Physicians, Are You Passing MACRAnomics 101?

Thursday, March 31, 2016 | Larry Sobal

Imagine that you’re in a new entry-level college class, but with a few twists. You’ve seen your tuition stabilize after years of a threatened increase of more than 20%. There are some old policies still in place that might cost you up to nine percent in 2017 (depending on whether you’re doing the right things this year) and a yet-to-be-determined penalty in 2018 before those programs expire. One of them, which we’ll call VBPM, has a financial impact to you in 2017, but it’s too late for you to impact it because it was based on 2015 grades. Not to confuse you further, but there are a bunch of new programs that may reward or penalize you starting in 2019—and they'll be determined by how you perform in 2017. You'll have to pick between one of two tracks, depending on which presents the greatest upside, given your performance and capabilities.

Welcome to MACRAnomics 101. Did I mention that this was a required course for all physicians who see Medicare patients?

Don't worry. The committee that oversees all these programs just met on March 17 to get feedback on the design of how this all works, especially how you’ll be graded and how financial rewards and penalties will be applied in the future, since it’s not totally defined today. I’m sure you can trust them since they have a very official-sounding name (House Energy and Commerce Committee) and, after all, they’re here to help you, right?

If all of this sounds crazy, welcome to MACRAnomics 101. Did I mention that this was a required course for all physicians who see Medicare patients?

For those of you who skipped out on the lectures, or slept through most of them, I'll make it easy for you. Here's a summary of my notes to help you understand the major points so you can make the honor roll.

In April 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which has 3 key parts to remember:

• It repealed the sustainable growth rate (SGR) methodology for determining updates to the Medicare physician fee schedule—and replaced it with positive physician reimbursement updates for 4.5 years. The law included annual updates (for Medicare Physician Fee Schedule services) of zero percent for January 2015 through June 2015; 0.5 percent for July 2015 through 2019; and zero percent for 2020 through 2025. For 2026 and beyond, the update will be 0.75 percent for eligible alternative payment model (APM) participants and 0.25 percent for all others.
   
• It established the Merit-based Incentive Payment System (MIPS) that sunsets current Meaningful Use, Value-Based Modifier, and Physician Quality Reporting System (PQRS) penalties at the end of 2018. This rolls requirements into a single program that’s more fee-for-service-like in its makeup. Beginning in 2019, MACRA provides bonuses for physicians who score well in the MIPS—and MIPS will become the only Medicare physician quality reporting program. Physicians will receive a composite performance score of 0-100 based on their performance in each of the four performance categories of quality (PQRS/30 percent); resource use (VBM/30 percent); MU (25 percent); and clinical practice improvement activities (15 percent). MIPS presents the first real opportunity for physicians to earn substantial bonuses for providing high-quality care, up to nine percent in 2022 and beyond.
   
• It established a way for physicians to participate in an Alternative Payment Model (APM) program (probably an ACO doing some type of value-based payment methodology) as an alternative to MIPS. To encourage physicians to participate in APMs and help offset investments or other costs they may incur, the legislation provides 5 percent bonus payments from 2019 to 2024 for those who join new models, in addition to the opportunities for increased revenues that many APMs provide if the physician practice generates savings. This allows for a transition period to support successful implementation of new models. Another advantage is that physicians would only be subject to the quality reporting requirements for their APM, as they would be exempt from the MIPS program.

If you can understand those three points, you’ll score ahead of the curve on the final exam.

The reality is that this is pretty complicated. As is usually the case in Washington, legislation meant to address one issue morphed into a larger bill, as legislative members dropped in a variety of other pending items or pet projects. MACRA was no different. So, in addition to simply replacing the SGR methodology, there are many other Medicare programs and categories of reimbursement that were piled in. The confusion-to-complication ratio falls just below the Affordable Care Act. 

Fortunately, like most college students, many others in your class will procrastinate when they realize that the new payment incentives won't go live until 2019, based on performance in 2017. Instead, they'll be planning a toga party to celebrate MACRA’s first birthday on April 16, which, conveniently, is a Saturday.

So, how would you grade yourself regarding your knowledge and readiness for MACRA? Are you getting an “A” (you fully understand MACRA, have viewed your QRUR, and are prepared to optimize the incentives), or an “F” (you haven't paid any attention to MACRA, don't know what your QRUR is, and are at risk for the maximum penalties)? Are you somewhere in between?

Learn more about MACRA at our MACRA-specific Resource Center--and don't miss the MACRA Readiness webinar on April 26!

 

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Larry Sobal is Executive Vice President of Business Development at MedAxiom. He has a 35-year background as a senior executive in medical group leadership, hospital leadership and insurance. As part of his current role, Larry consults, writes and presents on topics relevant to transforming physician practices and health systems.

 

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