The New Medicare Physician Payment Model under MACRA: Initial Observations – Part 1

Mark Segal

I recently returned from GE Healthcare Digital’s major customer meeting, Centricity LIVE. While at this meeting, which provided many opportunities to speak with customers about their priorities, I presented on the new CMS Quality Payment Program (QPP) called for by the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), which sets out a path to value-based Medicare physician payment.

The CMS proposed rule implementing MACRA was released April 27; comments are due June 27. This document, 426 pages in the Federal Register’s 3-column format, heralds a once-in-a-generation shift in how Medicare pays for physician and other clinician services. A Final Rule is due by November 1, 2016 and likely in October or even September. Payments will be first affected in 2019, based on 2017 full-year performance.

Presenting on this proposal, with its tongue twisting acronyms and multiple scoring models, has reinforced just how complex this rule is, the monumental task faced by CMS in design and implementation, and the challenges providers and vendors face in making sense of and engaging with this new payment approach, especially for 2017.

QPP participants will need healthcare IT to be successful, including certified EMRs, specialty solutions, population health tools and analytics. Listening to interactions between GE product teams and our customers at Centricity LIVE, I was powerfully reminded that the best and most durable advances in HIT functionality and usability come from deep two-way engagement between developers and customers/users, each focused on responding to broad-scale trends, such as the shift to population-oriented and value-based care, as opposed to specific, detailed regulatory requirements.

The QPP includes a new Merit-Based Incentive Payment System (MIPS), which includes/replaces Meaningful Use (MU) for Medicare Eligible Clinicians (EC), Physician Quality Reporting System (PQRS), and the Value-Based Modifier (VM) programs. It also has an alternate track, the Advanced Alternative Payment Model (APMs include , some Accountable Care Organizations – ACOs and similar organizations and also certain Patient-Centered Medical Homes – PCMHs).

Consistent with CMS re-branding efforts, the proposal refers to “MIPS eligible clinicians” rather than Eligible Professionals and Meaningful Use is now called “Advancing Care Information” (ACI). Medicaid MU and hospital MU are not directly affected but likely to be modified in the future to align MIPS.

Eligible clinicians in Advanced (e.g., risk bearing) APMs are eligible for payment via the Advanced APM model and not subject to payment adjustments under the more familiarly prescriptive MIPS. (Many ECS in APMs will either be paid under MIPS or exempt from MIPS but not eligible for the Advanced APM bonus.)  APMs are CMS’ desired end-state for most clinicians. According to CMS, as QPP is now structured, providers will not know until well after the start of a performance year whether they qualify for exemption from MIPS adjustments, so for 2017, all Medicare ECs will be living with and reporting through MIPS.

As required by MACRA, MIPS has four parts, each with an assigned weight: Quality (which includes PQRS and Value-Based Modifier “DNA”), Resource Use (Value-Based Modifier “DNA”), Clinical Practice Improvement Activities – CPIAs (brand new), and Advancing Care Information. Reporting can be at the individual or group level and through multiple methods, including EHRs and HIT vendors registries, and even claims in some cases.

Performance in each category will be scored. Using these score and weights assigned to each category, ECs or groups of ECs will receive a MIPS Composite Performance Score (CPS). The CPS will be compared to a prior year baseline (mean or median) CPS. This comparison will determine whether a positive or negative payment adjustment will be applied to the Medicare fee schedule amount – the basic model is +/- 4% in 2019 up to +/-9% by 2022.

As expected, CMS proposed major changes to Medicare Eligible Professional (EP) Meaningful Use (MU), adding more flexibility such as eliminating “all-or-nothing” reporting, moving to a mix of “pay for reporting” and performance-based scoring for a priority subset of measures, and fewer MU/ACI measures (CPOE and Clinical Decision Support are out but still part of certified EHR technology). MIPS also changes quality reporting from the approach used for Meaningful Use and PQRS/Value-Based Modifier, requiring only 6 quality measures, including the option of specialty measure sets, with no separate “MU” quality reporting. This more flexible scoring methodology appropriately narrows the program focus to information access and exchange with patients and other providers.

CMS also proposes to require MIPS eligible clinicians, as well as EPs, eligible hospitals, and Critical Access Hospitals (CAHs) under the EHR Incentive Program to attest to not information blocking and supporting standards-based connectivity and also to attest to cooperation with ONC surveillance of certified EHR technology. These complex provisions could have significant negative implications and burdens for providers, creating what is in my view an unnecessary level of uncertainty and cost.

In the second part of this two-part post, I will identify healthcare IT implications of the new Medicare Quality Payment Program and provide my initial observation on the proposed rule and its implications for providers and vendors.

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