medicare access and chip reauthorization act of 2015 (macra) … · the medicare access and chip...

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

Chartis Primer; Post-Final Rule,

Post-Presidential Election (2016)

December 2016

November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.

MACRA Background and Objectives

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is bipartisan

legislation signed into law in April 2015.

MACRA repeals the Medicare sustainable growth rate (SGR) methodology used to

update physician fee schedule (PFS) reimbursement, and replaces it with a new

reimbursement model called the Quality Payment Program (QPP). Per its title,

MACRA also re-authorizes the Children’s Health Insurance Program (CHIP).

The QPP rewards the delivery of high-quality patient care through two paths:

Advanced Alternative Payment Models (Advanced APMs) and the Merit-based

Incentive Payment System (MIPS) for eligible clinicians.*

What is

*Eligibility, exemption criteria and program details on subsequent pages.


MACRA Background and Objectives

MACRA and the QPP were developed to replace an outdated payment system that

incented volume-based clinical practice with a model that incents value-based practice.

The QPP is intended to:

Support care improvement by focusing on (incenting) better outcomes for patients,

decreased provider burden, and preservation of independent clinical practice;

Promote the adoption of alternative payment models that align incentives across

healthcare clinicians and stakeholders; and

Advance existing efforts of delivery system reform, including ensuring a smooth

transition to a new system that unifies CMS’s legacy programs and further promotes

high-quality, efficient care.

What is the purpose of


Implications of the MACRA Final Rule

2017 will now function as a “transition year”: physicians may “pick their pace” as they transition into MIPS through multiple reporting levels, without receiving a penalty in that first year; thecost reporting category will not count toward the 2017 score at all.

MACRA is here to stay and will move forward as planned after the initial transition year; delaying preparations is not an option, and every qualifying practice (and related health system) will need a MACRA strategy.

The criteria for Advanced APMs was broadened, so more clinicians will qualify for that track.

There is an even greater reason for practices to push to meet the criteria needed to qualify as a participant in an Advanced APM under the slightly more relaxed definition, to avoid the MIPS track.

The eligibility requirements for MACRA have relaxed, allowing more clinicians to qualify as “exempt”.

A greater number of physicians will not be subjected to the reporting requirements and financial risk imposed by MACRA, but commercial payors likely will not be far behind with similar, wide-reaching reimbursement models.

Highlights


Implications of the 2016 Presidential Election

While the election of Donald Trump as president calls into question the future of the 2010 Affordable

Care Act, as well as many other policies enacted over the last eight years, almost all post-election

commentary from healthcare experts and policy analysts underscores that MACRA will not be

repealed and is unlikely to be changed in any meaningful way, in part because of the

strong bipartisan support it has had from the start, and because it is budget-neutral.

However, some details embedded in MACRA may be impacted – if the Medicare Shared Savings

Program is unwound, for example, qualifying criteria for Advanced APMs will have to be redefined.

In addition, to reduce the burden on clinicians, it is possible that the timing for MACRA roll-out will

be lengthened with an extended “transition” period, and the qualifying threshold may be raised in

order to exempt a larger number of clinicians from MIPS.


MACRA Paths

Through MACRA, clinicians will participate in either the MIPS or the Advanced APM tracks,

or qualify for exemption.

Exempt from MIPS due to limited Medicare exposure<$30,000 in yearly Medicare revenue, or <100 Medicare patientsAn estimated 380k clinicians

Participation in an Advanced Alternative Payment Model (Advanced APM) – must meet criteria

An estimated 70k–120k clinicians in 2017, and 125k-250k in 2018

Merit-based Incentive Payment System (MIPS)An estimated 592k–642k clinicians in 2017

MACRAPhysicians who are not exempt from MACRA will fall

into two tracks*

MACRA Track 2:Advanced Alternative

Payment Model (APM)

MACRA Track 1:Merit-Based Incentive

Program (MIPS)

Non-APMs APMs thatdo not qualify as “advanced”

An estimated

clinicians will be on this track

An estimated

clinicians will qualify for this track in 2017

592-642k+ 70k-120k

Medicare FFS payment adjustment, beginning in 2020

±4%

Medicare FFS payment adjustment by 2023

±9%

Bonus Medicare payment

5%

sunsets in

2024

* It may be possible to participate in one of the MACRA tracks as well as other CMS value-based reimbursement programs – for example, a primary care provider can be on the MIPS track and also receive CPC+ reimbursement. CMS’s Innovation Center is still determining how their programs, APMs, and MIPS will all relate to each other.

** APMs that do not qualify as advanced, and, therefore, who will fall into the MIPS track, will receive favorable scoring in this category.

Performance Category Scoring Weight

Quality (replaces PQRS) 60% in 201930% by 2022

Advancing Care Information(replaces Meaningful Use)

25%

Clinical Practice Improvement Activities (new)** 15%

Resource Use (replaces “cost” within the existing Value Modifier Program)

0% in 201930% by 2022

Physicians will be subject to bonuses or penalties based on performance

Through its budget-neutral design, MIPS bonuses for high-performers... ... will come at the

expense of MIPS penalties for under-performers.

Physicians must report on and will be scored in the following categories:

MACRA Track 1:Merit-Based Incentive Program (MIPS)

Date© 2016 The Chartis Group, LLC. All Rights Reserved.

O V E R V I E W

Qualifying Advanced APMs must (1) require participants to use certified electronic health record technology (CEHRT), (2) provide payment for professional services based on quality measures similar to MIPS, and (3) bear more than nominal financial risk, meeting a threshold of downside risk

Track 1 of the Medicare Shared Savings Program will not qualify; Tracks 2 and 3, with downside risk, will qualify; a new Track 1+ that will qualify is in development

clinicians will qualify for this track in 2018

125k-250k

2017 will be a transition reporting year; only those not reporting anything will

get a penalty of -4% Medicare FFS payment adjustment to hit in 2019

CMS estimates Advanced APMs will receive between $333m and $571m in APM Incentive Payments for 2019

For the transition year (2017 reporting, 2019 payment), CMS estimates that in the MIPS track there will be an equal split of $199m in negative payment adjustments (for those who report nothing) and $199m in positive payment adjustments, plus a $500m bonus pool for exceptional performers


MACRA Path Pros/Cons

Easy to qualify – the default track if you are not exempt and do not meet the criteria for advanced APM participation.

More difficult to qualify – must already have a substantial number of Medicare patients under a risk-based model that includes downside risk (see definition on following page).*

Clinicians will receive up to +/- 4% payment adjustment in 2020 (reporting year 2018) and up to +/- 9% payment adjustment in 2024 – thus the total potential upside is greater in MIPS than through the Advanced APMs, but there is a downside risk too.

Includes a positive payment adjustment of 5% for Medicare patients from 2019 (reporting period 2017) through 2024.

Performance thresholds for exceptional performers (positive payment adjustment and a bonus), good performers (positive payment adjustment), and poor performers (negative payment adjustment) will be set on a relative, not absolute, scale – meaning clinicians must out-perform other clinicians to get a bonus/avoid a penalty, and performance thresholds will not be known until after a reporting period; this model is not about hitting a pre-determined target.

*Advanced APMs will either be at risk of losing 8% of Medicare revenues (held back), or at risk of repaying CMS up to 3% of total Medicare expenditures, whichever is less. Medicare Track One Plus (1+) will qualify.


MACRA Proposed vs. Final RulesKey Differences

The final MACRA ruling softens some of the proposed legislation’s parameters including

establishing 2017 as a “transition year” by reducing the reporting burden.

Topic Proposed Final

Performance Period

Physicians need to report a full calendar year to be eligible for a positive payment adjustment.

In 2017, the “transition year”, physicians can report at least 90continuous days to avoid a negative payment adjustment and be eligible for a positive payment adjustment.

Avoiding the QPP Penalty

Physicians must report in all 4 MIPS categories in order to avoid the MIPS penalty.

Only physicians who report no data will face a penalty in 2019. Physicians can avoid the penalty by reporting a minimum amount of 2017 data (1 quality measure for 1 patient, 1 improvement activity, etc.)

MIPS Adoption All or nothing. More flexibility for providers to pick their pace for satisfying MIPS criteria – may follow one of four paths (see subsequent slide).

MIPSComposite Score and Bonus/Penalty

Positive, neutral, or negative payment adjustments of up to 4% in 2019 based on their 2017 performance in the form of a MIPS score.

Eliminated “Cost/Resource Use” from overall score for 2017, and increased weight of “Quality” (see subsequent slides for more detail).

Low-VolumeThreshold

Physicians with less than $10,000 in Medicare allowed charges AND fewer than 100 Medicare patients per year.

Physicians with less than $30,000 in Medicare revenue OR 100 or fewer Medicare patients per year.

Virtual Groups Establish virtual groups in 2018 (reporting option where up to ten clinicians can report as a group to accommodate smaller practices).

CMS will not implement virtual groups in 2017 transition year, but plans to allow physicians to form virtual groups beginning in 2018.

Advanced APM Qualification

Advanced APMs must take on “more than nominal risk” – meaning that they would be at risk of repaying CMS more than 4% of total Medicare spending.

Advanced APMs will either be at risk of losing 8% of Medicare revenues (held back), or at risk of repaying CMS up to 3% of total Medicare expenditures, whichever is less.Medicare Track One Plus (1+) will qualify.


2017 Reporting Options and Impact on Reimbursement

For the transitional year of 2017, providers may follow one of four paths to avoid a negative

4% adjustment to Medicare payments (to hit in 2019, based on 2017 reporting).

2017 Transition Year Reporting OptionsReimbursement Impact (2019, based on 2017 reporting)

No Reporting, and no qualification as exempt Negative 4% payment adjustment

1. Minimum Reporting

Report one measure in the quality performance category, or

one activity in the improvement activities performance

category, or report the required measures of the advancing

care information performance category

Neutral: avoidance of negative payment adjustment; no

eligibility for a positive payment adjustment

2. Partial Reporting

Report all MIPS measures and activities for at least 90 days

but less than a full year

Report more than one quality measure, or more than one

improvement activity, or more than the required measures

in the advancing care information performance category for

at least 90 days

Potential for small positive payment adjustment

3. Full Reporting

Report all MIPS measures and activities for all of 2017

Maximum potential for a positive payment adjustment

through MIPS; exceptional performers will be eligible for an additional positive payment adjustment

4. Participation in an Advanced APM +5% payment adjustment


Provider Implications Chartis Point of View

The final rule introduces some additional preparation time, but the reality of MIPS is

coming for the majority of physician practices. Time is of the essence.

Physician practices will need to develop a robust MACRA strategy – one that

aligns with their larger physician group’s strategy and/or health system’s strategy.

Quality is paramount, particularly in early years, thus building a robust quality

program and culture of continuous improvement – rather than small, reactive “band-

aid” solutions – will ensure long-term success.

Build capabilities that will facilitate provision of improved patient care and reporting

– this includes investing in clinical data informatics capabilities, and in systems that

will enable an understanding of the total cost of care and the drivers.

is here to stay.

Providers will need to change practice patterns and reporting patterns to succeed under

MIPS/Advanced APMs; those that have not begun preparations will likely fall behind.


Designing an Effective MACRA StrategyChartis Point-of-View

Highly reliable

approaches to quality

and safety

performance, as well as

process improvement

Proficiency in utilization

management with the

reduction of

unnecessary care

Culture of teamwork,

transparency, shared

success, continuous

learning, and

accountability

Analytic tools to drive

actionable insights in

leading clinical practice,

clinical variation

reduction, and rapid-

cycle shared learning

amongst physicians

Strong data

management,

information systems, and

risk stratification

capabilities

Actuarial insight into key

medical expense cost

drivers and action plans

to address them

Strong alignment with

and among physicians,

where they are

accountable for

performance together

Strong alignment,

coordination, and

connectivity between

physicians and their

acute (hospital) and

post-acute partners

Clearly articulated,

desired, and sustainable

market position

MACRA strategy is

incorporated to overall

enterprise strategy

Developing a clear/

compelling vision is

essential to long-term

success

Highly capable physician

leadership roles/

structures enable

consensus-based clinical

guidelines for better

outcomes

A comprehensive MACRA strategy should include four components:

Clinical Care Transformation

IT & DataManagement

Alignment &Integration

Strong Vision &Leadership


Questions for Physician and Health System LeadershipChartis Point-of-View

For the full Chartis Brief, All Eyes on MACRA: The Latest Accelerant to Value-Based

Care – Are You Ready?, please go to:

http://www.chartis.com/whitepapers/all-eyes-on-macra

To access the MACRA readiness assessment and planning guide,

please go to:

http://www.chartis.com/resources/files/MACRA-Briefing_Planning-Guide_NP.pdf

http://www.chartis.com/whitepapers/all-eyes-on-macra

http://www.chartis.com/resources/files/MACRA-Briefing_Planning-Guide_NP.pdf

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