The Centers for Medicare & Medicaid Services (CMS) released the highly anticipated proposed final rule for the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) on Wednesday, April 27. The 962 pages released to the public establishes more clarity regarding the Merit-based Incentive Payment System (MIPS), which consolidates components of three existing payment models: the Physician Quality Reporting System, the Physician Value-based Payment Modifier, and Medicare’s electronic health record (EHR) incentive program.

One of the biggest highlights revealed is that MACRA removes the sustainable growth rate formula, which cut Medicare payments for some services, and replaced it with a .5-percent year-over-year increase in the physician fee schedule.

The proposal also links payments to value via MIPS and measures physicians in four areas:

  1. Cost
  2. Quality
  3. Practice improvement
  4. Technology use

With the CMS belief that the new consolidated program will offer physicians greater simplicity and flexibility, the agency is offering two paths for physician payments:

  1. Physicians can choose to participate in the Merit-based Incentive Payment System, or MIPS.
  2. Physicians can have a significant amount of their revenue generated under a qualifying alternative payment model, or APM.

The law will also allow providers to opt out of MIPS and receive enhanced rates beginning in 2019 if they participate in alternative payment models.

Fine details reveal that “providers must meet three requirements for each model to be considered eligible.”

Within the two tracks of advanced payment models, requirements include:

  1. Participants must use certified electronic health record/EHR technology
  2. Participants must provide payment for covered professional services based on quality measures compared to those used in the quality category of MIPS.

Payment Structure and Participation/QP Determination

Now, a model of payment structure is just one key consideration, but what about provider participation, engagement, eligibility, and results? To address that head-on, providers approached CMS with great concerns about whether they can participate in more than one APM model.

”If an individual eligible clinician who participates in multiple advanced APM entities does not achieve the qualified APM professional QP status through participation in any single APM entity,” CMS responded, “CMS would assess the eligible clinician individually to determine QP status based on combined participation in Advanced APMs.”

And what about rural health providers? Did we make the cut without getting cut? CMS addressed rural health as well, noting that the rule indicates that professional services performed at critical access hospitals, rural health clinics, and federally qualified health centers that meet certain criteria can be counted towards the QP determination.

Performance Period

The rule proposes the performance period as 2017 for the 2019 payment adjustment, meaning that the first performance period would begin in 2017 for payments adjusted in 2019. 

Why this Time Frame?

  1. The language of the proposed rule indicates that this time frame is necessary to allow data and claims to be submitted and data analysis to occur.
  2. CMS believes that this would allow a full year of measurement and sufficient time to base adjustments on complete and accurate information.

So with 2017 right around the corner, is this proposed final rule an example of a true call to action for physicians to recognize that the future of healthcare is indeed rooted in alternative payment programs? The buzz among healthcare experts as well as many on Capitol Hill already seems to indicate that physicians need to begin assessment and preparation in positioning their participation now. But many physicians would beg to differ that immediacy is the right path and that critical components will affect everything – from patient care, to how it is delivered, to what’s at risk, to sites of care.

More Questions than Clarity for Physicians, More Complexity and Less Inclusion?

  1. Did 962 pages create more questions than answers?
  2. While physicians are eager to adopt value-based payment models under the Medicare Access and CHIP Reauthorization Act, they are also concerned that the transition will be difficult and disruptive to patients.
  3. Is the CMS definition of alternative payment models too narrow and applicable?

Physicians and MIPS:

  1. CMS believes that in the first program year, at least, most physicians will choose the MIPS path.
  2. Physicians will select six outcome-oriented measures to track, and the budget-neutral program will carry upside and downside risk.
  3. There is lingering concern that CMS is “dooming” physicians in MIPS participation, since physicians have been doing ample work and none of it qualifies.

Physicians and APM:

  1. The APM path will reflect traditional Medicare payments in its first two years and then will be opened to all payers, including Medicare Advantage plans.
  2. There will be greater physician flexibility to make investments, such as hiring care coordinators.
  3. Physicians will assume risk for episodic care rather than the patient’s totality of health history (as with ACOs).
  4. Physicians will be taking on the entire CMS payment for an episode of care, not just their piece.
  5. Total spending could dwarf what the physician is paid. 
  6. The program could drive more physicians to join hospital groups because the model shows a preference toward larger health care systems. 
  7. Because hospitals are getting the lion’s share of the revenue, it doesn’t allow an independent, small, or rural physician practice to operate in a risk-based system on their own respective revenues. 
  8. Is there enough risk mitigation and protection? Physicians wouldn’t have the same waiver from fraud and abuse laws that exists in an ACO, and with a key focus on the hospital-physician relationship, it could create a kickback risk.
  9. How will APM really be defined?

Patients and Technology:

  1. According to the rule, patients would be attributed to physicians by way of a new coding system, allowing them to gauge whether they are coordinating the care for the patient or providing care for a specific need/complaint.
  2. Technology focus will emphasize interoperability, security measures, and information exchange, but duplication has to be removed.
  3. Will there be infrastructure that will allow providers to analyze data and use it to improve efficiency?
  4. CMS will require a software interface application called an API, allowing patients to access their health information.
  5. Quality reporting burdens will be mitigated by implementing a program called Advancing Care Information, accounting for 25 percent of physicians’ performance scores. This would allow ease of selection for the measures physicians report. Additionally, ACI would affect only Medicare payments to physician offices, not Medicare hospitals or Medicaid programs.
  6. If passed, this would replace the current meaningful use program, and reporting would begin Jan. 1, 2017, along with the other components of the Quality Payment Program.
  7. There would be no more “all or nothing” approach within meaningful use, as the new rule would omit requirements for clinical decision support and computerized provider entry in physician EHRs.
  8. Consolidation of past programs and concerns that efforts to prevent information blocking the focus on surveillance might create more burden and skepticism.

Overall Concerns/Observations

  1. Inoperability – It is critical that physicians have robust and interoperable electronic health records and options for treating patients beyond face-to-face meetings.
  2. CMS doesn’t seem to reflect on or provide inclusion for the variety and needs within the marketplace, hospital, and physician practices. A large hospital system has vastly different needs from those of an independent practice or a rural hospital and physician practice.
  3. Rapid healthcare policy changes won’t allow physicians the time to build sufficient infrastructure, resulting in loss of necessary physician engagement and participation support.
  4. Physicians are concerned that they won’t have sufficient funds to make changes while continuing to see patients.
  5. Physicians won’t have a trial-and-error period in determining what payment models and health record systems will work best for them.
  6. Will there be truly be, as CMS notes, “potential opportunities to align the programs to best serve clinicians and patients, and (engagement) with Medicaid stakeholders as well.”
  7. The proposed rule clarifies that existing alternative payment models will count as advanced APMs. The rule, for instance, excludes the Bundled Payments for Care Improvement initiative, as well as Track 1 of the Medicare Shared Savings Program.
  8. Is this a pathway for rural healthcare? Complexity and continual change are creating more operational costs, and what does this or other proposed final rule changes by CMS say about the future of the physician sustainability model for recruitment and retention, especially in the rural markets? 
  9. More physicians will continue to look at DPC (direct primary care) as the pathway to creating more physician satisfaction, patient engagement, and successful patient outcomes.  

The proposed rule is scheduled to be published in the Federal Register on May 9. CMS will solicit public comments on the rule over the next 60 days.

About 30 percent of physician payments are currently flowing through alternative payment models.

About the Author

Janelle Ali-Dinar, PhD is a rural healthcare expert and advocate with more than 15 years of healthcare executive experience in many key areas addressing critical access hospitals (CAHs), rural health clinics (RHCs), physicians and patients. Dr. Ali-Dinar is a sought-after speaker on Capitol Hill.  A former hospital CEO and regional rural strategy executive, Janelle is a past National Rural Health Association Rural Fellow, Rural Congress member Nebraska Rural Health Association President.  She is currently the Nebraska DHHS Chair of The Office of Minority Health Statewide Council addressing needs of rural, public, minority, tribal and refugee health and is serves on the Regional Health Equity Region VII council as Co-Chair of Rural Health and Partnerships.  Janelle holds a masters and doctorate in communications and recent graduate in public health leadership. Janelle is currently the vice president of rural health for Mygenetx.

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