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Focus on Healthcare: MACRA – A Move to a Value-Based System of Care

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In 2015 the Medicare Access and CHIP Reauthorization Act (MACRA) was passed which was a bipartisan agreement to move towards a value-based system of care. Prior to MACRA, physicians providing care to Medicare patients were subject to a reimbursement formula known as the Sustainable Growth Rate (SGR). The SGR was established to help control the rate of increases in physician spending and compared total spending among all Medicare-participating physicians to an overall budgeted target.
July 25, 2016

In 2015 the Medicare Access and CHIP Reauthorization Act (MACRA) was passed which was a bipartisan agreement to move towards a value-based system of care. Prior to MACRA, physicians providing care to Medicare patients were subject to a reimbursement formula known as the Sustainable Growth Rate (SGR). The SGR was established to help control the rate of increases in physician spending and compared total spending among all Medicare-participating physicians to an overall budgeted target.

Under this system, a rate reduction was supposed to occur if the total spending exceeded the budgeted target, however lawmakers have elected to defer the rate cuts temporarily. Under the SGR system, individual physicians did not benefit by their good stewardship and level of care. The MACRA Act would create a new approach to paying clinicians for the value and quality of care that they provide. At the time of the Act’s passage nearly a year ago, it was unknown how it would be implemented or the exact details of how it would work.

On April 27, 2016, the Department of Health and Human Services issued a Notice of Proposed Rulemaking to implement its key provisions. The proposed rule would implement the changes through a framework referred to as the “Quality Payment Program” which includes two paths; the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Models (APM’s).

The Merit-based Incentive Payment System

This new system has streamlined the previous measures used including the Physician Quality Reporting System, the Value Modifier Program, and the Medicare Electronic Health Record Incentive Program into a single merit-based, as the name implies, system. MIPS allows Medicaid clinicians to be paid for providing high quality, efficient care through success in four weighted performance areas:

  • Cost (10%)
  • Quality (50%)
  • Clinical Practice Improvement Activities (15%)
  • Advancing Care Information (25%)

The weighted performance percentages are set for the first year but may change in future years. It is also important to note that the law requires MIPS to be budget neutral and clinicians will receive a positive, negative or neutral adjustment to their Medicare payments based on their overall score. As specified under the statute, positive and negative adjustments will increase over time. The maximum negative adjustment is 4% for 2019 and increases each successive year to 9% in 2022.

Advanced Alternative Payment Models (APMs)

APMs are new approaches to paying for care through Medicare that incentivize quality and value while clinicians accept risk for providing such care. Under MACRA, if a physician participates in APMs, they will be exempt from MIPS and will receive a lump sum payment from Medicare in the amount equal to 5% of last year’s fee for service payments as an incentive. In order to qualify under the MACRA statute, clinicians must use Certified EHR Technology, report quality measures similar to those under MIPS and bear financial risk in excess of a nominal amount. In order to determine whether clinicians met the requirements for the Advanced APM track, all clinicians will report through MIPS in the first year.

The Center for Medicare & Medicaid Services (CMS) would begin measuring performance for doctors and other physicians through MIPS in January 2017, with payments based on those measures beginning in 2019.

However, in a recent July 2016 U.S. Senate Committee on Finance hearing on the MACRA Act, the CMS Acting Administrator Andy Slavitt left open the possibility that the new changes set to overhaul physician payments could be pushed back from the intended start date of January 2017. There is great concern around the current timeline and physician groups are requesting pushing back the start date for at least six months to ensure that physicians can get help and experience before the start of the program. Just recently, the Department of Health and Human Services announced new funding of approximately $20 million each year over the next five years to support training and education for clinicians in individual or small group practices.


For more information please see the Quality Payment Program Fact Sheet.

 

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