MACRA to Hit Small Practices Hard

This week, CMS published the proposed rule for implementation of the Medicare Access and Summary CHIP Reauthorization Act of 2015 (MACRA). MACRA will change the way physicians are reimbursed for Medicare, combining and configuring the Physician Quality Reporting System (PQRS), the Value Modifier Program, and the Medicare Electronic Health Record (EHR) Incentive Program (Meaningful Use).

MACRA will include two paths for physicians to get compensated on under Medicare: the Merit-based Incentive Payment System (MIPS), which affects up to 746,000 eligible physicians by next year, for adjustments in 2019, and Advanced Alternative Payment Models (APMs), which affects a far fewer number of eligible physicians at up to 90,000.

For most physicians, MIPS will be a reality next year. CMS will be measuring their performance in 2017 and adjusting those payments in 2019. The program will judge physicians based on four categories: Cost, replacing the cost component of the Value Modifier Program (10 percent of their total score in year one); quality, replacing PQRS and the quality component of the Value Modifier Program (50 percent of their total score); clinical practice improvement (15 percent of their total score); and advancing care information, replacing Meaningful Use (25 percent of their total score). Based on that total score, physicians will have a payment adjustment (either negative or positive) of up to 4 percent in 2019. 

While the proposed rule is incredibly complex - 962 pages - here are some early takeaways that physicians must acknowledge off the bat. Physicians Practice will continue analysis and coverage of this rule.

1. For smaller practices this is going to hurt their wallet

CMS itself projects, using 2014 data, 87 percent of solo practices will face a negative adjustment in year one of MACRA, equating to a total of $300 million lost. The numbers aren't much better for practices with 2-9 eligible docs. From page 676 in the rule:*

2. This rule applies only to physician practices and to Medicare

For now, only physician offices-not hospitals-are governed by MACRA rules. Acting Administrator of CMS, Andy Slavitt said in a press call that hospitals will be addressed in the coming months. In addition, this program only applies to payments physicians receive from Medicare. Medicaid is not included. This also means for physicians who are eligible for Meaningful Use and other programs under Medicaid, those programs would presumably continue.

3. Meaningful Use is no more in 2017

However, the Advancing Clinical Information category aligns and modifies the 2015 EHR Certification Stages 2 and 3 Meaningful Use measures with focuses on interoperability, patient engagement, etc.. The big difference is the thresholds from those Meaningful Use requirements have been either significantly lowered or eliminated, and reportedly, the "all-or-nothing approach" has been axed. There is half credit for simply attesting. Still, through "Advancing Clinical Information," Meaningful Use lives on.

4. There is a one-year reporting period

There has been a lot of controversy over whether or not Meaningful Use should be reported by physicians through a one-year period or 90-day period. In MIPS, the proposed rule has the reporting period at a full year, which will most definitely be met with contention from advocacy groups.

5. Most physicians will start with MIPS

All physicians - with a few exceptions-will report through MIPS in the first year of the program. That data will then be used by CMS to determine which providers met the requirements for the APM track. Physicians are not locked into their choice - they can switch between MIPS and APM annually.

6. How the four categories are weighed will change

Here's how the scoring of the four categories will change over the years:

7. Quality measures go down

Unlike in PQRS where it was nine quality measures, the MIPS "Quality" part will ask physicians to choose six quality measures to report on from a list of options tailored to specialty and practices. According to CMS, for individual clinicians and small groups (2-9 clinicians), MIPS will calculate two population measures based on claims data, meaning there are no additional reporting requirements for clinicians for population measures.

8. Cost doesn't require reporting

CMS will calculate the cost measures based on claims and availability of sufficient volume. As such, clinicians will not have to do any extra work for this component.

9. APMs offer an alternative, even if it's for a small number of physicians

APMs are payment models such as Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMHs). In 2019 through 2024, physicians participating in APMs would receive a lump sum payment of 5 percent of their prior year Medicare Part B payment.

Most physicians won't be able to participate in this track. There are requirements on how many payments through an APM you receive to be eligible and for the first few years, it can only be Medicare patients and payers. In subsequent years, CMS says it will allow physicians in these models to include non-Medicare payers and patients and the number will increase.

10. Because of the election, this is fluid

As Robert Tenannt, health IT policy director of the Medical Group Management Association, said in an interview with Physicians Practice, 2016 is an election year and often, rules are put on hold in the final months of an outgoing administration. He says new administrations are given a chance to re-release, modify or not release the last administration's rules. In other words, this could all be for naught.

*Physicians Practice sought clarification from CMS to confirm that this is what this chart is indicating.

Chris Mazzolini from our partner publication, Medical Economics, contributed to this reporting