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Physicians Stymied by MACRA's Unknowns

Analysis  |  By Debra Shute  
   March 24, 2016

The final rule on payment reform under MACRA may be weeks away, but providers are bracing for it as they mull two new payment tracks and await clarification on several key terms found in the legislation.

It’s going to be huge. “It’s changing how we measure and deliver care going forward. It’s almost revolutionary,” says Darryl Drevna, director of regulatory and public policy for the American Medical Group Association.

What is ‘it?’

We’re talking about MACRA, the Medicare Access and Children’s Health Insurance Program Reauthorization Act. The bipartisan law passed last April to finally end the 17-year tyranny of the Sustainable Growth Rate formula for physician reimbursement under Medicare.

I chatted with Drevna and his colleague, Chet Speed, JD, LLM, vice president of public policy for AMGA, at the association’s annual conference (where MACRA was a hot topic) earlier this month and again by phone this week.

To backtrack briefly, when MACRA first passed through the House and Senate, major medical groups including the AMGA, the American Medical Association, the Medical Group Management Association, and the American Academy of Family Physicians cheered the demise of the SGR, and welcomed the financial stability offered by MACRA.

A few months after the law’s passage, I spoke with Dennis M. Dimitri, MD, president of the Massachusetts Medical Society, about the impact MACRA would have on physicians within my home state. His comments were mostly enthusiastic. “We no longer have the threat of 20% to 30% cuts in payment hanging over our heads,” he told me. “We have finally and completely replaced the flawed SGR formula.”

When I revisited with Dimitri on the topic from a national standpoint the other day, the practicing family physician added a crucial note to his original sentiment: “The devil will be in the details.”

2017 Reporting Period Poses Problems
We have a general idea of what MACRA’s two new payment tracks will entail:

  • The Merit-Based Payment Incentive System (MIPS)—aka ‘a new and improved fee-for-service’
  • Alternative Payment Models (APMs)—aka ‘ACOs on steroids’

But the Centers for Medicare & Medicaid Services (CMS) isn’t expected to release its proposed rule with the specifics until later this spring.

That’s a problem—even for the large medical groups best-positioned to bear risk, according to Speed. He notes that AMGA members generally reap at least $500 million in annual revenue and mostly have strong infrastructures in place.

“I’d say one-fourth of our members have already taken risk and they’re good at it and happy with it,” he says. “But for the three-fourths that haven’t really dabbled in risk, they’re the ones that are looking at the 2019 date and saying, ‘Wow, that’s not a whole lot of time to get ready.’”

Part of the trouble with the timeline, experts note, is that the financial rewards and penalties to be issued beginning in January 2019 will be based on data medical groups submit starting in 2017. So if CMS’s final rule regarding MACRA drops in November 2016 as expected, groups will have just 30 to 45 days to learn exactly what they’ll be measured on and start working toward those measures, Drevna explains.

The MMS is one group that is advocating for more time, Dimitri says. It is “pushing to try and move that 2017 data collection date off a bit because we aren’t sure that practices are really going to be prepared to do that, given that the rules aren’t available yet.”

What Does ‘More Than Nominal Risk’ Mean, Anyway?
During a U.S. House Energy Subcommittee on Health hearing last week, Patrick Conway, MD, deputy administrator for Innovation and Quality and Chief Medical Officer at CMS, acknowledged that the agency has yet to define several key terms found in the MACRA legislation.

In particular, the law states that to qualify as an APM, a medical group will have to take on “more than nominal downside risk.” That final definition will matter a great deal to AMGA members, says Speed, particularly surrounding the question of whether Track 1 ACOs will qualify.

“Track 1 ACOs don’t take downside risk; that’s why most of the ACOs are Track 1,” Speed says. “But the argument may be that ACOs say we’ve invested in some cases multimillion dollars in developing the infrastructure to be an ACO, and those payments we’ve made are not reimbursed, so in essence those are a risk.”

Other eagerly awaited details surround the design of the multiple APMs that will exist. Although CMS has actively engaged various medical societies in developing measures that will be relevant to different specialties and practice types, the American Academy of Dermatology Association (AADA) submitted a statement of record on March 17 urging “a gradual, phased-in approach to the MIPS and APM provisions in MACRA, that recognizes the unique challenges of specialty care.”

Choose Your Adventure (Both Look Dicey)
Despite the multitude of unknowns, physician practices are tasked to decide whether they’ll set out (switching in ensuing years is allowed) on the MIPS or APM path. While many organizations, such as the AAFP and various specialty societies, have made the public commitment to help their members navigate the entire MACRA journey, MMS’ Dimitri admits the work is daunting.

“What we are struggling to try and do as a medical society is help our physicians understand what these alternatives would mean for them—MIPS versus APMs—and what will work best for the practices of physicians and the patients that are being taken care of in those practices,” he says.

As for AMGA membership, made up of mostly large multi-specialty group practices, the MIPS or APM question remains widely unanswered, Speed says.

“To be brutally honest, most of them have not decided,” he says. “I think from our members’ perspective, they want to be an APM because it gets them out of a fairly rigorous MIPS measurement regime, and also there’s a 5% bonus to their Part B reimbursement—that’s a significant incentive. The way the APM provision is drafted, though, it’s a fairly high hill to climb to become an APM.”

What’s more, though MIPS may more closely resemble the FFS world physicians are used to, its pay-for-performance methodology (to be tracked by consolidating three existing quality reporting programs and adding a fourth surrounding practice improvement activities) presents its own set of hazards.

“It’s interesting,” notes Speed. “APM is obviously [a] risk, but MIPS is also. It’s a very aggressive risk-taking schedule. It’s 4% plus or minus in 2019, and by 2022 you could have a swing of 18% on your Part B revenues. That is a risk no matter what you say.”

Small Groups May Seek Help
As a result, there’s industry suspicion that MACRA will drive increased affiliations between small physician groups and larger organizations.

“We’ve heard anecdotally that smaller practices look at MIPS and say, ‘I can’t do that,’ and look at APMs and say, ‘I can’t be that,’” says Speed, suggesting they may seek safe harbor by becoming more closely integrated with larger groups, hospitals, and health systems. Large organizations appear to already be figuring some of these prospective relationships, which may or may not amount to full-blown sales and acquisitions, into their business strategies, he adds.

Although the MACRA legislation does set aside a collective $100 million in funding and technical support for practices that are small or located in rural or medically underserved areas, money for which the MMS helped advocate, Dimitri agrees that more partnerships may ensue.

“One of the things we may see is that a number of physician practices may try to figure out ways to be virtually organized in fashions that allow them to put together the resources to be able to deal with these complex needs,” he says.

More Challenges, Questions Ahead
Judging from the recent subcommittee hearing, Congressional sentiment appears strong to see that CMS implement MACRA in line with its intent, which is primarily, as the title of the bill says, to ensure Medicare access.

“I think [members of Congress] view this as a really strong step forward,” AMGA’s Speed says. “I think they want CMS to implement it the way they want it to be implemented. At the same time, I think they’re beginning to hear from their doctor constituents that it may not be as easy as they thought it might be.”


Debra Shute is the Senior Physicians Editor for HealthLeaders Media.

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