Inpatient Facility Coding & Compliance Alert

AMA wants the implementation to be postponed to July 2017.

Get ready for transition to the new MACRA (Medicare Access and CHIP reauthorization Act) framework. On April 27, CMS disseminated the proposed rules for implementation of the MACRA. The comment period ended this June. How have the hospitals reacted to the provisions?

“I think at this point everyone is trying to figure out just what MACRA really means in general and then specifically within certain specialties and group practices,” says Duane C. Abbey, PhD, president of Abbey and Abbey Consultants Inc., in Ames, IA. “The main focus of concern is on the processes that will be involved with this program, that is, reporting and then any payment shifts.”

With the Final Rule expected in Fall 2016, it’s time now to get ready with your action plan. Here is what the MACRA ruling has in store for you.

Background: MACRA is all about an overhaul of existing programs on physician payment, rolling out a Merit Based Incentive Payment System (MIPS), and Alternative Payment Models (APM). Currently, there are three existing quality incentive programs including:

• Physician Quality Reporting System (PQRS) 
• EHR Meaningful Use
• Value-Based Modifier

Starting in 2019, these will become one single program to ease reporting and reduce paperwork. So, get ready for adjustment in your future payments based on your performance in areas of quality, EHR meaningful use, resource use, and clinical practice enhancement endeavors.

The winds of change: Would this be a change for the better? Experts aren’t sure.

“Given the increase in the bureaucracy and the cost of having physicians report all this information, the increased costs to the health care system overall is significant,” explains Abbey. “If these new mechanisms do constrain the costs to Medicare, then there is justification. However, if this is just a shell gain (i.e., shifting existing payment levels from one group to another), then this whole process is questionable.”

MACRA: A bird’s eye view

MACRA emerged as a solution to repeal the sustainable growth rate (SGR) formula, when the Congress advised CMS to bring about a major change of existing payment and quality programs.

MACRA would bring about the transition to a more quality and value-driven Medicare program within a five-year transition period. During this period, CMS provides step by step payment updates to the providers. 

Once MACRA gets fully implemented, it will replace existing programs, such as meaningful use requirements, Value-based Payment Modifier, EHR Incentive Program, and the PQRS.

Why it matters: Be careful on how you perform on Medicare’s quality measures and standards in 2017, as this will impact your payments in 2019.

What It Means to Your Bottom Line

MACRA would entail a five-year transition period, leading to a better quality and value based Medicare program.

“There is a larger picture that needs to be further investigated,” comments Abbey. “MACRA is to replace the SGR that was used to determine the increases in payments to physicians. The basic idea was that Medicare did not want overall expenditures to increase too fast or too much so that a formula was put into place.”

To this effect, the proposed rule has strict requirements for basically two types of payment models:

1) Merit-Based Incentive Payment System (MIPS)

MIPS will replace the current reporting systems. It will apply upward or downward reimbursement adjustments based on performance in four categories:

• Quality
• Advancing care information (electronic health records)
• Clinical performance improvement activities
• Resource use.

2) Alternative Payment Model (APM)

Physicians may want to avoid the MIPS penalties and opt for getting a lump-sum incentive by participating in the Alternative Payment Models (APMs). They would still need to adhere to stringent quality standards and also fulfil risk-sharing requirements. APMs are most appropriate for larger systems, and focus on care coordination, as well as sharing of financial risk.

Moreover, given the complexities of establishing an APM, this option would be impractical in the first year for many smaller practices and solo practitioners.

“The shifting of payments is based on a relative scale as opposed to a fixed scale,” reflects Abbey. “In other words, a physician or group of physicians may be doing a fine job but there is another physician or group of physicians that scores higher so that the first physician or group will lose payments while the second group gains payment. In other words, physicians are going to be aiming at a moving target relative to their reporting of quality.”

Do You Fall in the MIPS Exclusion Criteria?

CMS has created a low volume cut-off threshold, below which you will be excluded from MIPS. According to the proposed rule, if you see less than 100 Medicare Part B eligible patients and bill less than $10,000 to Medicare every year, you do not need to participate in MIPS. Apart from this, new Medicare participants and those who opt for APMs all would be exempt from MIPS.

Explore the Comments from Major Associations

“MACRA is complicated and the details of exactly how it will work are not fully known,” contemplates Abbey. Therefore, important organizations, such as the American Hospital Association (AHA), the Healthcare Information and Management Systems Society (HIMSS), and many others have shared their concerns about the proposed rule during the open comment period.

The AHA’s take: According to the AHA, it is concerned about the lack of a provision to offer financial incentives to providers investing in technology to meet the requisites of implementation. What’s more, the AHA feels that hospital based physicians should be able to utilize their pay-for-performance program and hospital quality reporting to measure performance in MIPS, and align the EHR incentive program changes for providers with those of eligible hospitals.

Further, it also stresses the need for modification of fraud and abuse laws to permit a “legal safe zone” where sharing of information is safe for providers and hospitals.

The HIMSS stand: In their June 27 letter to CMS, HIMSS asked for the following provisions:

• Change the reporting period for the advancing care information to 90 days.
• Ease the complexity of quality reporting.
• Work closely with the office of national coordinator for health IT to reduce duplication in health information exchange.

The AMA’s opinion: The AMA believes there should be:

• A transitional reporting period for the first year, beginning July 1, 2017, instead of January 1, as proposed now.
• The four components of MIPS aligned as a single program.
• “More opportunities for partial credit and fewer required measures within MIPS.”
• Simplification of APMs to lower the associated financial risk.
• Provision of an interim final regulation, wherein further refinement and changes are possible by maintain open dialogue.

“A shift in implementation would certainly be most welcome,” agrees Abbey. “The ability of physicians to be ready to properly report starting January 1 is, at best, problematic. July 1 would give a little leeway.”

Final takeaway: Your best bet is to start planning your 2017 strategies right now, rather than waiting for the final rule. Although the final rule is expected in Fall 2016, it will be a herculean task for CMS to read and weigh the umpteen comments while crafting the final rule.

“About the only thing physicians, groups of physicians, and hospitals – particularly those that employ physicians or have provider-based clinics – can do is to study and master what CMS is proposing to do particularly relative to process and procedures for reporting,” advises Abbey. The presidential elections may also have an effect on the rule’s timeline and may push the release date further. “We will probably not have the final rule until on or about November 1,” Abbey predicts. “Thus, we must prepare now based on the proposed rule.”