Today’s cardiovascular medical groups must deal with a continual barrage of reimbursement and regulatory changes. Fee-for-value, ICD-10, at risk contracts, and the newly announced cardiac bundling initiative for hospitals (set to begin in selected Metropolitan Service Areas in 2017), are but a few examples.
The Medicare Access and CHIP Reauthorization Act (MACRA) presents the single largest and most sweeping physician payment reform measure to date. MACRA transitions professional fee reimbursement from a “sustainable growth rate, prospective fee schedule” format to a “fee for value” model of reimbursement – in which quality outcomes and compliance rates for required practices (such as use of EHR) are used to determine physician reimbursement levels.
It is estimated that Medicare revenue for medical practices could decrease up to 4% in the first year if medical groups do not meet their base quality outcome(s) requirements, resource use, clinical practice improvement, and certified electronic health record (EHR) compliance targets. For poor performers, it is estimated that Medicare revenue reduction could hit an average of 9% by 2019-2020.
Here is a brief overview of what all CMS provider medical group organizations will be facing with MACRA:
Merit-Based and At Risk Incentive Payment Systems (MIPS vs. APM)
Physicians will be required to assume varying levels of reimbursement risk based on meeting certain performance outcomes (risk/incentive options are determined via a sliding risk/reward scale from minimum to maximum). The more risk the higher payment for meeting/exceeding quality and operational goals. This is known as the Merit-Based Incentive Payment System (MIPS).
A second option, Alternative-based Payment Models (APM), offer much higher financial rewards, but require assuming an almost full risk payment arrangement with CMS. Participation in this option requires medical groups to be proficient in delivering risk/capitation based services using newer, more sophisticated software tracking systems.
Getting into the Weeds
MACRA repeals the sustainable growth rate formula, streamlines multiple quality programs (Physician Quality Reporting Program, Value Based Modifier and Meaningful Use), and links the majority of fee for service payments to value and quality. MACRA applies to the majority of clinical providers of Medicare Part B services and established two payment tracks: Advanced Alternative Payment Models and the Merit-Based Incentive Payment System. The proposed rule narrowly defines Advanced APMs as downside risk-bearing models, such as Medicare Shared Savings Program Track 2 and Track 3, leaving the vast majority of eligible clinicians subject to MIPS.
- Eligible clinicians will be scored and ranked against each other nationally and scores will be publicly available
- Clinician scores during calendar year 2017-18 will determine payment adjustments in 2019-2020
- MIPS is required to be budget neutral and the payment bonuses and penalties progressively increase each year
- Scores are based on quality (50% of score in 2017, dropping to 30% in 2019), cost/resource utilization (10% of score in 2017, increasing to 30% in 2019), advancing care information (25%) and clinical practice improvement (15%)
- Importantly, the bottom quartile (25%) of clinicians will automatically receive the maximum penalty each year
Despite the penalty risks, the good news is that MIPS offers substantial upside to providers that perform well. The top quartile will receive a 10% bonus in addition to their positive payment adjustment. There is also the potential (with budget surplus) for up to an 18% additional bonus for top performers. The spread in potential payment adjustment could therefore be as much as 26% in 2019 and 46% in 2022 and beyond.
CMS Announces Changes to the MACRA Implementation Process
After a huge outcry from the physician groups, professional medical societies and other affected healthcare providers, CMS recently lengthened the adoption deadline for MACRA. In response to these concerns, CMS administrator Andy Slavitt recently stated, “We received feedback on our April proposal for implementing the Quality Payment Program, both in writing and as we talked to thousands of physicians and other clinicians across the country. Universally, the clinician community wants a system that begins and ends with what’s right for the patient. We heard from physicians and other clinicians on how technology can help with patient care and how excessive reporting can distract from patient care; how new programs like medical homes can be encouraged; and the unique issues facing small and rural non-hospital-based physicians. We will address these areas and the many other comments we received when we release the final rule by November 1, 2016.”
Preparing for MACRA
In preparation for the November 1, 2016 CMS ruling and its subsequent impact, CFA recommends the following preparatory steps that cardiovascular physicians/medical groups should begin doing right now:
- Based on the information presented above, conduct a basic “readiness inventory” to include ranking the current ability of your practice to address the following components of the MACRA payment process:
- Do you currently have/use a proven clinical practice performance improvement process for tracking and improving such things as patient satisfaction, procedure process efficiency, or scheduling?
- Do you use a certified EHR system for advancing care?
- Can you track and analyze practice resource/patient care costs?
- Are your practitioners proficient in and/or have you implemented a proven best practice/quality improvement process? Do you use tracking software for review, analysis and reporting?
- How old is your practice IT software?
CFA provides cardiovascular group practices with a menu of MACRA-based physician practice assessment tools, consulting support and technical assistance to successfully navigate the new payment reform challenges cardiovascular physicians are facing, including:
- Practice-readiness assessment/operational capabilities
- Optimization of practice IT capabilities
- Best practice methodology/templates addressing cost/quality requirements under MACRA
- CMS reporting requirements assistance
- Coding and billing review and improvement
As always CFA welcomes your comments and questions.