From the Washington Office

From the Washington Office: The operationalization of MACRA



On April 27, 2016, the Centers for Medicare and Medicaid Services (CMS) released its proposed rule on the Medicare Access and CHIP Reauthorization Act (MACRA). Fellows will remember that the MACRA legislation, passed in April of 2015, permanently repealed the Sustainable Growth Rate (SGR) formula and thus, represents the greatest sea change in Medicare physician payment since the establishment of the RBRVS (Resource-Based Relative Value Scale) in 1992.

In broadest policy terms, the law continues to advance the CMS policy goal of basing payment on quality and value over volume. From a granular perspective, the law combines Medicare’s three current quality programs into one new system. CMS published this 982-page proposed rule after reviewing the comments submitted by ACS and other interested parties in response to its request for information last fall. As I write, staff of the Division of Advocacy and Health Policy are in the process of crafting the ACS response to the proposed rule. Comments were due on June 27, 2016. It is anticipated that CMS will publish the final rule later this year, likely in late October or early November. Accordingly, the following description of the implementation of MACRA is based on the current understanding from the proposed rule, and is likely to change in some respects with the final rule.

Dr. Patrick V. Bailey
Dr. Patrick V. Bailey

CMS has designated the payment program operationalizing the MACRA law as the Quality Payment Program (QPP). The QPP has two tracks, the Merit-based Incentive Payment System (MIPS) and advanced Alternative Payment Models (APMs). For the first several years of the program, it is widely expected that the vast majority of physicians will participate in the QPP via the MIPS track. As such, I will direct the remainder of the text this month to the MIPS program.

MIPS: Merit-Based Incentive Payment System

The Merit-based Incentive Payment System, MIPS, consists of four components. They are: Quality, Resource Use, Advancing Care Information (ACI) and the Clinical Practice Improvement Activities (CPIA). Though the names have changed, Fellows are familiar with the substance of three of the components. For example, the Quality component replaces the Physician Quality Reporting System (PQRS); the Resource Use component replaces the Value-Based Modifier (VBM); and the Advancing Care Information component modifies and replaces the Electronic Health Record Meaningful Use (EHR-MU) program. The fourth component of MIPS is the new Clinical Practice Improvement Activities, which the legislation designates as intended to provide “credit for work to improve practice and facilitates future participation in alternative payment models.”

Composite Performance Score: MIPS participants will be assigned a Composite Performance Score based on their performance in all four components. For 2017, the first year for assessment under the QPP, 50 percent of the score will be based on performance in the Quality component, 10 percent will be based on the Resource Use component, 25 percent will be based on the Advancing Care Information component, and 15 percent will be based on the Clinical Practice Improvement Activities. In future years, there will be a gradual increase in the relative value of the Resource Use component with an equal and accompanying decrease in the value of the Quality component. As proposed, by the third assessment year (2019), the Quality and Resource Use components are expected to each account for 30 percent of the Composite Performance Score.

MIPS Quality Component: Though the Quality component of MIPS replaces the PQRS, CMS is proposing some changes that Fellows will welcome. As opposed to the previous PQRS requirement to report nine measures, the MIPS Quality component requires providers to report only six measures. One of these six must be an “Outcome” measure and another must be a “Cross-cutting” measure. While the reporting threshold for the percentage of patients on which reports will be required is proposed to increase substantially, ACS and other physician groups will be advocating that the required percentage published in the final rule be close to the 50 percent level found in current law.

Resources Use Component: There is also some good news relative to the Resource Use component in that there are NO reporting requirements. CMS will calculate this component from Medicare claims data and base its assessment of individual provider performance on the resource measures currently used for the Value-Based Modifier. Namely, those are the VBM Total per Capita Cost measure and the VBM Medicare Spending per Beneficiary measure. In addition, CMS will also be taking into account measures that specifically focus on episodes of care, something for which the College has previously advocated. Beginning in 2018, CMS plans to also take into consideration factors of patient condition and patient relation in order to address physician concerns about risk adjustment and attribution.

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