CMS: Dire MACRA Estimate for Small Practices Not 'Reality'

May 17, 2016

The Centers for Medicare and Medicaid Services (CMS) is backing off from an estimate in table form showing that most clinicians in groups of 24 or less will incur a penalty come 2019 in one track of Medicare's new payment system.

"I don't think that table represents the reality," Acting CMS Administrator Andy Slavitt told apprehensive members of Congress in a hearing last week. Instead, small practices can prosper just as much as large ones in the new system as long as they report performance data to CMS, said Slavitt. And the agency will lend a hand to help them succeed.

The orphaned estimate appeared in last month's proposed regulations for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which replaces the sustainable growth rate formula for physician compensation. In its stead is the Quality Payment Program (QPP), which gradually shifts reimbursement from fee-for-service (FFS) to pay-for-value, as in high-quality, low-cost care.

QPP is a two-track program that breeds more acronyms — the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs). MIPS, the default track, will encompass the vast majority of physicians when it debuts in 2019. It combines and streamlines three existing pay-for-value incentive programs: meaningful use of electronic health records (EHRs), the Physician Quality Reporting System (PQRS), and the Value-Based Payment Modifier. Physicians will receive a bonus or penalty based on their composite score across the performance categories of quality of care, cost of care, clinical practice improvement, and meaningful use of EHRs, now called advancing care information. In 2019, the bonuses and penalties are as high — or low — as 4% percent of Medicare FFS revenue, and increase to 9% in 2022 and beyond.

Fear, Loathing, and Table 64

Lawmakers intended MIPS to help clinicians transition from FFS to pay-for-value with a minimum of fuss and a reasonable chance at success. In one table of the proposed MACRA regulations, CMS estimated that of 761,000 clinicians who were not exempt from MIPS for one reason or another, a slight majority — 54% — would earn a bonus in 2019 based on their performance in 2017. The other 46% would experience a pay cut as underperformers.

Another table — the now-infamous Table 64 — revealed that the majority of MIPS underperformers were clinicians in practices with 24 or fewer members. Soloists were especially hard hit. CMS projected that 87% would be penalized. In contrast, more than 80% of clinicians in groups of 100 or more members were projected to earn a bonus. Commentators seized on those numbers as one more sign of the government pressuring small practices to enter Big Box medicine.

CMS was required by federal law to assess the impact of its proposed regulations, and the agency admitted that it was a hard job. It based its estimates in part on how clinicians performed in Medicare incentive programs in 2014. CMS stated that this estimate couldn't reflect that physicians would respond differently to MIPS than they did to PQRS requirements in 2014. Because of this and other limitations, the agency said, "there is considerable uncertainty around our estimates."

From Uncertainty to Unreality

Appearing before a health subcommittee of the House Ways and Means Committee last week, Slavitt fielded questions about the implications of Table 64. "If CMS is trying to win back the hearts and minds of physicians, this proposal falls short, since it will continue to force physicians out of their solo or small practices," said Rep. Sam Johnson, (R-TX).

Slavitt attributed the dire estimates mostly to the failure of most solo and small-group practices to report PQRS data in 2014. If anything, the estimate for 2019 underlines the importance of making the reporting burden as light as possible for physicians in these practices. "They need to be practicing medicine, not doing paperwork," Slavitt said.

"This is just a proposal," he added. "We're hoping people can give us further ideas on how to reduce the administrative reporting burden."

CMS also attempted to make MACRA sound less like a massacre and more like macramé in a document titled "Flexibilities and Support for Small Practices" posted on its website last week. "CMS is sensitive to the concerns expressed by the proposed rule's regulatory impact analysis, which was perceived to show that the Quality Payment Program would negatively impact small practices," the agency stated.

In terms of flexibilities, CMS cuts some slack for practices of nine and fewer clinicians by subjecting them to only two population health measures in the quality category compared with three such measures for larger groups, according to the agency document. In addition, clinicians can choose the measurements and reporting systems that work best for them, and earn bonus points through additional reporting, or participating in an APM.

In addition, the agency noted that MACRA budgets $100 million over 5 years for technical assistance to practices with 15 or fewer clinicians, especially in rural and underserved areas. The aim is to help these practices boost their MIPS scores and transition into advanced APMs, where both financial risks and rewards are greater. The government is pouring millions of dollars into other initiatives to help small practices thrive in either MIPS or advanced APMs.

The deadline for the public to submit comments on the proposed MACRA regulations is June 27. The document explains how to submit comments.

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