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MACRA Final Rule Eases Pay Changes, Initially

News  |  By Debra Shute  
   October 17, 2016

In response to clinician feedback, CMS has outlined a more gradual payment transformation intended to evolve over years to come. Physicians and major medical groups are responding with guarded optimism.

In the months leading up to the final rule, clinicians and healthcare organizations spoke out forcefully about their concerns about MACRA. With the release of its 2,398-page final rule on Friday, Centers for Medicare & Medicaid Services (CMS) officials appear to have heard them.

The feedback CMS received through scores of written and face-to-face comments can be summed up as a plea to make clinicians' and practices' transition to its new payment system as simple and flexible as possible, Acting Administrator Andy Slavitt said during a press briefing Friday.

MACRA Payment Reforms Finalized

"Ultimately, we're not looking to transform the Medicare program in 2017," he continued. "We're looking to make a long-term program successful," Slavitt said.

Not Revenue-Neutral
A significant clarification provided during CMS's briefing on Friday is that MACRA is not a revenue-neutral program. "It has some revenue-neutral features, but it has additional elements," said Slavitt. Those items include the 0.5% positive payment adjustment across the board, a 5% bonus for advanced APMs in addition to earned quality dollars, and a total $5 million in bonuses for top performers in the MIPS program.

The only clinicians who should receive a negative adjustment in 2017 are those who are not exempt but choose not to submit any data to CMS, stated Slavitt. "We have an extensive effort [underway] to educate, inform, and reach out to physicians who may not have heard about MACRA or not heard much about MACRA to keep that to a minimum."

Nonetheless, it appears that the bonuses will come out of the penalty pool, notes Joel Brill, MD, chief medical officer for Predictive Health, LLC, in Paradise Valley, AZ. "It's a zero-sum game," he says.

"So to the degree they have made it easier for practices to escape penalties, there is less bonus money available. This means that the more sophisticated practices who would tend to do well comparatively will get less bonus money than otherwise," Brill says.

Physician Reaction
Physicians have been reacting to the final rule with a degree of optimism.

"I am pleased to see the recognition of the importance of small, independent practices and the need to design the QPP program in a way that allows them to succeed," says Yul Ejnes, MD, MACP, an internal medicine physician and chair-emeritus of the American College of Physicians' board of regents.

"However, while the final rule accommodates these practices in various ways, it will still be a challenge for many of them to participate, and for many, perhaps most, this is still a very complicated program, despite the 'simplification' of combining multiple existing programs (PQRS, VBPM, and MU) into one," he adds.

In recent weeks, CMS addressed some of the most pressing concerns of physicians, including:

  • Speed of Implementation
    The ability for groups to "pick their pace" in which they'll comply with reporting requirements under the Merit-Based Incentive System (MIPS). Due to this change and a reduction in the number of measures to be reported, CMS expects that "most small practices can succeed" in achieving neutral or positive payment adjustments (in addition to the 0.5% positive adjustment across the board). However, potential rewards will be proportional to the degree of participation, notes Ejnes.
  • Volume Threshold
    An increase in the low-volume threshold for 2017, to less than or equal to $30,000 in Medicare Part B allowed charges or less than or equal to 100 Medicare patients. As a result, about 380,000 clinicians are exempt from the program in its first reporting year.
  • Broader APM Options
    Additional opportunities to qualify as an advanced alternative payment model (APM) and receive its automatic 5% bonus. In particular, an ACO Track 1-Plus model will be available in 2018. As a result, CMS now expects that at least 25% of participants will be in an advanced APM by 2018, and for numbers to rise significantly from there.

MGMA and AMGA Reaction
Major medical groups shared mixed reactions to the final rule as well.

Despite added flexibility in year one, the rule does not narrow the lag time between when practices report data and receive pay adjustments, noted Halee Fischer-Wright, MD, MMM, FAAP, CMPE, president and CEO of the Medical Group Management Association (MGMA) in a prepared statement.

"MGMA is pleased with the significant burden reduction for physician practices in the first year of the MIPS program and new alternative payment model options outlined in the final rule," she stated.

"It's disappointing that flexibility provided for quality reporting in 2017 largely disappears in 2018 and beyond. [CMS] missed an opportunity to close the two-year gap between the measurement and payment periods, which would facilitate improved patient care by providing actionable feedback to physicians and more timely incentives."

The American Medical Group Association (AMGA) also qualified its praise for the rule. "Ultimately, MACRA is about moving the healthcare system toward one that is based on quality and value, a goal that AMGA shares with the Department of Health and Human Services as well as the Congress," expressed Donald W. Fisher, PhD, CAE, AMGA president and CEO, in a prepared statement.

"We remain concerned, however, that in its understandable desire to provide flexibility, particularly as the program begins, CMS does not adequately recognize or reward the providers and systems who have made the investments to improve quality and decrease costs. We believe rewarding performance should be based on the value provided, not on size of the practice."

For more on healthcare policy, payments, and politics, attend the HealthLeaders Media webcast, How the 2016 Election Will Affect the Future Landscape of Healthcare Payment and Policy, on October 25 from 1PM to 2PM ET.

Debra Shute is the Senior Physicians Editor for HealthLeaders Media.

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