On April 27th 2016, CMS released a significant new ‘proposed rule’. Once this becomes a rule, it will chart Medicare payment course for the foreseeable future. MACRA or Medicare Access and CHIP Reauthorization Act 2015, which continues to be supported by both parties, will alter the way Medicare pays to providers who give care to Medicare patients.

MACRA will replace Standard Growth Rate (SGR) which determines Medicare’s payment to healthcare providers. To replace Standard Growth Rate, MACRA will establish a new value based reimbursement systems called the Quality Payment Program (QPP). Under QPP there will be two payment models

1. Merit-based Incentive Payment System (MIPS)

2. Alternative Payment Model (APM)

CMS predicts that most of the providers will be subject to MIPS for the first year of MACRA that is till 2017, this will include providers who reports PQRS and Meaningful Use and also those who are not part of any. ACOs that do not bear enough risk for exemption, will also fall in this payment model.

MIPS is the combination of the three existing models namely Meaningful Use, Physician Quality reporting System (PQRS), and Value Based Modifier (VBM). MIPS will categories four measures to compare provider performance to a MIPS composite performance score (CPS) of 100 points. Those four measures are

1.Quality (50%)

2.Advanced Care Information (25%)

3.Clinical Practice Improvement Activities (15%)

4.Cost Category (10%)

Composite Performance Score earned for a given year determines MIPS payment adjustment in the next calendar year and scores earned by each physicians will be made public. So, it is important to understand and prepare for the four measures.

1. Quality

Clinicians can choose six measures to report to CMS, that best reflect their practice. One among these measures must be an outcome measure or a high quality measure, and one a cross cutting measure. Clinicians can also choose to report a specialty measure set.

2.Advanced Practice Improvement Activities

Clinicians will report key measures of interoperability and information exchange. Clinicians are rewarded for their performance that matter most to them.

3.Clinical Practice Improvement Activities

Clinicians can choose the activities best suited for their practice, the rule proposes over 90 activities to choose from. Clinicians participating in medical homes earn full credit in this category. Those participating in Advanced APMs will get at least half credit.

4.Cost Category

Cost category points are calculated by CMS on the basis of claims and availability of sufficient volume. Clinicians do not have to report anything for this category.

CMS, has suggested a delay in MACRA implementation out of consideration for small physician practitioners. But even with the delay, MACRA will become a reality soon and it can have the following impact on practices.

1.Practice Revenue

MACRA will have two impact on practice revenue, annual inflationary adjustment to the part B fee schedule, by which there will be a small increase for payment years CY2016 to CY2019, which will be the first payment under QPP and MIPS payment adjustment on the group/physician’s Composite Performance Score based on which there can be significant variations in reimbursement.

2.Lots of Data to Collect and Process

The MACRA act is incredibly complex and precise in its details. With all the data to be reported for validation, physicians will have to have an organized system to collect and verify the data. For some providers this might be welcome upgrade, but for the small practices this would mean additional investment on infrastructure and staff.

3.Improve Care Quality

MACRA will effectively shift accountability focus so that there will be an increased counselling and follow-up. By connecting the payment model to care quality, providers will be more invested in population health of community they serve.

4.Practice Reputation

There is call for transparency in healthcare payment and MACRA CMS is heeding to that call. MIPS will publish each eligible physicians annual Composite Performance Score (CPS) within a year, after the end of the relevant performance year. These published results will have an impact on provider’s reputation and indirectly their revenue. A good score, probably higher than a national average will work in favour of providers and a bad score will do the opposite.

Over the past few years CMS and the Federal government have been pushing healthcare sector away from fee-for-service to value-based-service. With MACRA implementation scheduled next year, CMS will achieve a great much, in this direction. MACRA law may pose to disturb small physician practitioner’s quiet afternoons for a while, however the hope is that when the dust settles everyone will stand to benefit.

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