MACRA Final Rule: CMS Announces Flexible Approach

No doubt sighs of relief could be heard from across the industry when the Centers for Medicare & Medicaid Services (CMS) announced its flexible approach to next year’s reporting requirements under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS took these flexibilities even further in its final rule released last Friday. Below I dive into some of the changes CMS made for the 2017 “transition year” and beyond.

  • Relief for Small Providers – The final rule steps back even further from its requirements that providers billing more than $10,000 under Medicare are required to comply with reporting requirements. CMS finalized that Merit-Based Incentive Payment System (MIPS)-eligible clinicians who do not exceed $30,000 of billed Part B allowed charges or 100 Part B enrolled beneficiaries are excluded from MIPS. According to CMS, this is about one-third of Medicare clinicians but only represents about 5% of Part B spending.
  • CMS also previously announced it will allow for virtual groups where up to ten clinicians could combine into one group, however, virtual groups will not be implemented during 2017
  • Pick Your Pace” – CMS also codifies its prior announcement that it will allow for a “pick your pace” approach for the first reporting year, 2017. The first year essentially now contains five options:
    1. Report a full 90-day or one-year period to maximize chances to qualify for a positive payment adjustment.
    2. Report for less than one year but more than 90 days: more than one quality measure, more than one improvement activity, or more than the required advancing care information performance category in order to avoid a negative adjustment and possibly receive a positive adjustment.
    3. Report one measure in the quality performance category, one activity in the improvement categories, or the required measures of the advancing care information performance category and avoid a negative adjustment.
    4. Participate through an Advanced Alternative Payment Model (APM) and qualify for a 5% bonus incentive payment in 2019.
    5. Don’t report anything for a hefty 4% negative adjustment.
  • Basics of MIPS and Changes for 2017 – Eligible clinicians will see either a negative, neutral, or positive payment adjustment of up to 4% under the MIPS program. CMS will also pay out bonus payments for exceptional performers between 2019 and 2024 (beginning with the 2017 reporting year). The payments are based on four categories, and CMS made some significant changes from its proposal:
    1. Quality – Full participation requires reporting on six quality measures or one specialty-specific or sub-specialty-specific measure set, five required advancing care information measures, and engage in up to four improvement activities for the highest score. For 2017, full participation is met by submitting at least one out of the six quality measures. However, higher points may be awarded for higher performance in the measure.
    2. Improvement Activity – CMS reduced the number of activities from six to up to four medium-weighted or two high-weighted improvement activities. Attesting to at least one improvement activity will be sufficient in 2017.
    3. Advancing Care – CMS reduced the number of total required measures from 11 to five. Reporting on all five would earn 50%, and reporting on the optional measures would allow for a possible higher score. CMS will also award a bonus score for improvement activities that utilize Certified Electronic Health Record Technology (CEHRT) and for reporting to public health or clinical data registries.
    4. Performance Category – Although CMS will raise the weight of this category, it will be weighted at 0% for the 2017 reporting year.
  • Advanced APMs – Clinicians who are eligible to participate through an Advanced APM are exempt from the above MIPS requirements. Additionally, the Advanced APM track is eligible for a 5% bonus payment. In order to qualify as an Advanced APM, CMS finalized that a provider must bear a risk of a potential downside of 8% of all Medicare reimbursements or 3% of the expected expenditures for which the provider is responsible under the APM. Notably, CMS retracted its proposals relating to marginal risk and medical loss ratio (MLR) for now.
  • “MIPS APMs” – CMS noted the significant criticism that many APMs will not meet the requirements to participate in Advanced APMs in 2017. For example, participants of Track 1 Medicare Shared Savings Program (MSSP) are not eligible as an Advanced APM. CMS moved forward with their proposal that these “MIPS APMs” are subject to MIPS reporting requirements, however, they will be scored using an APM scoring standard in 2017. CMS did announce it is developing an MSSP Track 1+ Model under which Accountable Care Organizations (ACOs) participating in Track 1 and new ACO participants could take more limited downside risk than Tracks 2 and 3 and still be eligible as an Advanced APM. CMS also announced it plans to reopen applications for some current APMs, such as the Medicare All-Payer Model and the Comprehensive Care for Joint Replacement (CJR) Model.

While CMS took the job of responding to industry feedback and “simplifying” the jump into the Quality Payment Program (QPP) for 2017 while moving forward with the move to QPP to an art form, the gargantuan 2,400-page final regulation is a hint of what’s to come. Reinventing the Medicare payment wheel is no simple task and will undoubtedly come with a slew of interim proposed rules as well as fixes to encountered problems during the first transitional years. This payment overhaul is only going to get more complicated, and the time to roll up those sleeves and get to work is now.



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