24 May 2016

MACRA Gets Real: What It Really Means for Doctors

MACRA – the Medicare Access and CHIP Reauthorization Act of 2015 – was signed into law more than a year ago. Yet it’s only recently (April 27, 2016) that the Centers for Medicare and Medicaid Services (CMS) finally released the first major proposed regulation under the law. The proposed rule on the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Model (APM) Incentive lays out the two payment track options under MACRA (referred to collectively by the CMS as the Quality Payment Program or QPP).

MACRA fundamentally changes how Medicare pays physicians and other clinicians who participate in the program. A key feature is the permanent repeal of the CMS’s unpopular Sustainable Growth Rate (SGR) formula for calculating how medical clinicians are reimbursed under the Medicare Physician Fee Schedule (PFS). SGR was designed to control Medicare’s spending on physician services. It increased payments when spending on physician services grew at a slower rate than the gross domestic product (GDP). Conversely, when physician spending grew faster than GDP, SGR cut payments. It was a simplistic solution to a complex problem.

From the time SGR was implemented in 1997, doctors were vocal in their opposition to the formula, which “left physicians in a constant state of uncertainty and threatened patients’ access to care.” For the next 18 years, clinicians strongly fought for SGR’s repeal. Over the years Congress enacted 17 “doc fixes,” repeatedly staving off temporarily the implementation of large and annually increasing cuts to fees for physicians’ services. The MACRA legislation passed last year averted a catastrophic 21.2 percent cut in Medicare’s payment rate for clinicians that otherwise would have taken effect on April 1, 2015.

According to the CMS, the goal of this legislation is to "reward better care, not just more care," moving away from fee-for-service or volume-based reimbursement methodology toward a value-based payment system (ultimately targeting 85 percent of all Medicare payments being tied to quality or value). MACRA purports to streamline the parameters for earning Medicare payments and minimize the burden on participants, and The American Medical Association has hailed this bipartisan legislation as a victory for medical practitioners.

Now that the CMS has released more details about how its new physician payment and reporting rules would work, however, it’s not clear whether (or, if so, how much) the burden of reporting will be reduced. In fact, for those on the MIPS track, reporting could be even more complex, detailed and expensive than before.


Under the MIPS option, the payment calculation is based on a composite performance score comprising four weighted performance categories: 50 percent quality (PQRS), 10 percent resource use, 25 percent meaningful use of certified EHR and 15 percent clinical practice improvement activities. These percentages may change over time, again producing uncertainly in the physician community.

The MIPS payment track takes a carrot-and-stick approach, and financial risk is a prominent feature. Doctors have upside opportunities if their MIPS composite performance scores are high; they also risk significant financial penalties if they do poorly. The portion of a physician’s at-risk Medicare reimbursement revenue will increase significantly during the 2019–2022 ramp-up period. In 2019, 16 percent is at risk, with potential penalties of up to 4 percent and potential bonuses of up to 12 percent. In 2020, the at-risk amount increases to 20 percent (-5 percent to +15 percent). In 2021, that number goes up to 28 percent (-7 percent to +21 percent). And from 2022 on, fully 36 percent of a doctor’s Medicare reimbursement revenue stream will be at risk (-9 percent to +27 percent). These percentages include the downside risk, upside gain and potential bonus payments. The program is overall revenue-neutral — a “Hunger Games” approach where the losers will pay the winners.

This makes MIPS a good choice for physicians who can demonstrate consistently excellent performance across the four weighted categories, especially care quality (which is weighted at 50 percent of the composite score) and can comply with the onerous reporting requirements. The rewards for superior performance are significant. But the reporting requirements will be burdensome. And doctors whose performance is poorer than that of their peers will risk significantly lower payments.

The APM track is the CMS’s preferred option, and the proposed rule provides are financial incentives for clinicians who participate in Advanced Alternative Payment Models to the required extent (by receiving enough of their payments or seeing enough of their patients through Advanced APMs). Accountable Care Organizations (ACO) and Patient-Centered Medical Homes (PCMH) are examples of Advanced APMs. The participation requirements will increase over time. During the first five years (2019–2024) qualified participants will receive a five percent annual bonus (Medicare Part B incentive payment). From 2026 on, clinicians who meet the qualification standards will receive a higher fee schedule update than doctors who do not participate “significantly” in an Advanced APM. From 2019 on, qualified participants also will be exempt from the MIPS payment adjustments and their associated financial risk and uncertainty.

According to the CMS, “Advanced APMs are the CMS Innovation Center models, Shared Savings Program tracks, or statutorily-required demonstrations where clinicians accept both risk and reward for providing coordinated, high quality, and efficient care. These models must also meet criteria for payment based on quality measurement and for the use of EHRs.”

The CMS’s proposed rule includes a list of models that would qualify as Advanced APMs, and it would update this list annually to add new qualified payment models. Beginning in performance year 2019, clinicians also could qualify for incentive payments based in part on participation in Advanced APMs developed by non-Medicare payers, such as private insurers or state Medicaid programs. The proposed rule also would create a Physician-Focused Payment Technical Advisory Committee to review and assess additional physician-focused payment models suggested by stakeholders. It is unclear how physicians will have input into what qualifies as an APM, which has the potential to shift the power to the payers in the determination of these arrangements.

It’s also not entirely clear how physicians participating in APMs would need to demonstrate that they meet the required threshold for share of provider revenue in APMs (i.e., with two-sided risk). Will a physician need to open up his or her entire book of business in order to provide evidence of qualification for incentives?

Advantage: Payers

MACRA is a huge boon for payers, helping them determine the value of the care that physicians provide, which will then dictate payment. With the consolidation of five of the biggest payers to three (since Aetna purchased Humana and Anthem bought Cigna), these private payers are larger and more influential. All of them want value-based care and will insist on value-based contracts. And it’s likely that they will start adding to their reporting requirements to match the CMS quality measures.

Payers’ increasing influence is also evident in MACRA, which shifts risks from the payers to the physicians, especially in the MIPS payment track.

MIPS Reporting Requirements Will Be Onerous

MACRA does, indeed, streamline reporting requirements for the MIPS track in the sense that it combines the requirements of the electronic health record meaningful use program, the Physician Quality Reporting System (PQRS) and the Value-based Payment Modifier (VBPM). It also adds a new category, clinical practice improvement activities. Beginning in 2017, MIPS-track providers (for most specialties) will need to report nine PQRS measures that cover three of the six National Quality Strategy Domains (Effective Clinical Care, Patient Safety, Person and Caregiver-Centered Experience & Outcomes, Communication and Care Coordination, Community/Population Health, Efficiency and Cost Reduction) and one cross-cutting measure.

But other aspects of MACRA are likely to make reporting more cumbersome for providers who choose this payment track. CMS requires all providers to prepare for both the MIPS and APM payment tracks. Although the new payment rules don’t go into effect until 2019, medical providers on the MIPS track will need to move from claims-based quality reporting to reporting via a qualified clinical data registry (QCDR) by Jan. 1, 2017 – the start of the new performance periods for MIPS and APMs. Those who don’t will face significant penalties starting in 2019.

Requiring these providers to submit their performance metrics reporting via a qualified clinical data registry to avoid penalties will make that data easier for CMS to analyze. But it also will put a significant additional burden on clinicians, who will need to contract with a CMS-approved QCDR to complete the collection and submission of PQRS quality measures data to CMS on their behalf. Now not only will providers have to collect, audit and validate the quality data, they also will need to prepare it for upload to the QDCR as an XML file according to CMS’ detailed technical specifications.

Exacerbating “Measure Fatigue”

Over the past decade, the number of quality measures directed at US health care providers by Medicare, Medicaid and private health insurance plans has continued to grow at a rapid pace. Collecting, analyzing and reporting data has become complex, time-consuming and expensive, resulting in “measure fatigue” that is a significant factor in the current physician burnout epidemic. A recent study reported in Health Affairs found that U.S. physician practices in four common specialties spend, on average, 785 hours per physician and more than $15.4 billion each year dealing with the reporting of quality measures. Now with MACRA, providers on the MIPS track will also need to contract with a QDCR and prepare the data to comply with CMS’ technical specifications and also simultaneously report both claims-based data and registry (QCDR) data, adding more time, complexity and expense for physicians and further exacerbating the problem of “measure fatigue.”

In recent years, “measure fatigue” has caused many clinicians to take early retirement rather than deal with the increasingly complex and overwhelming quality reporting requirements. These new additional administrative and financial burdens will hit doctors in individual private practice and small physician groups the hardest, and more clinicians likely will choose to become employees of a large company like Sheridan that will take care of most of the burden for them.

"Sheridan puts a high priority on supporting physicians. We believe in letting doctors be doctors so they can focus on providing the best possible care to patients with optimal, efficient use of resources," says chief quality officer Gerald A. Maccioli, M.D. "As part of our commitment to the “Quadruple Aim,” we have made – and continue to make – a significant investment in developing sophisticated tools that will significantly streamline the way our clinicians capture and report data as well as the amount of data they need to actively capture."

Ignore Quality Reporting at Your Peril

The core of the proposed Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Model (APM) Incentive rule is physician accountability. Quality reporting must also encompass capturing the patient clinical experience in a reportable manner.

Many doctors and medical group leaders still don’t have the basic infrastructure to measure performance on reported measures or to determine which measures to report based on their current performance. But not reporting quality measures is simply not a viable option going forward. The more granular and impactful reporting of quality measures is a “burning platform” for healthcare, and failure to comply with all payers’ reporting requirements will imperil the fiscal health and survival of physicians and medical groups of all sizes. Building and refining quality reporting and performance management infrastructure is now a matter of survival.

By January 2017, every Sheridan service line from Anesthesia to Pain Management will have a fully functional, fully deployed, service line-specific Patient Care Measurement tool that will provide reporting for payers, regulatory bodies, and our leadership team and facility partners. These tools will give our clinicians both ease of use and maximal reporting compliance in this dynamic new payment landscape. These tools will allow us to capture, analyze and report on data that goes far beyond what the CMS, payers and regulatory bodies such as The Joint Commission/AAAHC will require, serving as key strategic and clinical tools that will help us develop best practice guidelines at the local and national levels.