Final MACRA Regs Bump More Than Half of Clinicians Out of MIPS

October 14, 2016

UPDATED October 14, 2016 // The federal government today issued final regulations for the Medicare Accountability and CHIP Reauthorization Act (MACRA), which now exclude or exempt between 53% and 57% of physicians and other clinicians from a possible 2019 penalty in the new reimbursement system.

The Centers for Medicare & Medicaid Services (CMS) gave roughly 200,000 more clinicians this break mostly by redefining practices that would not have to participate in the new system because their involvement with Medicare is minimal. In its proposed MACRA regulations, CMS defined such low-volume providers as having less than $10,000 in Medicare-allowable charges and fewer than 100 Medicare patients. By raising the dollar threshold to $30,000 in the final regulations, the agency bumped up the number of low-volume providers from 226,000 to 384,000.

Of these 384,000 low-volume providers, 46% work in practices with fewer than 10 physicians, according to CMS. Organized medicine had complained that many small practices lacked the time, money, and expertise to master the new payment program by the time it goes into effect in 2017. The agency has repeatedly said that it's heard those complaints and is trying to make the new system more physician-friendly.

"Overall, the comments we received from across the country can be summed up this way," said Acting CMS Administrator Andy Slavitt in a news conference today. "Make the transition to MACRA as simple and as flexible as possible."

MACRA shifts Medicare reimbursement from fee-for-service (FFS) to pay-for-value through a new framework called the Quality Payment Program (QPP). There are two tracks in QPP. The default track, which initially will encompass the most physicians, is the Merit-Based Incentive Payment System (MIPS). It combines three existing incentive programs: meaningful use of electronic health records (EHRs), the Value-Based Payment Modifier, and the Physician Quality Reporting System (PQRS). 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. CMS calculates the cost-of-care score from Medicare claims; physicians must report their performance in the other categories.

In 2019, MIPS bonuses and penalties will be as high — or low — as 4% of Medicare FFS revenue, depending on performance in 2017. By 2022, this double-hinged adjustment will grow to 9%. CMS initially estimated that most physicians in groups of 24 or fewer in MIPS would incur a penalty in 2017, but qualified the projection as a bit fuzzy.

The final MACRA regulations issued today make it easier to get off the penalty hook by allowing physicians to pick a slower pace of implementation in 2017, an option that CMS floated last month. They can avoid a penalty — but not qualify for a bonus — merely by reporting their performance in one quality-of-care category or one practice-improvement category, for example.

The Advanced Alternative Payment Models (Advanced APMs) is the other payment track. Participants in APMs earn an annual lump sum bonus of 5% as long as they assume serious financial risk under their particular model and hit quality targets. Examples of Advanced APMs include next-generation accountable care organizations, Comprehensive Primary Care Plus, and track 3 of the Medicare Shared Savings Program. Participating in an Advanced APM exempts a physician from MIPS and its penalties.

The final MACRA regulations estimate that the number of clinicians in Advanced APMs next year could approach 120,000, which is 30,000 more than originally projected. The agency said it is creating more opportunities for clinicians to participate in this payment track, another concession sought by organized medicine. For example, more types of Advanced APMs will debut in 2017 and 2018. In one Advanced APM slated for 2018, the Accountable Care Organization Track 1+, participants would not have to assume as much financial risk as in other models, which would benefit smaller, less well-heeled, practices.

More Leniency Means a Smaller Pot for Bonuses

Among the most eagerly awaited portions of the final MACRA regulations were the details on the "pick your pace" options in 2017 that would spare physicians a MIPS penalty in 2019.

The first option, and the most strenuous, allows physicians to report their MIPS performance score for the whole of 2017, making them eligible for the basic 4% bonus.

CMS made this path easier by reducing the number of performance measures that physicians have to report in the categories of quality, practice improvement, and advancing care information.

The second option offers physicians more of a sprint than a marathon. They can report performance data for less than a full year, but at least for 90 days. The number of required performance measures is smaller, but so is the potential bonus.

The last option, basically, is a test run of MIPS. All a physician has to do is report either one quality measure, one practice improvement activity, or the required measures for advancing care quality.

CMS describes 2017 as a transition year toward full-blown implementation of MACRA across the medical profession. The initial leniency, though, comes at a price — a smaller pot for the basic 4% bonuses. These bonuses are paid for with penalties, so fewer physicians receiving a penalty shrinks the bonus fund. The agency initially estimated that it would shell out $1.3 billion in MIPS bonuses in 2019. Of that amount, $833 million represented the basic bonus — offset by $833 million in penalties — while another $500 million went to exceptional performers in MIPS. According to the final MACRA regulations issued today, penalties in 2019 will amount to $199 million, while the MIPS payout will consist of a corresponding $199 million in basic bonuses along with $500 million for exceptional performers for a total of $699 million.

Although they haven't fully digested the 2398 pages of the final regulations, which include lengthy responses to stakeholder feedback, the American Medical Association (AMA) and other medical societies are giving the massive document a cautious thumbs-up so far.

"Our initial review indicates that CMS has been responsive to the concerns raised by the AMA," said AMA President Andrew Gurman, MD, in a news release. "The new law gives many physicians the opportunity to be rewarded for improvements they make to their practices, and for delivering high-quality, high-value care to Medicare patients."

Likewise, Nitin Damle, MD, president of the American College of Physicians (ACP), said in a news release that the society's initial review of the regulations "reveals that CMS incorporated numerous recommendations made by ACP in order to simplify and reduce burdens on physicians and their practices."

More details about the final MACRA regulations are on the CMS website.

Follow Robert Lowes on Twitter @LowesRobert

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