MACRA in a Nutshell

 

A provider’s fee schedule will be based on their composite score.

Penalties take effect in 2019 but are based on actions taken in 2017.

There are three exceptions.  They are:
1.    Physicians billing less than or equal to $30,000 in charges to Medicare for 100 or fewer patients
2.    Physicians in their first year of enrollment
3.    Physicians participating in APMs

For 2017 & 2018 Requirements are for  Physicians (MD/DO and DMD/DDS), Physician Assistants, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists

In 2019 it is expanded to include physical and occupational therapists, speech-language pathologists, audiologists, nurse midwives, clinical social workers, clinical psychologists, and dietitians/nutritional professionals

So mental health, physical therapy, audiologists, and a few others are not affected until 2019

There are 4 performance categories:
1.    PQRS  –  60%
2.    EHR  –  25%
3.    Clinical Practice Improvement  – 15%
4.    Resource Use  –  0%  (not used in 2017, but will be in 2018 and on)
This means that a huge 85% of the score is based on PQRS and EHR.

MACRA Made Easy – The Final Rule Released

On Friday October 14th CMS released the final rule of MACRA.  Since many providers and staff that we encounter still have not even heard of MACRA despite being bombarded with emails and newsletters with information, we will start at the beginning.

MACRA is The Medicare Access and CHIP Re-Authorization Act which was signed into law in 2015 and is slated to be implemented in 2019.  Even though it will not be implemented until 2019 it will be based on performance data from 2017.  Many providers seem to be ignoring the information on MACRA.  Maybe because they see the year 2019 and figure they still have time, or maybe because it is just too darn confusing to figure out.  In either case, ignoring MACRA can be a costly mistake.

Basically MACRA takes the Meaningful Use (MU) Electronic Health Record Incentive Program, Physician Quality Reporting System (PQRS), and the Value-Based Modifier (VBM) program and combines them all into one Merit-Based Incentive Payment System (MIPS) program.

What does that mean to providers or Eligible Professionals (EPs)?  Well it means that EPs will be assigned a MIPS composite performance score.  This score will be calculated on a scale from 0 to 100 and will significantly influence their Medicare reimbursements.  In 2019 a provider’s payments may be anywhere from -4% to +4% depending on their MIPS composite performance score.

The MIPS composite performance score will be divided into the following components:

60% Quality (PQRS)  –  If providers are not reporting PQRS then they are could have a score of 40 or below right off the bat.

25% Advancing Care Information – This was previously known as Meaningful Use or EMR.  If providers are not demonstrating Meaningful Use then they could lose 25 points of their MIPS composite performance score.

15% Improvement Activates  –  EPs will be able to choose from a list of activities that best fit their practice.  At least one activity must be selected.  The activities are categorized as “medium” or “high” weight.  Full credit for this portion of MIPS is 60 points.  A high weight category earns 20 points and a medium earns 10.  One way an EP can earn 60 points would be to participate in three high weight activities from the list.

MACRA replaced the old Sustainable Growth Rate (SGR) method of determining fee schedule amounts for providers.  Providers will now have fee schedules that will be determined by their MIPS composite performance score.  So it is possible that providers in the same physical location can have completely different reimbursement rates.  This is not simply a 1.5% or 2% penalty.  This will determine the fee schedule and may result in providers receiving up to -9% by the year 2022.

The problem is that the score will be based on data from two years prior so the provider will have to deal with the lower fee schedule for up to two years in order to rectify the situation.  Providers need to understand that the claims that they submit and the actions (or lack of action) they take beginning January 1, 2017 will affect their Medicare reimbursement in 2019.

If an individual EP works for more than one group, the performance score is a weighted average.  If the individual EP changes groups, the performance score is based on the data from the previous period.  So for example, if an EP works for Middleville Health Clinic for the entire year of 2017, but then switches to Johnstown Medical in 2018, their performance score for payments in 2019 will be based on their reported data from Middleville Health Clinic in 2017.

If an EP is newly enrolled, or they are below the low-volume threshold of $10,000 for the reporting year, then they will have no MIPS score and will be considered exempt for that year.
If an EP has Medicare billing charges less than or equal to $10,000 AND provides care for 100 or fewer Medicare patients in one year they are not subject to MIPS.

Ignoring MACRA Can Be a Costly Mistake

In April of 2015 President Obama signed the Medicare Access and CHIP Reauthorization Act also known as MACRA into law.     CHIP stands for Children’s Health Insurance Program.    Basically in a nutshell MACRA is going to change Medicare’s traditional fee-for-service method of reimbursement into a value based methodology.    This could have a huge impact on how providers are reimbursed.

MACRA’s implementation will begin in 2019 but it will be based on the reporting year 2017.   The problem is that many in the billing community do not understand what MACRA is or how it will impact their practice.  Even though the implementation is still two and a half years away, the data that will be used to determine a provider’s fee schedule will be based on information reported in 2017 which is only six months away.

Many providers and their staff are totally unaware of the changes that will be implemented.  These changes can greatly affect their cash flow and income.  Ignoring MACRA could be a costly mistake.

So what exactly is MACRA?  Basically the government wants to reimburse providers based on quality of care, not quantity.  Currently providers are reimbursed on a fee for service basis.  They see a Medicare patient and they are reimbursed for that service based on the Medicare fee schedule.  The fee schedule amounts are determined by the SGR formula or Sustainable Growth Rate.  MACRA will replace the SGR formula.   Physicians will no longer be reimbursed based on volume of patients but on value of care.

Experts estimate that there are billions of dollars wasted due to wasteful, redundant and inefficient care.   The SGR formula became too difficult to manage and needed to be replaced.  MACRA will basically allow each provider to have an individual fee schedule based on their performance.  Under MACRA providers will have two options:

Option 1:  MIPS or Merit Based Incentive Payment System.  MIPS combines parts of PQRS (Physician Quality Reporting System), VM (Value based payment modifier) & EHR (Electronic Health Records) incentive program into one program.  Most physicians will be reimbursed based on MIPS.

Option 2:  APM or Alternative Payment Model.  APM provides ways to pay health care providers for the care they give to Medicare beneficiaries by sharing the risk.  Accountable Care Organizations (ACOs), Patient Centered Medical Homes, and bundled payment models are examples of APMs.  From 2019-2024 health care providers that qualify for APMs will receive a lump-sum incentive payment.

Most Medicare providers will fall under Option 1 or MIPS.  There are four components of MIPS:

1.    Quality – PQRS (50%)
2.    Advancing Care Information (ACI previously known as EHR/meaningful use) (25%)
3.    Clinical Practice Improvement Activities (CPIA) (15%)
4.    Resource Use (10%)

MIPS defines the financial impact on providers by creating a composite score for each provider.  The composite score will be between 1 and 100 and will be based on the four components above.   This composite score will lead to each provider having their own individual fee schedule.

Composite scores will be posted on a CMS (Centers for Medicare and Medicaid Services) public website know as Physician Compare.  CMS hopes that this will motivate providers by having an effect on their reputation.

Providers who are not reporting PQRS measures receive a 2% penalty for 2016.  Many providers choose to accept this penalty.  Once MACRA is implemented PQRS could have a greater impact on a provider’s reimbursement.  PQRS counts for 50% of a provider’s composite score.

The following is a chart of possible payment adjustments for providers based on their composite score:

•    2019:  +/- 4%
•    2020:  +/- 5%
•    2021:  +/- 7%
•    2022:  +/- 9%

Based on this chart, a provider with a low composite score may receive a payment adjustment of – 9%.  This could have a big impact on a provider’s income.

Currently MU or Meaningful Use is an all or nothing program.  This means that a provider either passes, or meets the requirements for Meaningful Use of EHR, or they fail by not meeting those requirements.   Under MACRA, MU or ACI will no longer be all or nothing.  In the past, a user with 31% was just as compliant as user with 75%.  Under MACRA ACI (previously MU) will account for up to 25% of a provider’s composite score.  The provider will receive credit for the amount of Meaningful Use they demonstrate.

The higher a provider’s composite score, the more they will be reimbursed for services provided to Medicare beneficiaries.  Provider can choose to suffer the penalties but a low composite score will result in low reimbursement for services.  They can also choose to mitigate or reduce the penalties by reporting PQRS and demonstrating meaningful use to increase their composite score.  They can also compete for incentive dollars to improve their fee schedule.

From 2015 to 2019 there will be an automatic 0.5% increase to the current Medicare physician fee schedule.  However this increase can be offset by penalties.   2019 to 2025 the reimbursement will be determined by MIPS or APM depending on what option the provider chooses.

It is urgent that providers prepare now so that their reported information in 2017 will not hurt their income in 2019.  They will have to decide how much time and energy their office will devote to the process.  Software companies are trying to make it easier for providers to reduce penalties by doing back end work to help reporting PQRS and ACI.

Many providers are still not reporting through the PQRS system.  The current penalty does not impact them enough to make a difference.  Many are also not demonstrating meaningful use.  With MACRA PQRS and MU will count for up to 75% of their composite score so it will not be so easy to ignore.

In order to limit the financial impact of MACRA providers will have to report using PQRS, demonstrate MU or ACI, and balance compliance with financial prudence.  It is important to start preparing now.

MACRA – Medicare’s New Payment Plan

Why does our government have to make everything so difficult?  Seriously the first two articles I read simply identified MACRA as the Medicare Access and CHIP Reauthorization Act of 2015 signed into law on April 16, 2015.  Both articles then went on to say that MACRA was going to be a “potential game changer” of our current health care system.  But neither explained why.

I had to dig around quite a bit before I could really get what I would call any understanding of what MACRA is myself.  So this is my layman’s version of MACRA:

•    MACRA repeals the SGR formula (Sustainable Growth Rate) that used to threaten substantial pay cuts to physicians.
•    MACRA will begin being implemented in 2019
•    There are basically two options for eligible providers.  A.  EPs can participate in MIPS, or Merit-Based Incentive Payment System.  MIPS is a modified fee-for-service model which consolidates PQRS, meaningful use, and value-based modifiers.  B.  If they qualify they can participate in the Alternative Payment Models or APMs.  Participation in APM is entirely voluntary.  APMs are new payment and delivery models approved by CMS.
•    MIPS is supposed to promote better care and smarter spending by evaluating EPs.  Evaluations will be based on quality of care, resourse use, clinical practice improvement activities, and meaningful use of EHR
•    There will be incentive payments for qualifying EPs

I will continue to gather information on MACRA and we will include more articles in the future.  For now there is still time for us to figure out how this will impact providers.  There is also time for them to delay the implementation which seems to be common with all new legislation in the medical field.