MACRA: What’s Replacing the Sustainable Growth Rate

Feb 15, 2016 at 03:24 pm by steve

Andrews Dean

The annual nail-biting over potentially drastic cuts in Medicare physician fees ended last April with the repeal of the Sustainable Growth Rate. In its place will be the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).

“This is the biggest legislative act in healthcare since the Affordable Care Act,” says Andrews Dean, a compliance manager with a large Birmingham specialty practice.

Created when Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the two new payment methods will reward physicians for value over volume and streamline existing quality reporting programs into one new system. “They’re still laying out rules and regulations,” Dean says. “They know the basic framework, but the nitty-gritty will come over the next few years.”

By 2019, payment adjustments linked to the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM), and Meaningful Use will end. Instead, MIPS becomes the consolidation of those three quality-based programs and will eliminate any associated reimbursement penalties

Under MIPS, reimbursement increases or decreases will be a reflection of the composite score of data from four categories — Quality (30 percent), which will likely be based on the provider’s PQRS data; Resource Use (30 percent), which will likely utilize VM’s information to determine cost efficiency; Meaningful Use (25 percent); and clinical practice improvement activities (15 percent).

“So for MIPS, make sure your EHR has work flows and protocols to capture and report on PQRS, MU, and VM,” Dean says. Act now, because that first score may end up relying on data accumulated two years prior to the payment year, making effective tracking a valuable investment.

The MIPS score has been devised to make a notable impact on physician revenue versus the modest annual increase in fees by 0.5 percent scheduled from 2015 through 2019. When MIPS begins in 2019, reimbursement could increase up to four percent growing to nine percent by 2022.

Exemptions for MIPS tracking will be granted for physicians with too few Medicare patients to make data collection statistically valid.

Exclusion from MIPS will also include providers who show a significant portion of their revenues stemming from APMs, the only other Medicare reimbursement option designated by the MACRA. These programs include the Medicare Shared Saving Program, Accountable Care Organization (ACO), Patient-Centered Medical Home (PCMH) and Comprehensive Primary Care (CPC) initiative. 

Providers who receive a substantial portion of their revenue from APMs will receive a 5 percent annual bonus from 2019 through 2024. Dean believes Medicare added the incentive to motivate providers to participate in APMs over MIPS. “They’re trying to pass on the risk,” he says.

The choice of MIPS or APMs for each provider will be made by Medicare based on the provider’s revenue sources at the time. “It’s not like you’re going to receive a check box asking do you want to participate in MIPS or APM,” Dean says, making a practice’s decisions now, such as to become a PCMH or to join an ACO, a deciding factor of their future Medicare revenue source.

“Physicians should be looking now at what type of landscape they want to be in,” Dean says. Those currently succeeding under Meaningful Use and PQRS might want to stick with those and qualify for MIPS.

“However, I don’t think a lot of practices will choose to stay with MIPS,” Dean says.  For although, APMs come with financial risk, they also offer far greater potential financial rewards.

On APMs, though, care will be more of a team-based approach among healthcare providers. “The government wants to promote collaboration, among physicians, hospitals, and labs,” Dean says. “But if you enroll in an APM, how you do is going to be based on how well you have prepared to manage risk in your practice in relation to treating patients.”

The worst thing practices could do right now is to wait, Dean says. “Because if physicians want to be successful in the new era of value-based reimbursement, they have to adopt a strategy for how to get there,” he says.

And learn to track, assess and report quality measures. Because whatever path providers take, both programs will rely on quality measure data to set revenue. The only difference lies in whether Medicare or an APM oversight organization, such as an ACO, will be evaluating that data.

“Practices need to commit to look at their quality reports just like they analyze their financial reports,” Dean says. “Because pretty soon, they’re going to be one and the same.”




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