CMS Chief Tries to Sell AMA Delegates on MACRA

June 14, 2016

CHICAGO — Addressing hundreds of physicians here at the annual meeting of the American Medical Association (AMA), the head of the Centers for Medicare & Medicaid Services (CMS) Monday sounded like a physician himself as he tried to sell a new law that shifts reimbursement from fee-for- service (FFS) to pay-for-performance.

"The goal of the program is to return the focus to patient care, not spend time learning a new program," said CMS Acting Administrator Andy Slavitt, describing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). "We must take this opportunity to do better. We must sharpen our focus on paying for what works, reduce the time spent on paperwork, [and] make health information technology a tool, not an industry."

These applause-winning comments reflected standard physician complaints about Medicare. In a question-and-answer session afterward, however, Slavitt fielded requests from members of the AMA House of Delegates to make MACRA more physician-friendly than he described it. Delegates even broached the bold idea of putting off the first performance year for bonuses and penalties under the new plan from 2017 to 2018 to give them more time to prepare.

Slavitt said he was listening.

CMS Acting Administrator Andy Slavitt

MACRA replaced Medicare's sustainable growth rate (SGR) formula for setting reimbursement and its yearly threat of rate reductions with the Quality Payment Program (QPP), which takes effect in 2019. The QPP has two tracks. The default track, and the one in which most physicians will initially participate, is the Merit-Based Incentive Payment System (MIPS). Among other things, it combines and aligns three existing Medicare incentive programs — the Physician Quality Reporting System, the Value-Based Payment Modifier, and the program for meaningful use of electronic health records. In 2019, the bonuses and penalties are as high — or low — as 4% percent of Medicare FFS revenue. They increase to 9% in 2022 and beyond.

The other track allows so-called advanced alternative payment models (APMs) such as certain kinds of accountable care organizations (ACOs), to earn a lump-sum bonus of 5% a year, as long as they assume serious downside financial risk for their performance.

Leveling the Playing Field for Smaller Practices

Organized medicine lobbied relentlessly to kill the SGR formula, but it's already jittery about the QPP as set forth in proposed CMS regulations. The agency estimated, based on performance in Medicare incentive programs in 2014, that most physicians in practices with fewer than 25 members — and 87% of solo practitioners — in the MIPS track would incur a penalty. CMS explains that the forecast mostly reflects the past failure of physicians in small practices to report their performance.

"We expect reporting for small practices to be well above those [2014] levels," Slavitt told the House of Delegates. "However, solo and small group practices that don't report will be negatively impacted."

He acknowledged that reporting data on clinical and cost measures is harder on smaller practices than bigger ones given their bigger staffs and bank accounts. Accordingly, CMS aims to level the playing field by simplifying MIPS reporting. One way, Slavitt said, is to use automatic data feeds from Medicare claims whenever possible. And CMS will spend $100 million over the next 5 years helping small practices and those in rural and underserved areas get up to speed on the QPP in general.

In the question-and-answer time, a coalition of nine state medical societies said CMS isn't going far enough to help small practices succeed in the MIPS track. They wondered if CMS would consider creating a special transition period for these practices, or exempting physicians close to retirement from program requirements. They also proposed liberalizing the exemption for practices with a low volume of Medicare patients by raising the volume threshold.

Yet another proposal was postponing the first performance year of MIPS — which determines the first round of bonuses and penalties — from 2017 to 2018. The coalition of state societies said that physicians would have only a few months, and over the holidays to boot, to gear up for MIPS performance once CMS publishes the final regulations as expected later this fall.

Slavitt replied that he's heard these suggestions before. "All of them are on the table," he said.

A Plea Not to Be Cynical

Another complaint heard by Slavitt was that proposed CMS regulations on Advanced APMs and the requirement for serious financial skin in the game would severely limit the number of existing APMs, particularly ACOs, that could qualify. Why was the financial risk requirement so high?

Slavitt replied that there is some wiggle room on that issue. MACRA, he said, required Advanced APMs to have "more than nominal risk." It all depends on how the agency defines nominal risk, which is open to discussion.

Dialogue between CMS and physicians over the first rough draft of MACRA is critical, Slavitt said. He urged AMA delegates to stay engaged.

"I understand the temptation for this program to become a lightning rod for all that's wrong with the practice of medicine," he said. "But I ask that you not make it the case that until every element is perfect, physicians remain cynical and on the sidelines.

"I promise you that this process and this program will be better with your input and participation, as you help make sure it connected as closely as possible to supporting the realities of patient care."

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