Businesswoman Reviewing Timeline on Screen at Meeting

These major changes in payment model programs will reward providers for the value and quality of the care they provide.

Navigating health reform

MACRA Rule Offers Merit-Based Incentive Payment and Alternative Payment Models

  • 10/26/2016

The recent release of the final rule of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provides organizations with the parameters for implementation. MACRA replaces the sustainable growth rate (SGR) with a new approach to pay health care providers for the value and quality of care they provide. This quality payment program (QPP) will combine multiple quality reporting programs currently used by The Centers for Medicare and Medicaid Services (CMS).

Two separate paths will come from this QPP: merit-based incentive payment system (MIPS) and advanced alternative payment models (APMs). The majority of these changes will take place from 2017 – 2025, and the complexity of these programs can be equated to the implementation of Diagnosis Related Groups (DRGs) for hospitals in 1982.

Merit-based incentive payment system

MIPS will combine and streamline the physician quality reporting system (PQRS), the value modifier program (VM) and the Medicare electronic health record (EHR) incentive program. MACRA reimbursements will only be utilized in years one and two for health care providers such as:

  • Physicians
  • Physician assistants (PAs)
  • Nurse practitioners (NPs)
  • Clinical nurse specialists (CNS)
  • Certified registered nurse anesthetists

The base year begins January 1, 2017, with the implementation of the payment methodology occurring in 2019. The following professionals are expected to be included in MACRA reimbursements in year three:

  • Physical therapists and occupational therapists
  • Speech language pathologists
  • Audiologists
  • Nurse midwives
  • Clinical social workers
  • Clinical psychologists
  • Dieticians and nutritional professionals

Clinicians that will not participate in MIPS are those in their first year of Medicare Part B participation, those below the low patient volume threshold (100 Medicare patients a year), and those specific clinicians already participating in APMs.

Most health care providers are expected to participate in MIPS. Eligible providers can either participate as an individual or as a group (which will be defined by a single taxpayer identification number [TIN]). These providers will be assessed by the four MIPS categories: quality, advancing care information, clinical practice improvement activities, and resource use. Performance categories will be aligned to a one year performance period, which is currently as 2017.


Alternative payment models

As the second path of this program, APMs are only an option for those providers or group practices that are participating in a Medicare shared savings program (MSSP), Medicare medical home, and/or a Medicare accountable care organization (ACO). Reimbursement for those selecting this method will be incentivized through quality and value measures. To qualify as an APM, health care providers and organizations must meet the following criteria:

  • Certified EHR technology
  • Quality measures comparable to MIPS  
  • Either bears more than nominal financial risk for monetary loss, or is a medical home model expanded under Centers for Medicare and Medicaid Innovation (CMMI) authority

This method is expected to be more difficult for health care providers to participate in, especially if they are not already operating in any of the APMs. Most providers will fall under the MIPS category.


Impact on rural providers

This rule includes clarification on how MACRA will be implemented for rural health care providers. The MIPS payment would depend on the billing method used by critical access hospitals (CAHs) and whether the clinicians practicing in the CAHs have reassigned their billing rights to the CAHs.

The payments to CAHs that bill under Method I of the CAH billing system would not be subject to MIPS payment adjustments. In addition, CMS would not apply MIPS payment adjustments to those CAHs using Method II billing if eligible clinicians do not reassign their billing rights to the CAHs. CMS is proposing that MIPS payment adjustments would apply to CAHs that bill under Method II when MIPS-eligible providers have reassigned their billing rights to the CAHs.

Rural health clinics (RHCs) and federally qualified health centers (FQHCs) will not be able to apply MIPS payment adjustments to their facility payments. Eligible providers providing items and services in RHCs and FQHCs that also bill under those respective payment systems would not be required to participate in MIPS or be subject to the MIPS payment adjustments. However, if the eligible providers practicing in RHCs and FQHCs bill under physician fee schedule (PFS), they would be expected to participate in MIPS and subject to MIPS payment adjustments.

Here is how CLA can assist you:

All of this is a focused framework for CMS to build a quality measure development plan (MDP), which is required by MACRA, to help build quality measures for future clinicians. Now is the time to focus on whether your clinicians and your organizations are prepared for MACRA.

CLA is here to help your organization think through some of the key provisions of MACRA. Our discussions can help you prepare for whichever path is most appropriate for you. We can provide the following:

  • MIPS readiness assessment
    • Review quality and resource use reports and PQRS reports from CMS
    • Determine whether to report as individual or group
    • Review contracts for impact of value-based reimbursement
    • Determine high-performance areas in quality measures
  • Identify areas of opportunities and implement a work plan
  • Assess coding and documentation (primarily for ICD-10 optimization)  
  • Financial analysis and modeling
  • Education for staff and providers

CLA’s team has in-depth experience working with organizations dealing with these changes, and we bring our specialized knowledge that comes from a long history of practicing in the health care industry. We can help you address the challenges these changes present while helping to strengthen your organization.