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Will your system be ready for EHRs and Medicare reform?


Federal reimbursement changes are coming, so physicians need to ensure that data collection tools are up to the task.

Physicians are facing the biggest change in how Medicare pays them since the introduction of the resource-based relative value scale in 1992. But despite the considerable financial impact this change will have on many practices, only half of non-pediatric doctors are aware of the Medicare Access and CHIP Reauthorization Act (MACRA), according to consulting firm Deloitte. Even those who are aware of the new reimbursement model don’t know quite how to react.

“We know that change is coming, and we’re trying to prepare the best we can,” says internist Kenneth Kubitschek, part of a 14-provider practice in Asheville, North Carolina and a Medical Economics editorial advisory board member.  “But I think it’s going to be very confusing and frustrating for a lot of people, because the rules are so confusing.”

Nevertheless, there are steps practices can take now to prepare for MACRA so as to position themselves to succeed financially in this perplexing new Medicare environment. 


Coming: financial bonuses and penalties

Under rules the Centers for Medicare & Medicaid Services (CMS) proposed last spring, the agency would begin measuring the quality and cost performance of doctors on January 1, 2017 to determine the bonuses or pay cuts that they will receive from Medicare starting January 1, 2019, when MACRA takes effect. MACRA will replace the straight fee-for-service method of paying most physicians with a value-based reimbursement approach. CMS was expected to issue a final rule on the program by November 1.

In early September, CMS announced that physicians could decide whether they wanted to start their first performance year on January 1, 2017. If they submit some performance data from after January 1 to CMS, they will avoid a negative payment adjustment in 2019. 

A second option is to submit all of the data the program requires, but for just part of 2017. That could qualify doctors for a small positive payment in 2019 if they score well. The other options include full calendar year reporting and participation in an “alternative payment model” such as an accountable care organization (ACO) that takes financial risk. Regardless of which option a physician chooses, his or her Medicare reimbursement will not be reduced in 2019.


Related: With hacking on the rise, physician records at risk


This will not be true in the long run, however. Because the law requires that the payment changes must be revenue-neutral to Medicare, CMS has forecast that nearly half of practices-mainly those with fewer than 25 doctors-will see their Medicare reimbursements cut as a result of

While Kubitschek approves of CMS’ long-term goals in measuring physician performance, he adds, “It’s turned medicine into a competitive environment, where we’re being judged against each other. There will be winners and losers.”



MACRA establishes a “quality payment program” with two tracks: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).

Next: Will your EHR be ready?


MIPS replaces three current CMS programs: the Physician Quality Reporting System (PQRS), the EHR incentive program (aka Meaningful Use), and the Value-based Modifier Program. Under MIPS, physicians will be measured on quality, resource use, meaningful use of certified EHR technology and clinical practice improvement activities, a new category. Depending on their 2017 performance, most doctors will see up to a 4% increase or decrease in their Medicare payment rates in 2019. By 2022, that differential will increase to 9% plus or minus.

For determining 2019 payments, the components of MIPS are weighted as follows: quality, 50%; meaningful use (now called “Advancing Care Information”), 25%; clinical practice improvement activities, 15%; and cost, 10%. In future years these weights will change, with cost taking a higher percentage and quality a lower one.  

APMs will consist of certain kinds of accountable care organizations (ACOs) and patient-centered medical homes (PCMHs). Essentially, the ACOs must take downside financial risk, meaning they must be in track 2 or 3 of the Medicare Shared Savings Program (MSSP) or in CMS’ Next Generation ACO program. Only about 5% of ACOs fall into that category.

For a PCMH to qualify as an alternative payment model, it must participate in Medicare’s new multi-payer Comprehensive Primary Care Plus program, which will cover only some regions of the country. 

In addition, a practice taking part in a qualified APM must derive a certain percentage of its fee-for-service Medicare revenue from that source. If the practice meets these criteria, it can receive a 5% annual bonus for five years.


Further reading: It's time for EHRs to solve problems for doctors rather than cause them


Applying for the APM track entails a risk for most practices, because CMS won’t determine whether the practice qualifies for that track until after the first performance year is over, notes David Wofford, senior manager of ECG Management Consultants. Thus a practice could do everything it’s supposed to do to qualify for the APM track, only to learn that it should have reported  under MIPS instead.

Will your EHR be ready?

Most practices that participate in CMS’ EHR Incentive Program use 2014 edition EHRs that were programmed for Meaningful Use Stage 2. CMS will allow them to continue using those EHRs in the 2017 performance year, but they will have to upgrade or switch to 2015 edition EHRs by 2018.

(The problem in using the 2014 edition EHRs in 2017 is that those products must be tweaked to turn out the data for MIPS’ quality measures, and those measures won’t be revealed until CMS releases its final rule.)

Before CMS changed its timeline, it looked like EHR vendors would have to reprogram their software in the brief time period between the issuance of the final rule and January 1. But now vendors have more time to do that, because practices do not have to start reporting their data at the start of the calendar year. Instead, they can begin  whenever their EHRs are ready.

Nevertheless, experts urge practices to contact their vendors immediately to find out when they expect to upgrade their products for MIPS. Groups that use cloud-based EHRs will have a slight advantage because their systems can be upgraded as soon as the software has been rewritten and tested.

So as you start to gauge your EHR vendor’s readiness for MACRA, it’s also a good time to make sure your data is in order for the four MIPS categories.

Next: Reporting ‘quality’



01/ Reporting ‘quality’

Whether a practice goes into the MIPS or APM track, it will have to report on quality measures drawn from a large set of metrics. While these won’t be known until CMS issues its final rule, Erin Mastagni, a manager with ECG Management Consultants, says initial indications are they will include many of the current PQRS measures.


Related: The challenges of switching EHRs


The number of quality measures that practices must report on will drop to six in MIPS from nine in PQRS. However, the number of patients on whom practices will have to report will rise from 50% to 80% for groups that use special claim codes to report on quality, and from 50% to 90% for practices that use other reporting methods, notes Anders Gilberg, senior vice president of the Medical Group Management Association (MGMA).

Moreover, although the claims-based practices will still report only on Medicare patients, as in PQRS, other groups will have to report on all of their patients up to the required threshold. 

Gilberg doesn’t believe that CMS will phase out claims-based reporting of quality data, because that’s still the prevalent method used by practices. Although this approach is inefficient and not very accurate, it does not require doctors to upgrade their EHRs to collect and transmit data on the new quality measures. So Gilberg thinks many practices will continue using claims-based reporting.

The other quality reporting methods for both individual physicians and groups are direct EHR reporting, qualified registry, and qualified clinical data registry (QCDR). Groups of 25 or more eligible clinicians can also use the group reporting option (GPRO) web interface to submit data. 

Kubitschek says his practice submits data to PQRS using a commercial registry that charges $350 per provider per year. Preparing the data for the registry takes up much of a full-time employee’s work hours, he notes. This staffer must ensure that the data is accurate, which is problematic for two reasons: the EHR doesn’t necessarily calculate the numerators and the denominators correctly, and providers don’t always enter the data in the proper fields. 

However physicians submit quality data to PQRS, CMS sends back a Quality and Resource Use Report (QRUR) comparing their performance against national benchmarks. CMS proposes to continue doing this under MIPS. The first feedback report, based on historical data, would be due on July 1, 2017. Presumably, the QRUR based on 2017 data would arrive a year later.

Meanwhile, practices can use their current QRURs to prepare for MACRA, says David Zetter, CHBC, a practice management consultant in Mechanicsburg, Pennsylvania. Doctors can analyze the reports to see how they look compared to their peers and use that data to improve.

But Mastagni points out that the QRURs arrive several months after the end of the reporting year, which doesn’t help physicians improve during their performance period. Also, she notes, the reports “are pretty generic, and if you’re reporting as a group, you can’t really identify who in that group is high performing or low-performing and use the data to intervene.”

This is where QCDRs can be helpful, Mastagni says. Not only can a practice use them to add quality measures and payers beyond what CMS requires, it can also help the group “collect that data on a more strategic basis to measure its performance.” In other words, physicians can look up QCDR reports comparing their performance or their group’s performance to benchmarks whenever they want.

Gilberg thinks this feedback and decision support mechanism could help improve quality. “Engaging with the QCDR meets the purpose of providing a real clinical improvement element at the point of care,” he argues.


02/ ACI: Son of meaningful use

CMS proposes methods of reporting Advancing Care Information (ACI) data that are the same as for quality reporting, except without a claims-based option, and eligible clinicians can still attest to their data.

Next: Clinical practice improvement activities


If a physician or a group reports on measures related to half a dozen core objectives, they will automatically get 50% of the maximum score in this category. The rest of the credit they receive will be based on their performance on the ACI measures.

According to the proposed rule, there will be two sets of ACI metrics, one correlated with Meaningful Use Stage 2, the other correlated with Stage 3. The first measure set is designed for use with 2014-edition certified EHRs. The second set will be used with 2015-edition certified EHRs when they become more widely available. 


Further reading: EHR interoperability's uncertain future


One drawback of meaningful use that will be carried over to ACI, notes Mastagni, is that the measures remain primary care-centric. For example, the e-prescribing requirement is the same for all eligible clinicians, even though some physicians prescribe much less than others. 

“Primary care physicians will still be at the greatest advantage in doing these activities as part of meaningfully using an EHR,” she says.

03/ Clinical practice improvement activities

The same group of reporting methods will be used with clinical practice improvement activities. But the challenge for physicians is not reporting but implementation, says Gilberg. Whether a practice decides to expand its office hours, offer same-day appointments, report test results on a timelier basis, or integrate behavioral healthcare, “it won’t be cheap” to put these changes in place, he notes.

Much of the practice improvement activities that CMS encourages are the same kinds of steps that patient-centered medical homes must take to gain recognition from the National Committee for Quality Assurance (NCQA). Unsurprisingly, an NCQA- recognized PCMH automatically gets 100% credit in this category.


04/ Resource use

CMS will measure the use of healthcare resources using Medicare claims data, so this is the one category that won’t impose a reporting burden on practices. However, CMS will have to overcome challenges in risk adjusting the data and properly allocating resource use among multiple physicians caring for the same patient.

In commenting on the MACRA proposal, MGMA recommended that CMS not include resource use in its overall performance score until new risk adjustment methods are available. Kubitschek, who does a lot of work in nursing homes, is concerned that poor risk adjustment will harm his score on resource use. 

“If you care for nursing home patients, you can’t win this because they aren’t taking your practice setting into consideration,” he says. “You’ll always be in the 99th percentile.”

Kubitschek thinks that this provision will encourage primary care doctors to refer to more efficient specialists. It is also possible, he adds, that some primary care physicians will be reluctant to take referrals of sick patients from hospitals for fear of lowering their utilization scores.

Mastagni points out that it has been difficult to attribute resource use to multiple providers in the value-based modifier program, and she foresees the same will happen in MIPS. 

“It is a pain point that many providers complain about today,” she says. 

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