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Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
Chartis Primer; Post-Final Rule,
Post-Presidential Election (2016)
December 2016
Page 2November 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.
Page 3November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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MACRA and the QPP were developed to replace an outdated payment system that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
Page 4November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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
Page 5November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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.
Page 6November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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)
Page 7Date© 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
Page 8November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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.
Page 9November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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.
Page 10November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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
Page 11November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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.
Page 12November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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
Page 13November 2016© 2016 The Chartis Group, LLC. All Rights Reserved.
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