On April 16, 2015, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), a law that repealed the Sustainable Growth Rate (SGR) formula for Medicare physician payment, whose problematic history has plagued Medicare physician payment issues for over a decade.
As such, MACRA has created new options for Medicare physician payment. Beginning in 2019, physicians may choose between the new Merit-based Incentive Payment System (MIPS) or participate in a qualifying alternative payment model (APM). A physician that is a qualifying participant of an APM (meaning the physician receives 25 percent of payments through services furnished through a qualifying APM in 2019 or 2020; 50 percent of payments in 2021 and 2022; and 75 percent of payments in 2023 and beyond) will not need to participate in the MIPS and will receive a 5 percent bonus to its estimated aggregate payments for covered professional services, according to the law.
Also noteworthy is that starting in 2017, MIPS will combine several existing programs, including the meaningful use program, the Physician Quality Reporting System (PQRS) and the Value-Based Payment Modifier (VBM). It will measure Medicare Part B providers in four performance categories to derive a score (0 to 100) that could impact a provider’s Medicare reimbursement positively or negatively starting at 4 percent in 2019 and gradually increasing to 9 percent for 2022. Specifically, according to a College of Healthcare Information Management Executives (CHIME) summary of the health IT provisions of the law, to implement the MIPS, MACRA directs the Centers for Medicare & Medicaid Services (CMS) to assess physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists (“MIPS Eligible Professionals” or “MIPS EPs”) on four performance categories: 1) Quality; 2) Resource use; 3) Clinical practice improvement activities; and 4) Meaningful use of certified electronic health record (EHR) technology.
What’s more, according to a Quality Measure Development Plan (MDP) released by CMS late in 2015, MACRA identifies five quality domains (i.e., clinical care, safety, care coordination, patient and caregiver experience, population health and prevention) for measures developed under the MDP, which aims to serve as a strategic framework for the future of clinician quality measure development. CMS is required to enter into contracts for the purpose of developing, improving, updating, or expanding its measure development plan, and must publish an annual report with progress made during each year, including a listing of the new measures developed. MACRA provides CMS $15 million each year from 2015-2019 to accomplish these tasks, according to the CHIME summary.
Still, nearly a year after the bill was signed into law, physician leaders find themselves in quite the precarious position—even as the first program year of the law is scheduled to start in less than 12 months, there is little awareness about the health IT provisions of MACRA amongst the provider community; CMS is expected to release a proposed rule this spring and a final rule later in the summer. As such, Leslie Kriegstein, vice president of Congressional Affairs at the Ann Arbor, Mich.-based CHIME, says there is substantial confusion throughout the industry regarding the bill’s implications.
“This is a fundamental payment overhaul,” Kriegstein attests. “Folks are pointing to 2019, but that’s the first payment year. As things stand today, we are rapidly approaching the first program year of 2017. There is no rulemaking yet, and it’s still going to be a very expedited timeframe by the time we respond to those proposals and see them finalized. Folks will have to put the pedal to the metal after that.”
Right now, Kriegstein adds, “We need re-education to bring folks back to reality. Who exactly who is eligible for any programmatic changes made via MACRA, and also, what’s within CMS’ ability, and what’s dug into statute? We’re waiting to see how CMS interprets the statutory authority that Congress gave them last year,” she says.
Tom Lee, Ph.D., founder and CEO of Chicago-based consulting and software firm SA Ignite, agrees that physician leaders need to become quickly educated about the legislation, if they are not already. First, Lee asks, what are the top-to-bottom financial impacts in dollars and percentage payment adjustments that MIPS could mean for an organization? He notes that it could be as much as a 36 percent financial impact on an organization’s Medicare Part B, “which is 10 times greater than any other program ever was.” Lee adds, “You have to get more educated. Given the short time window we have, if when the rule comes out is the first time you learn about MIPS, you will have very little opportunity to do anything. The learning curve is so steep.”
Tom Lee, Ph.D.
Lee notes that about a third of SA Ignite’s clients, mainly larger healthcare organizations, “are looking to get a piece of the MIPS pie, which could be substantial—up to a 27 percent bonus on top of your existing Part B. That’s a game changer,” he says. The other two-thirds, he says, are in penalty avoidance mode. “The ones looking for the pie, they are looking for more clarity about how the mechanics of how the points scoring system will work. The penalty avoidance folks are more eager to understand whether the additional administrative burdens that they have to take on overlays all of the other rules. How much will the cost of penalty be in relation to the administrative cost to make a provider MIPS compliant? Everyone is waiting with baited breath,” Lee says.
Indeed, there are several more aspects of the legislation that physician leaders would like to see ironed out. Kriegstein says that CHIME’s provider members have attested that the success of this payment mechanism, be it APMs or MIPS, will be so reliant on clinical quality measures. “That’s a continual pain point across our membership,” she says. “We have tried to have a meaningful dialogue about capturing performance, value, and outcomes. The quality measure arena we find ourselves in today is not mature and won’t get us the kind of measurement that the administration will need to sincerely judge physicians, and hopefully hospitals, on their performance.”
Kriegstein gives an example that physicians often groan about involving different quality measures for different Medicare reporting programs. “One payer in an accountable care organization (ACO) has slightly different definitions of hemoglobin A1C (HbA1c) control for a Medicare beneficiary diabetic patient from another payer in another program. Oftentimes in fact, providers are submitting dozens, if not hundreds—depending on their size—of reports per month, and the duplications, manual extraction, and complexity create a huge burden on them. It’s ridiculous. Let’s get to a single set of core measures,” Kriegstein says.
To this end, CMS and America’s Health Insurance Plans (AHIP), in collaboration, for the first time, just recently released seven sets of standardized clinical quality measures for physician quality programs that support multi-payer alignment. The idea, said CMS officials, is to reduce the confusion and complexity for reporting providers. Kriegstein applauded the effort as a step in the right direction, but notes that the CMS announcement “pertains to only a small subset of the quality metrics our members capture a report.”
Michael Martz, vice president and CIO at the Wheeling, W.V.-based Ohio Valley Health Services & Education, adds that that the government needs to choose quality measures that help providers take care of patients. “The intention in the initial language seems to focus on the government monitoring providers, rather than providers monitoring patients. Measures that help us monitor patients will drive the best outcomes,” he says.
Martz, who is also a member of the CHIME Policy Steering Committee and has been very involved in CHIME’s review of and comments on MACRA and meaningful use regulations, additionally notes that the language in MACRA mirrors a past tendency for CMS to have the desire to come out with new quality measures every year. “That’s not a bad thing necessarily, but these measures often take significant changes in the EHRs. So when the developers have to test and evaluate, and customers change the clinical processes and documentation practices, and get physicians trained, this is a long process from when the quality measures are announced to when we are really producing the quality data,” Martz says. “And I don’t think CMS truly understands how long that change is. We are asking that CMS recognize that length of time, but also slow down the cycle in which they introduce new measures. It should be every three to five years, not every year as we have seen.”
Kriegstein also notes that MACRA does not address payment models for hospitals—just physicians—and she and Lee both agree that alignment there will eventually be needed. While there is more consolidation in terms of physician practices being purchased by hospitals and health systems, even after the legal consolidation is completed, on an operations level, they are still very distinct, Lee says. “Clinical integration is the goal, but you still have siloes. It might be a long while until you have uniformed rules that spans both worlds,” Lee says.
Business as Usual
Moving forward, Lee says that providers can look at 2016 as a “dress rehearsal” year when it comes to MIPS, as 75 percent of the MIPS score in Year 1 will be from meaningful use and PQRS quality, as measured by the VBM program. MIPS explicitly bundles these programs together, and it is not ending meaningful use and PQRS, but absorbing it, Lee says. As such, providers have been doing these things for years anyway.
Kriegstein adds that folks can start thinking more about the long term, as CMS is hoping that folks move towards APMs, and away from the MIPS construct. “I think in terms of long-term planning and preparations, you want to look at how you can ultimately transitions into APMs, and not stick in the MIPS program, which is basically an aggregation of the existing quality programs. In the near term, it’s about optimizing what you have on the books, and being aware how you’re doing in the existing meaningful use and PQRS programs, while digging into what CMS is thinking for clinical quality improvement,” she says.
All of this could signal more ACO participation, as ACO providers will eventually be exempt from MIPS since they are in one of the APMs that are qualified. Lee predicts that down the line, the dominant form in the APM model will be Medicare Shared Savings Program ACOs. “They had an earlier start, have more uniformity, and have at least some critical mass,” he says. Kriegstein adds, “That’s the goal of the administration, and these are aggressive goals, too.”
Nonetheless, while confusion and uncertainty about the legislation are certainly rampant across provider organizations, Martz feels that overall, this will be a good step forward for healthcare. “It moves us to proactive healthcare rather than reactive sick care, which is the business we have been in. There is language in there that gets us towards stratifying our populations to focus on those with chronic care needs. It should save money for us,” he says. “Frankly, I feel that this law is a perfect reinforcement of our efforts that we have been under over the last few years.”