What Did The “Doc Fix” Fix?:
MACRA’s Medicare Physician Payment Changes

The Medicare Access and CHIP Reauthorization Act (MACRA) makes two major changes in how Medicare will pay physicians and other clinicians. First, it implemented the so-called “Doc Fix.” That is, MACRA ended the flawed and much-maligned Sustainable Growth Rate (SGR) formula for determining Medicare payments and the annual ritual of Congress acting at the last minute to avoid draconian reimbursement cuts. Second, it created the framework for a Quality Payment Program (QPP) to further shift Medicare from a fee-for-service to a value and quality- based payment system. The QPP will eventually result in an increase or decrease in physician Part B payments of as much as 9%. The first QPP adjustments will be made in 2019 based upon 2017 data.

Pick Your Path

The QPP establishes two alternative paths to incentivize physicians to achieve high-quality and efficient care: (1) the Merit-based Incentive Payment System (MIPS). MIPS consolidates and streamlines Medicare’s current patchwork of programs (such as the Physician Quality Reporting System) to measure the quality and efficiency of care delivered by clinicians; and (2) the Advanced Alternative Payment Models (APMs). At least initially, most physicians are expected to participate in the QPP via MIPS.

The MIPS Path

On April 27, 2016, the Centers for Medicare and Medicaid Services (CMS) issued proposed rules (Proposed Rules) to implement key portions of MACRA. (Click here to review CMS’ Executive Summary of the Proposed Rules. Click here to review the Proposed Rules.) Under the Proposed Rules physicians reporting under the MIPS will be evaluated and scored in four performance categories:

  • Quality (50% in year 1) Clinicians will choose to report six measures (from a list of more than 200) that best reflect their practice;
  • Advanced Care Information (25% in year 1) This replaces the EHR Incentive Program. Clinicians choose measures that reflect how they use EHR technology with emphasis on interoperability and information exchange. Unlike the current “meaningful use” program, all-or-nothing EHR measurement and quarterly reporting will not be required;
  • Clinical Practice Improvement Activities (15% in year 1) Clinicians will be rewarded for activities that focus on areas such as care coordination, beneficiary engagement and patient safety. Clinicians will be able to select from more than 90 options to match their practice’s goals; and
  • Cost (10% in year 1) Scores will be calculated by CMS based on Medicare claims, meaning there is no reporting requirement. More than 40 episode-specific measures will be used to account for differences among specialties.

The physician’s annual MIPS score will be used to compute potential adjustments to the physician’s Part B payments. In the first year of the program (2019), the adjustment (up or down) generally cannot exceed 4%. The maximum potential adjustment will increase to 5% in 2020, 7% in 2021, and 9% in 2022 and thereafter. The payment adjustment in 2019 will be based upon the first performance period in 2017, which is just around the corner. Further, MACRA requires that MIPS scores be publicly reported. Under the Proposed Rules the scores would be available on CMS’ Physician Compare website.

The APM Path

The Advanced APM path is for physicians who see enough of their patients or receive enough of their payments through Advanced APM models such as the Medicare Shared Savings Program (Tracks 2 or 3), Comprehensive Primary Care Plus, the Comprehensive ESRD Care Model, and the Next Generation ACO Model. In general, these models require participants to bear a certain amount of financial risk, base payments on quality measures similar to those under MIPS, and require use of certified EHR technology.

Participants in the Advanced APM path are exempt from MIPS, and from 2019- 2024, will be paid a 5% Part B incentive payment. From 2026 on, participating physicians will receive a higher fee schedule update than those who do not participate. However, to determine if a physician meets the requirements of the Advanced APM path, all physicians will report through MIPS in the first year. Beginning in performance year 2019, physicians could qualify for incentive payments based in part on participation in advanced APM models developed by non-Medicare payers.

Getting Ready for MACRA.

Public comments on the Proposed Rules are due by June 26, 2016. It will likely then be a number of months before the final rules are issued. And the final rules could make significant changes to the Proposed Rules. In the interim, physicians and medical groups should become familiar with the general contours of MACRA, and start positioning themselves to be able to maximize their MIPS score or to significantly participate in Advanced APMs. In this era of straitened budgets and thin margins, physicians can ill afford to miss the opportunity for increased Medicare payments or risk potential major payment cuts under MACRA.

If you have any questions about MACRA, please contact your regular Miller Health Law Group attorney.


Click here to review CMS’ Executive Summary of the Proposed Rules.

Click here to review the Proposed Rules

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