Finding the best MACRA rout to provider reimbursement

February 8, 2016

Medicare covers approximately 60 million Americans and an additional 10,000 Americans become eligible for Medicare every day. 

Richard Self, MS IVThe program has been traditionally a fee-for-service (FFS) payment system, which was based on the volume of patients seen. This has resulted in increased costs, with little improvement in the quality of care1 The Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law by President Barack Obama on April 16, 20152.

 

Related: The end is in sight for Meaningful Use

 

 Originally sponsored by Rep. Michael C. Burgess [R-TX], this new legislation is, among other things, designed to restructure how reimbursement rates are calculated for individual physicians in the Medicare Physician Fee Schedule (PFS).

MACRA permanently repeals the flawed Sustainable Growth Rate (SGR) formula for determining Medicare payments for clinicians services, and establishes a new framework for rewarding physicians based on value rather than volume1.

Janis Coffin, DO, FAAFP, FACMPE

By comparing physician compliance against national averages with mandated regulations across many specifically defined quality metrics and measures, CMS hopes to reduce what it considers costly medical redundancies and improve overall patient health and safety.

 

Further reading: MACRA reforms are coming, but devil is in the details

 

According to the legislation, all eligible providers “including physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists… shall receive annual payment increases or decreases based on their performance as measured by standards the Secretary [of Health and Human Services] shall establish according to specified criteria” from 2019 onward2.

Next: SGR modifier and passage of MACRA

 

The Sustainable Growth Rate (SGR) Modifier & passage of MACRA

MIPS EP

QP

Partial QP*

Baseline

Performance

Baseline

Incentive**

Baseline

Performance

0.5%

0%

0.5%

0%

0.5%

0.0%

0.5%

±4%

0.5%

5%

0.5%

0.0%

0%

±5%

0.0%

5%

0.0%

0.0%

0%

±7%

0.0%

5%

0.0%

0.0%

0%

±9%

0.0%

5%

0.0%

0.0%

0%

±9%

0.75%

0%

0.25%

0.0%

0%

±9%

0.75%

0%

0.25%

0.0%

 

 

Due to ongoing concern over potentially economically disastrous, legislatively-mandated Medicare reimbursement rate cuts, MACRA creates the Merit-Based Incentive Payment System (MIPS). MIPS is designed to replace the Sustainable Growth Rate (SGR) model, which was a system implemented by the Balanced Budget Act of 1997 to reduce Medicare spending through ubiquitous reimbursement cuts based on the proportion of prior years’ claims from providers and organizations versus the allotted budget for the year, all set against the Gross Domestic Product growth rate.

This system proved highly unpopular among providers and organizations3 and produced projections in the last seven years of its existence that could have decreased the reimbursement rate for all providers anywhere from 10% to more than 25% of the prior year’s reimbursement rate in the PFS, regardless of performance4.

During the later years of the use of the SGR Congress enacted multiple stop-gap measures, often referred to as ‘doc fixes,’ to avoid the significant impact these cuts would have on practices and organizations. (Table 1)

These short-term measures, however, failed to address the long term discordance between CMS budget allocation and what was considered by many parties to be acceptable reimbursement rates in the PFS. Because the SGR was recalculated each year as though the prior legislative pieces were never enacted, an often-times progressively negative adjustment rate was calculated year after year until reaching a nadir in 2012.

 

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Despite improvements in recent years, 2015 saw a predicted 15.9% decrease in the PFS. Hence, MACRA’s removal of the SGR, adoption of a 0.5% fixed growth rate for four years, and creation of MIPS has been greeted with overwhelming bipartisan support in Congress7,8 as a meaningful step towards Medicare sustainability that doesn’t traumatize the overall healthcare industry with excessive cuts in the interim.

Next: Understanding MIPS, APMs

 

MIPS, APMs, & varying reimbursement adjustment rates

MACRA establishes three discrete and mutually exclusive reimbursement groups from 2019 onward with modifiers and long-term growth rates for each group  based either on the traditional FFS model with MIPS criteria or Alternative Payment Model (APM) with MIPS equivalents and other value-based metrics.

 

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MIPS, at a bare minimum, alters the traditional FFS model by adjusting the individual provider’s fee schedule in accordance with performance on quality indicators submitted at the end of each year’s reporting period. Adjustments can be either positive, neutral, or negative based on meeting these criteria, as highlighted in Table 2.

For a provider to be classified in the first group as a MIPS Eligible Provider (EP), he or she must bill predominantly via FFS and not meet criteria for being either a Fully Qualifying APM Provider (QP) or a Partial Qualifying APM Provider (Partial QP).

QP

Partial QP

Medicare Only

All-Payer/Medicare

Medicare Only

All-Payer/Medicare

25%

*

20%

*

50%

50%/25%

40%

40%/20%

75%

75%/25%

50%

50%/20%

 

 

 

The second group, the QP group, will consist of practices that have adopted a reimbursement model based on a diverse set of value-based initiatives, with services billed predominantly through an approved APM entity, such as a patient-centered medical home (PCMH). These initiatives encompass: 

1.) Guidelines equivalent to MIPS criteria, 

2.) Use of certified electronic health record (EHR) technology,

 3.) Having a provider or entity bear a significant financial risk of actual expenses being greater than projected for transitioning to an APM or a PCMH model as defined by the Centers for Medicare & Medicaid Innovation, and

4.) Having a certain percentage of either Medicare-specific or All-Payer/Medicare reimbursements for services be derived from APM specific criteria. (Table 3)

The third group consists of the Partial QPs who would otherwise meet full criteria for being a QP, but do not meet the necessary specific APM reimbursement percentage threshold for billing based on provided value-based services.

Next: Future of MACRA

 

The percent of APM based service billing criteria listed is slightly lowered for the definition of a provider as a Partial QP and is contrasted with QP definitions in Table 2. The nominal incentive for a QP is a flat 5% increase in reimbursement rates per fully compliant year from 2019 through 2024, whereas partial QPs can still be evaluated for yearly reimbursement evaluation by APM standards, but not provided the incentive 5% baseline increase9.

Regardless of a provider’s reimbursement model, either meeting the national average for MIPS criteria or close APM equivalents will be the minimal standard to receive non-negative performance-based reimbursement growth rate adjustments after 2019.

 

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This policy reinforces CMS’s overarching goal of moving providers away from an FFS-baed system. Because the specific nature of APMs is beyond the scope of this article, we direct any unfamiliar readers interested to a very well written introductory explanation provided by the American Medical Association10.

The future of MACRA

Although significant support for a legislative change in the medical community has been observed, concerns have been voiced over an April, 2015 CMS Actuary Report forecasting that by 2048, physician reimbursement schedules will be worse under MACRA than they would have been by maintaining the SGR adjustments11. This is compounded by forecasts of progressive widening of the disparity in the difference afterwards.

Alongside the expiration of the 5% incentive for QPs in 2025, this would seem to jeopardize the program’s ability to appeal to providers to continue with their historical cooperation with more advanced CMS objectives and may ultimately lead to fundamental issues with patient access to Medicare participating providers by the middle of the century.

Despite this prediction, many are remaining hopeful that MACRA will represent an end to the year-to-year quick ‘doc fixes’ that have dominated the news over the last decade.

 

Janis Coffin, DO, FAAFP, FACMPE is an associate professor, department of family medicine, at the Medical College of Georgia, as well as the medical director of the Family Medicine Clinic.

Richard “Hayden” Self IV, MD is a current senior medical student enrolled in the joint MD/MBA program at Augusta University in Augusta, GA.

 

References:

1.) http://healthaffairs.org/blog/2015/09/28/macra-new-opportunities-for-medicare-providers-through-innovative-payment-systems-3/  Accessed December 15, 2015.

2.) https://www.congress.gov/bill/114th-congress/house-bill/2?q=%7B%22search%22%3A%5B%22medicare+chip%22%5D%7D&resultIndex=3 Accessed December 12, 2015.

3.) http://blogs.aafp.org/cfr/leadervoices/entry/take_a_bow_physicians_you Accessed December 12, 2015.

4.) https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/ Accessed December 12, 2015.

5.) https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/Downloads/SGR2015f.pdf Accessed December 12, 2015.

6.) https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SustainableGRatesConFact/Downloads/sgr2009f.pdf Accessed December 12, 2015.

7.) http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=114&session=1&vote=00144 Accessed December 12, 2015.

8.) https://www.govtrack.us/congress/votes/114-2015/h144 Accessed December 12, 2015.

9.) http://www.regulations.gov/#!documentDetail;D=CMS-2015-0110-0001 Accessed December 12, 2015.

10.) https://download.ama-assn.org/resources/doc/washington/alternative-payment-models-physician-guide.pdf Accessed December 12, 2015.

11.) https://www.cms.gov/research-statistics-data-and-systems/research/actuarialstudies/downloads/2015hr2a.pdf