MIPS, MACRA AND THE FUTURE OF MEDICARE
Tom James, MD
A
report last year by the Medicare Board of Trustees indicated that Medicare in its current state would become insolvent by the year 2026. In 1997, anticipating future financial issues with Medicare’ s viability, Congress passed the sustainable growth-rate( SGR) formula for Medicare with a goal of capping Medicare’ s cost trend to the growth of the gross domestic product( GDP). The SGR failed in reducing global physician payment as a strategy to reduce the total medical cost trend. Since 2003, 17 laws were passed to delay the implementation of SGR-led physician payment cuts. The SGR created uncertainty for physicians and an annual crisis for Congress. With bipartisan support, the SGR was repealed in favor of the Medicare Access and CHIP Reauthorization Act( MACRA) of 2015. Again, the goal was to make Medicare sustainable by anticipating that Medicare expenditures would grow at the rate of the GDP plus no more than one percent.
Prior to the repeal of SGR, the Centers for Medicare and Medicaid Services( CMS) had the opportunity to introduce into the MACRA legislation some principles that were viewed favorably by Congress, but largely ignored by the medical community. CMS believes that fee-for-service has misdirected incentives, so the goal is to move toward more value-based payment systems, termed in the legislation as“ alternative payment models” or APM. This means that payment will be based more on performance of specific outcome measures rather than on the performance of specific procedures or cognitive evaluations. Inherent to that is that clinical risk becomes translated into financial risk. Physicians and other providers will find not only that their incomes are dependent upon attainment of measures of cost( termed“ resource use”) and quality, but that they are in competition with each other. If there is a Medicare budget, then the dollars become inelastic. For every physician who achieves higher scores on cost and quality and so is eligible for higher reimbursement, there must be some who receive less.
In past years, commercial insurers were the ones pushing physicians with transparency tools, contracts and prior authorization. Now, Medicare is driving the changes in medicine. The strategy for its movement from fee-for-service to a value-based incentive system is to enlarge the number of payers moving away from feefor-service to value-based payment. While the states do control Medicaid in their own territory, federal incentives can help move more Medicaid programs toward this payment direction. Recognizing that the United States is not a single-payer nation, the MA- CRA legislation encourages commercial payers to participate in alternative payment models. Medicare is initiating the MACRA elements on its own to demonstrate to the commercial payers and Medicaid administrators that the movement to value-based purchasing will slow health care cost trends, before inviting Medicaid and commercial payers to join in.
This legislation has several key elements that are important for physicians and other health care providers to know, as well as a timeline. First, the MACRA legislation is not restricted to physicians only. In the quality and cost measurement period of 2015, the program applies to physicians, podiatrists, dentists and chiropractors. In 2017, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists will be included in the measure period. This applies to both employed and independent practitioners.
In addition, the legislation ends the Physician Quality Rating System in favor of the Merit-based Incentive Payment System( MIPS). For most physicians who see a significant volume of Medicare patients, MIPS will be the initial entry into the new payment methods. This will not immediately impact physicians who do not have a significant Medicare practice. MIPS may initially look like a simplification of existing Medicare programs, the Physician Quality Reporting System( PQRS), meaningful use, and value modifiers. MIPS will roll these programs into one, but over the next few years will be modifying both the percentage weight of quality and resource use to become equal. Additionally, the payments under MIPS will have both upside and equal downside modifiers. So payments in 2019 will have a potential upside increase of a four percent bonus, while there will be an equal four percent reduction for physicians at the lower end of the quality and cost curve. That differential becomes nine percent upside / downside impact on 2022 … just six years away. Further, the look-back period is two years because of the complexity of data capture and analysis. That means for 2019, the first year of the variation in payment, the measurement period is calendar year 2017. This gives very little time for doctors and other providers to understand their practice quality, cost and use of electronic records.
For MIPS, for the 2019 payment year, i. e. the 2017 performance year, the points will be calculated from the areas in the chart( page 10, Figure 1)— some of which the physician can select:
The quality measures are presumed to be coming from existing PQRS measures, but CMS will release the final measure list in November for a measurement period that starts in January 2017. The measurement data elements will be captured in various processes based upon the measure. This may come from attestations, claims submitted or vendors. The expectation is that larger physician practices will have a greater likelihood of an upward adjustment than will solo or small groups. This is because of the economies of scale of large practices, which can affect data capture and create a
( continued on page 10) JULY 2016 9