use; Clinical Practice Improvement Activities (CPIA).

How will the four categories measure the performance?

Quality Category: Instead of reporting on nine measures, Clinicians will have the choice to pick speciality-specific measures. They can choose six measures to report to CMS that suits them the best reflecting their practice. But one of these measures must be an outcome measure or a high-priority measure and one must be a cross-cutting measure. Clinicians can also choose to report a specialty measure. Clinicians can report through Claims, Electronic Health Record (EHR), Clinical Registry, Qualified, Clinical Data Registry (QCDR) or Group practice reporting web portal.

For the year one, quality category will have 50 percent weight in the performance scoring procedure.

Resource Use: Clinicians are not required to report for this, CMS will calculate these measures based on claims and “availability of sufficient volume.” To account for the differences among specialties, CMS has proposed to add 41 episode-based measures. These episode groups have potential to provide more actionable insights on measure resource use than the various cost measures.

For the year one, resource use category will have 10 percent weight in the performance scoring procedure.

Advancing Care Information: Clinicians can report on the measures that suit their practices the best and reflect how the EHR technology is being used for daily needs, with particular emphasis on the interoperability and information exchange. The performance score does not use threshold and allows physicians to receive partial credits on measures.

For the year one, advancing care information category will have 25 percent weight in the performance scoring procedure.

Clinical Practice Improvement Activities: In this category, clinicians would be rewarded for activities that improves overall care delivery such as care coordination, beneficiary engagement, and patient safety. Clinicians can choose practices’ goal from a list of 90 plus activities. This category does not require a full year reporting. CPIA activities need to be performed for at least 90 days during the performance period.

For the year one, CPIA Category will have 15 percent weight in the performance scoring procedure.

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The Unlikelihood of Permanent SGR Reform During the Lame-Duck Session

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

“Hope springs eternal” is a phrase from Alexander Pope’s An Essay on Man: Epistle I, written in 1733. For some reason, right now hope is in full bloom in Washington, D.C. for physician groups, such as the American Medical Association and the Medical Group Management Association, which are pushing for passage of a permanent repeal of the sustainable growth rate (SGR), also known as a “doc fix,” prior to the congressional recess that will start in mid-December.

The points that are being made by physician groups are not new. There is the spectre of a 21.2 percent reduction in Medicare physician fees effective April 1, 2015, when the current doc fix expires, and nobody wants such a drastic reimbursement rate cut to occur. Also, because of moderating healthcare costs, the most recent Congressional Budget Office estimate of the cost of holding payment rates through 2024 at current levels is “only” $131 billion, near the low end of the CBO’s historical range. And last, earlier this year, a number of permanent SGR reform bills enjoyed bipartisan and bicameral support.

In spite of all these valid points, the case for fixing the SGR this calendar year, as opposed the first quarter of 2015, does not seem compelling or possible, due to both political and fiscal realities.

Politically, as the name implies, lame-duck congressional sessions are not known for legislative productivity. Chip Kahn, CEO of the Federation of American Hospitals, commented, “I believe that the lame-duck session is going to be limited to measures that are either emergencies like Ebola or must do’s to keep the government open.” Similarly, Tom Scully, former CMS administrator under President George W. Bush, opined in Modern Healthcare that there is “1 in 10 million” chance of a permanent SGR repeal passing during the lame-duck session.

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The History of the Sustainable Growth Rate, and How Its Repeal and ACOs are Linked

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Section 4503 of the Balanced Budget Act of 1997, enacted on Aug. 5, 1997, replaced the Medicare Volume Performance Standard (MVPS) with the sustainable growth rate (SGR) provision, a formulaic approach intended to restrain the growth of Medicare spending on physician services. The SGR formula incorporates medical inflation, the projected growth of per capita gross domestic product (GDP), projected growth in the number of Medicare beneficiaries, and changes in law or regulation.

The SGR requires Medicare each year to set a total budget for spending on physician services for the following year. If actual spending exceeds that budget, the Medicare conversion factor that is applied to more than 7,400 unique covered physician and therapy services in subsequent years is to be reduced so that over time, cumulative actual spending will not exceed cumulative budgeted (targeted) spending, with April 1, 1996, as the starting point for both.

In part because of the effective lobbying efforts of physicians, Congress has temporarily suspended application of the SGR by passing legislative overrides or “doc fixes” 17 times from 2003 to 2014. (It utilized five different pieces of legislation in 2010 alone to avoid cuts exceeding 20 percent.) As a result, actual spending has exceeded budget every year during these years. Because the annual fee update must be adjusted not only for the prior year’s variance between budgeted and actual spending but also for the cumulative variance since 1996, the next proposed update, effective April 1, 2015, is a reduction in Medicare physician fees of 20.9 percent.

Those hoping for a permanent repeal of the SGR—which is pretty much everybody, given the almost universal disdain for it—entered 2014 with a sense of optimism that this would be the year. These hopes were fueled by bipartisan and bicameral support of SGR reform proposals that emerged at the end of 2013 and significantly lower estimates by the Congressional Budget Office (CBO) of the cost of a long-term doc fix.

Ultimately, the inability to figure out how to pay for the SGR repeal blocked the passage of the permanent reform bills, and Congress settled for yet another short-term patch. On March 27, 2014, the House of Representatives, under a suspension of normal rules, approved via a voice vote H.R. 4302, the Protecting Access to Medicare Act of 2014. The bill provides a patch to the SGR that would avoid a 24.4 percent reduction to Medicare’s Physician Fee Schedule (PFS), effective April 1, 2014, replacing the scheduled reduction with a 0.5 percent increase to the PFS through Dec. 31, 2014, and a 0 percent increase for Jan. 1, 2015, through March 31, 2015. Four days later, the Senate approved H.R. 4302 on a bipartisan 64-35 vote, and President Barack Obama signed the bill into law.

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Sustainable Growth Rate Reform: Close, But No Cigar

Ken Perez
Ken Perez

Guest post Ken Perez, vice president of healthcare policy, Omnicell.

“Politics is the art of the possible.” -Otto von Bismarck

This was supposed to be the year for permanent repeal of the sustainable growth rate (SGR), a formulaic approach intended to restrain the growth of Medicare spending on physician services. There was the rare cosmic convergence of bipartisan and bicameral support for SGR reform proposals at the end of 2013, and cost estimates by the Congressional Budget Office of a long-term “doc fix” reached new lows earlier this year.

But those hopes were dashed, as permanent SGR reform bills from both sides of the aisle died in the Senate. Instead, Congress agreed upon yet another short-term SGR patch. On March 27, 2014, the House, under a suspension of normal rules, approved via a voice vote a one-year patch to the SGR that would avoid a 24.4 percent reduction to Medicare’s Physician Fee Schedule (PFS) slated to take effect April 1, 2014 (replacing it with a 0.5 percent increase to the PFS for 12 months). Then on March 31, the Senate approved the patch via a roll-call vote, and President Barack Obama signed the bill into law that same day.

Why did the efforts to pass a permanent doc fix fail? The aforementioned bipartisan and bicameral support of SGR reform proposals was limited to “policy,” i.e., the future system by which physicians will be reimbursed by Medicare. Congressional Democrats and Republicans did not see eye to eye on the so-called “pay-fors” that would offset the increased government spending that would result with repeal of the SGR and allow the reform legislation to be deficit-neutral.

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The Unlikelihood of Sustainable Growth Rate Reform this Year

Ken Perez
Ken Perez

In mid-September, the Congressional Budget Office (CBO) estimated that the cost of H.R. 2810, a permanent Sustainable Growth Rate (SGR) repeal or “doc fix,” would be $175.5 billion from 2014 through 2023, up from the CBO’s estimates of $139.1 billion in May and $138 billion in February for freezing (i.e., holding flat) all Medicare physician rates for 10 years.

H.R. 2810 would be more costly, as it does not freeze rates, it raises them slightly. As with all other SGR reform bills, its implementation would avoid an estimated 24.4 percent reduction to Medicare physician payment rates that is scheduled to take effect Jan. 1, 2014, but the bill would also increase payment rates by 0.5 percent per year during 2014-2018. That change would increase federal spending by $63.5 billion through 2018, relative to the spending projection under the SGR.

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The Weak Underbelly of Sustainable Growth Rate Reform Proposals

Perez

Guest post by Ken Perez, Director of Healthcare Policy and Senior Vice President of Marketing, MedeAnalytics, Inc.

What do all of these pieces of legislation or plans have in common?

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