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The MACRA Landscape: Risk and Reward? Part I


Read on for a breakdown of what to expect from the near-final MACRA rule announced by CMS on October 14, 2016.

If the intent of the Medicare Access and CHIP Reauthorization Act (MACRA) is to move providers into a risk structure, via a so-called value-based care model or ongoing carrot-stick quality reporting on more singular levels, then the almost-final rule is merely a preview in the short term.

For 2017 and 2018, marginal risk and the minimum loss rate have been dropped from the nominal risk equation for providers participating in Advanced Alternative Payment Models (APMs). As buried about halfway through the rule—page 1624 to be exact—nominal risk will only address a revenue standard of 8% of average estimated total Medicare Parts A/B revenue. And also like much else in the rule, this level is expected to grow. The rule states that CMS will propose the revenue risk to rise to 10 to 15% beginning in 2019, and include as part of the equation…“or 3% of expected expenditures” as a benchmark standard.

Keep in mind also that this rule comes with a comment period toward a final-final rule prior to January 1, 2017.

For medical homes, which carry a lot of flexibility as an Advanced APM, as an automatic scoring element in the Merit-based Incentive Payment System (MIPS) and so forth, CMS has been clearer on long-term Advanced APM risk. Based on a total amount a provider could “owe for forego,” risk here is set at 2.5% of the APM entity’s total Medicare Parts A/B revenue, increasing to 3% in 2018, 4% in 2019, and 5% for 2020 and beyond.

What does it all mean? Coupled with Advanced APM Qualified Professional thresholds unchanged from the proposed rule and an expanded overall low-volume threshold for MIPS exclusion, the launch of MACRA decreases the risk and offers reward if providers are motivated to seek it.

For MIPS, the composite performance score has been set at a score of 3. Those scoring at 70 or more can receive a bonus of up to 10% of Part B charges from the $500 million pool set aside for this.

What’s also encouraging about the rule is the accelerated language around introducing expanded APMs and/or Advanced APMs such as bundled payments, which is really the only way specialists can get into the Advanced APM game.

Taken together, if MACRA comes out of the gate with a risk/reward whimper, that’s fine, because it’s not wrong to consider it a forever program.

The New Normal

Overall, deeming 2017 a “transition year,” the October 14 rule is option-heavy, lowers the bar for first-year measure reporting within the MIPS scoring track, lowers the bar for MIPS exemption, and sets a year-one reporting deadline of March 31, 2018.

For the Advanced APM scoring track, the rule maintains 5 models for now, and expands the criteria for “MIPS APMs,” meaning risk-bearing models bringing automatic MIPS scoring credit for eligible clinicians (ECs) who may not qualify as an Advanced APM: Advanced APM participants can receive a 5% bonus and be exempt from MIPS.

MIPS APM providers may well be participating in the same models, but may not reach certain patient count or payment levels to received Advanced APM benefits. These so-called Qualified Professional thresholds are unchanged from the percentages of the proposed rule. As the rule clarifies, existing and new model types that will bring automatic MIPS scoring credit also clarifies another APM set called “other payer” models and accompanying benefit options, all detailed below.

This means that the overall list of APMs is expected to grow, this year and next. And yes, this means this rule is not completely final; a 60-day comment period ensues and one or more new APMs are expected in a final-final rule by January 1, 2016.

CMS has provided a dedicated Web page on the rule, which includes links to various fact sheets and the entire 2300-page document. The Web pages include the entire list of 271 quality category measures and 93 (clinical practice) improvement activities ECs can select from for MIPS. Webinars will no doubt also be announced.

New MIPS exclusion threshold

For non—Advanced APM providers billing Medicare Part B to be excluded from MIPS reporting requirements altogether, the final rule massaged the low volume threshold to less than or equal to $30,000 in Part B allowed charges or less than or equal to 100 Medicare patients annually. First-time Medicare providers can also forego 2017 reporting.

Hospitals are not subject to MACRA, as they are in meaningful use. Federally qualified health center (FQHC) providers who bill through the Physician Fee Schedule are subject to MIPS, while those billing through the all-inclusion process are not. The same applies to rural health clinic (RHC) providers, as does the overall low volume threshold exemption for both.

Overall, CMS estimates that at least 592,000 ECs will be required to participate in MIPS in 2017, and that at least 70,000 will be eligible for the Advanced APM models.

Reporting options and payments

Overall, MIPS maintains the Quality, Improvement Activities (IA, formerly Clinical Practice Improvement Activities), Advancing Care Information (ACI, formerly Meaningful Use), and Cost Scoring pillars. But, not really. Again as a transition year, the cost category will not be reported or scored toward the 2019 payment adjustment. It will be included in 2018, as of now.

That leaves Quality (60% of score), IA (15% of score), and ACI (25% of score) for 2017 reporting, again with an ultimate reporting deadline of March 31, 2018, and there are a lot of ways to get there. Also, in line with the 90-day reporting options detailed below, ECs can start collecting and reporting data anytime between January 1, 2017, and October 2, 2017.

Last month, CMS announced it would start MACRA in 2017 and offer up 4 new reporting options to simplify the rollout. As translated in the rule:

  • Avoid a negative payment adjustment: Report 1 Quality measure, 1 aspect of the IA pillar, or report a minimum of 5 measures in ACI, and avoid a negative payment adjustment. (Choosing to simply forego MIPS in 2017 if a provider is eligible means a 4% negative payment adjustment in 2019.) With this option there is no required reporting timeline.
  • Possibly receive a positive payment adjustment: Report for 90 days and report more than 1 Quality measure, more than 1 IA or report more than the 5 minimum measures in ACI.
  • Full participation/qualify for positive payment adjustment: Report for 90 days or the entire calendar year. Quality. Report 6 quality measures including 1 outcome measure, or 1 specialty-specific or subspecialty-specific measure set. Here reporting mechanisms also count. Overall, ECs can report to MACRA individually or as a group. Those reporting as a group and using the CMS web interface must report 15 quality measures for the entire year for maximum points. The use of a qualified clinical data registry (like Wellcentive’s) or other registries means less measures reporting. Groups qualifying as MIPS APMs would report through the APM entity per normal and would not need to report additionally for this category. IA. Attest to 4 IAs for at least 90 days. (4 medium weight or 2 high-weight.)(Groups with less than 15 ECs or those in a rural or health professional shortage areas complete 1 high-weight or 2 medium weight activities.) ECs in certified patient-centered medical homes or an APM-designated medical home model automatically receive full credit in IA. Ditto MIPS APM ECs, such as those within MSSP Track 1 models or the oncology care model. ECs in any other APM receive half credit. ACI. Report 5 measures for at least 90 days. Gain additional scoring for reporting additional measures.
  • Bonus payment and MIPS exemption: Report via the existing Advanced APM payment model on an annual basis. ECs in an Advanced APM really have less of a puzzle to put together. Essentially, little changes to how data has been historically compiled and reported. The 5% bonus payments are scheduled through 2025.

For increased or full participators, MIPS ECs can choose different 90-day periods to report data per scoring pillar. Also, MIPS ECs can receive extra positive payment adjustments for the first 6 years of MACRA by submitting extra measures beyond the bare minimum or the full participation levels.

Click here to read Part II.

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