The initial reaction from healthcare stakeholders to the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Final Rule was one of cautious optimism. Indeed, industry leaders seem pleased with how federal officials have responded to their concerns, but also realize that future years of the Quality Payment program could prove challenging for eligible Medicare physicians.
Following the release of the 2,398-page rule on Oct. 14, Healthcare Informatics took a first look at some of the key changes between the proposed and final rule and the rationales that the Centers for Medicare & Medicaid Services (CMS) offered for its decisions. Many of these adjustments were responses to stakeholder feedback, as provider-led associations pushed the government to: reduce burdens, help ease them into the new program, lower risk thresholds for what qualifies as advanced alternative payment models (APMs), and provide plenty more flexibilities so smaller physician practices don’t get penalized for not having the tools or resources to thrive under MACRA.
For the most part, CMS seemed to listen very closely to these concerns, as the agency continues to collect feedback in the 60-day window before the first reporting period kicks in on Jan. 1, 2017.
Washington, D.C.-based The Advisory Board released a statement applauding the relief that the Final Rule afforded in the first year. “Most—if not all—clinicians should be able to avoid a negative payment adjustment for performance year 2017. CMS proposes three options for providers subject to MIPS [Merit-Based Incentive Payment System] in 2017, the easiest of which providers can meet by reporting a single metric. CMS has also raised the low-volume threshold, exempting more small practices from MIPS,” the statement read.
Indeed, last month, CMS announced flexibilities that will allow eligible Medicare physicians to pick their pace of participation for the first performance period of the program that begins Jan. 1, 2017, aiming to allow physicians to ease into the program if they choose without getting hit with negative payment adjustments right away. These pathways range from sending in only some data into the Quality Payment Program; to sending in more data but for a reduced period of time; to “going all in” for an advanced APM.
Confirmed via the Final Rule, in 2017, only those clinicians on the MIPS track who don’t send in any data will receive a negative 4 percent payment adjustment; all others will receive a neutral or positive payment adjustment. The negative/neutral/positive payment adjustments in MIPS will grow to 9 percent by 2022. To this end, The Advisory Board also expressed satisfaction that providers will not be scored on the “resource use” category in 2017 and can satisfy full-year reporting requirements by reporting for a 90-day period.
MACRA’s Quality Payment Program has two tracks for eligible Medicare doctors—the APM track for those participating in what CMS calls an “innovative payment model,” and the MIPS track which is for Medicare Part B providers who will earn a performance-based payment adjustment. For months since the proposed rule was released, a key talking point was what would qualify as an advanced APM, and further, if the prerequisites for these alternative payment models were too aggressive in terms of how the government defined the “nominal risk” financial requirement.
Much of this was cleared up in the Final Rule. For one thing, CMS announced a new advanced APM in 2018—ACO Track 1+, which has lower levels of risk than other accountable care organizations (ACOs). CMS also changed one of the qualifications for participation in advanced APMs to be practice-based as an alternative to total cost-based.
What does this mean? CMS now predicts a much greater push into the APM track from what was previously considered. As Healthcare Informatics’ David Raths noted in this first look at MACRA, in the proposed rule, CMS had estimated that 30,000 to 90,000 clinicians would be qualified APMs in 2017, or less than 10 percent, give or take. However, with new advanced APMs expected to become available in 2017 and 2018, including the Medicare ACO Track 1+, and amendments to reopen applications for or modify current APMs such as the Maryland All-Payer Model, the Oncology Care Model and Comprehensive Care for Joint Replacement Model, the agency now anticipates approximately 70,000 qualifying APM participants in 2017 and 125,000 to 250,000 in 2018, or upwards of 25 percent.
Regarding the Oncology Care Model (OCM) specifically, Brenton Fargnoli, M.D., associate medical director, strategic initiatives at healthcare technology Flatiron Health, and practicing oncology hospitalist, says that the OCM was initially set up was so that downside risk would become an option starting in 2018—but as a response to the MACRA Final Rule considering this model for an advanced APM, downside risk will be an option for participating practices on Jan. 1, 2017. However, by virtue of the requirements, if downside risk is not elected, participants in the OCM would qualify for the MIPS track, notes Fargnoli.
Meanwhile, the Charlotte, N.C.-based Premier Alliance, previously disappointed with how CMS had defined nominal risk under MACRA, released a statement that said, “While we are pleased that CMS eased the policy defining the advanced APM to allow additional programs to qualify and has signaled it will increase the number of available models, the nominal risk standard remains way too high. As we have learned from members in our bundled payment and population health management collaboratives, these models require significant investment in redesigning care through new technologies, data analytics, and additional staff. CMS has chosen to ignore these realities.”
In a more in-depth interview with Healthcare Informatics, Danielle Lloyd, Premier’s vice president for policy development and analysis, says the hope was that “CMS might be taking into account the other takes of risk that organizations take on. It takes a few million dollars of capital to start an ACO and we consider that a form of risk that’s more than nominal.”
To this end, according to Farzad Mostashari, M.D., founder of Aledade, a company that focuses on physician-led ACOs, says that the most significant thing CMS did was “creating a smart way of defining what nominal risk was based on your income for Medicare Part A and Part B.” So, he says, “It starts at 8 percent and goes up to 15 percent, meaning if more than that proportion of your Medicare revenue is at risk, in a two-sided risk model, then that is more than nominal risk for you. This will absolutely shift the equation in terms of how many doctors will be in advanced APMs and out of MIPS,” he says.
While Premier’s Lloyd appreciates that CMS reduced the total Medicare Part A and Part B risk level requirement, for a health system-led organization, the Medicare Part A and B risk at 8 percent in many cases is going to exceed all other thresholds, she says. “So we don’t think this new option helps health systems and hospitals as much as physician groups,” Lloyd says.
Relief for Smaller Practices
Speaking of smaller physician practices, much of the industry reaction so far has been extremely complimentary towards CMS regarding how the agency listened and responded to the overwhelming concern of how MACRA would lead to the demise of small practices.
A Black Book survey from June revealed that two-thirds of high Medicare-volume small practices said they foresee the end of their independence due to the physician payment changes that will take place under MACRA. Additionally, much was made about a CMS-made table in the proposed rule that estimated 87 percent of eligible solo practitioners and 70 percent of practices with two to nine physicians could get hit with a negative payment adjustment early on in the program.
In the Final Rule, however, the new table estimates far less damage for small practices—as Politico’s Morning eHealth reported on Oct. 17, now, just “10 percent of doctor practices of fewer than nine physicians will be penalized.” Mostashari says that with how the proposed rule was outlined, participating physicians would have to take on total cost of care downside risk, meaning payments to Medicare totaling millions of dollars. For small and solo practices, this was considered detrimental to their independence. But now, due to redefining nominal risk based on a provider’s Medicare income, that’s no longer the case, he says.
CMS also did more to help small practices transition, including allowing them to join “virtual groups” to combine their MIPS reporting. Premier’s statement called for the acceleration of these groups, which aren’t scheduled to begin until 2018. CMS further said that many of these solo and small doctors will be excluded from MIPS; an estimated 32.5 percent of clinicians, or over 380,000, will not meet the low-volume Medicare threshold, which includes clinicians with $30,000 or less in Medicare Part B allowed charges or less than 100 Medicare patients, per the Final Rule.
Meanwhile, the Englewood, Col.-based Medical Group Management Association (MGMA) released a statement that said it is “pleased with the significant burden reduction for physician practices in the first year of the MIPS program and new alternative payment model options outlined in the final rule. It’s disappointing that flexibility provided for quality reporting in 2017 largely disappears in 2018 and beyond. The Centers for Medicare & Medicaid Services missed an opportunity to close the two-year gap between the measurement and payment periods, which would facilitate improved patient care by providing actionable feedback to physicians and more timely incentives. The sheer magnitude of a 2400-page regulation and its impact on physician practices can’t be ignored.”
Mostashari, though, feels that much of the flexibilities granted in the Final Rule essentially make both 2017 and 2018 “transition years.” He says, “They would do rulemaking in 2017 to see what 2018 will be like. I tend to be in the camp that feels you don’t want to push everything back; there should be rewards for the early majority and first movers. You wouldn’t want to see this increased flexibility come at the expense of those who are ready to go more aggressively. They will have to balance that,” he says.