Blueprint for a Revolution in Paying Physicians: CMS Proposes MACRA Regulations

One leading expert called the proposal the most substantive change in decades, but some feared CMS is once again hastening the demise of the independent physician.

Moving the US healthcare system from one that pays for tests and procedures to one that rewards doctors for keeping people healthy has, thus far, been a story of fits and starts—good intentions but disparate programs, pilot studies, and lots and lots of reporting.

That changed Wednesday when CMS proposed regulations to carry out the 2015 law to modernize Medicare reimbursement. The 962-page notice to implement MACRA—the Medicare Access and CHIP Reauthorization Act—does much more than get rid of the Sustainable Growth Rate that everyone hated, and replace it with a 0.5% year-over-year increase in the physician fee schedule.

CMS calls for consolidating a host of individual programs and giving physicians a choice of just 2. The first, which is closer to what most doctors are using today, is called MIPS, for Merit-Based Incentive Payment System. It folds together the Physician Quality Reporting System, the Value-Based Payment Modifier, and the Medicare EHR Incentive Program into a single entity. Physicians using more evolved models will quality for flexible rewards under a separate system, called Alternative Payment Models (APM).

In a statement, CMS said it expects most doctors will use MIPS in the early going, which links payment to value based on a score across 4 areas: quality, cost, technology use, and practice improvement. A key feature of MIPS is the doctors’ ability to tailor the measures they use, based on the nature of their practice.

The APM offers physicians new tools to assume risk and offers more ability to do things like hire care coordinators, but there are significant downsides compared with accountable care organizations (ACOs), which have been grown exponentially, both for Medicare and for commercial reimbursement. ACOs are exempt from laws that punish healthcare organizations for steering patients to providers within the entity, because close provider relationships are the point. Right now, the APM system would not be.

Diverse reactions poured in, both in statements and on Twitter. Farzad Mostashari, MD, ScM, CEO of Aledade and the former national coordinator for Health Information Technology, called the proposal the most “substantive change to how healthcare is paid for in a couple of decades.”

The biggest rub, however, is that many of the well-known new models that doctors have been trying, such as bundled payments or Track 1 of the Medicare Shared Savings Program, would not pass muster for the APM track. One model that will qualify for APM is Comprehensive Primary Care Plus, which was recently expanded after a pilot period.

“We are deeply disappointed by CMS’ narrow definition of alternative payment models, which could have a chilling effect on providers’ ability to experiment with new patient-centered, value-driven payment models,” AHA Executive Vice President Tom Nickels said in a statement.

Others said the overall proposal continues the trend toward favoring large enterprises at the expense of the independent practice. Mostashari observed in a series of tweets there were many positive elements in the proposal, but it had one “blind spot,” which is “thinking that small independent PCPs (primary care physicians) can only do medical homes and that ACOs are all big systems.”

The largest professional group for physicians sounded optimistic. American Medical Association President Steven J. Stack, MD, said in a statement that CMS welcomed the physicians’ group to offer input in the process, especially on reducing the burden of reporting requirements for EHR meaningful use and clinical quality. “It appears on our initial review that CMS Acting Administrator Andy Slavitt and his senior management team have listened,” he wrote.

The proposed rule calls for using the 2017 as the performance period for payment adjustments in 2019. CMS stated the time frame was needed “to allow data and claims to be submitted and data analysis to occur.”

Both CMS and the AMA said that the proposal is just the beginning. “Today’s rule incorporates input from patients, caregivers, clinicians, healthcare professionals, and other stakeholders, but represents only the first step in an iterative implementation process,” CMS’ statement said.

Comments on the proposal will be accepted through June 26, 2016, and it will become final in the fall.