Final MACRA rule expands exemptions, flexibility

Nearly a third of physicians could be exempt from Medicare's new Merit-based Incentive Payment System under a final rule the CMS issued Friday for implementing the Medicare Access and CHIP Reauthorization Act.

The CMS also signaled it would broaden the opportunities for physicians to participate in alternative models that make them eligible for bigger rate increases and bonuses.

In April, the CMS released the proposed rule on MACRA, which replaced the old and flawed sustainable growth-rate formula for physician pay with a new method meant to shift physicians away from the fee-for-service model and onto a value-based payment system. To avoid penalties under MACRA, physicians will participate in one of two reimbursement tracks: a merit-based incentive payment system or advanced alternative payment models.

In the Merit-based Incentive Payment System, known as MIPS, physician pay will be based on success in four performance categories: quality, resource use, clinical practice improvement and “advancing care information,” which is based on the meaningful-use program the government has used to decide whether doctors should be rewarded for using electronic health records.

On the MIPS track, physicians can earn plus or minus 4% of reimbursement in 2019. The adjustment potential grows to 9% in 2022.

Physicians can opt out of the MIPS track if they participate in an alternative payment model, such as an accountable care organization or patient-centered medical home. Physicians that do choose this path can earn annual bonuses of 5%, and they will also be exempt from the MIPS reporting measures.

The agency addressed concerns about the impact on small practices by broadening its exclusion for providers who treat a low volume of Medicare patients from MIPS. The CMS will exempt physician practices with less than $30,000 in Medicare charges or fewer than 100 unique Medicare patients per year. The draft rule set the threshold at $10,000 a year.

An analysis by the American Medical Association found that about 16% of all MIPS-eligible clinicians would be exempt under the proposed version of the rule. The threshold in the final rule would exclude 30% of physicians, according to the AMA analysis.

The CMS noted that more than 93% of Medicare Part B charges would still be subject to the incentive framework, which was devised to nudge physicians toward value-based care.

Acting CMS Administrator Andy Slavitt said in conference call with reporters that the thousands of comments received on the proposed rule could be summarized as: "Make the transition to MACRA as simple and as flexible as possible."

The CMS said it would provide $100 million in technical assistance to clinicians participating in MIPS who are in small practices, rural areas and in areas with a shortage of health professionals.

The MACRA got rid of the “meaningful use” rule that the administration previously used to decide if providers should be rewarded for using electronic health records, but doctors will still be accountable for using health information technology under the “advancing care information” performance category in the rule that counts 25% towards a physician's overall score for the category, as was proposed initially.

Heeding calls for more flexibility, the CMS in the final rule said it will move away from the “all or nothing” approach previously used in EHR incentive programs. The rule reduces the total number of required measures under the category to five from 11 in the proposed rule. All other measures will be optional for reporting. Reporting on the optional measures can earn physicians bonus points toward their overall score.

In essence, the CMS is meeting providers where they are at, allowing some of the less advanced providers to transition in while also allowing the advanced ones to do more under the law and thus, earn more of a payment adjustment, said Anne Phelps, partner and US health care regulatory leader at Deloitte in Washington.

“They said we're going to not require quite as much, but the more you do, the better you score,” she said, adding that the CMS knows that technology is a tough requirement for many providers who are still struggling with meaningful use and EHRs. The CMS generally shrunk the required measures under the advanced care information component to ones that practitioners are most familiar with, she said.

“I saw that as mostly a way to provide flexibility,” said Dr. Farzad Mostashari, former national coordinator for health IT and now CEO of Aledade, which establishes and operates physician-led ACOs. The CMS is “moving to a continuum of scoring rather than all or nothing.”

Required measures include security risk analysis, e-prescribing, providing patient access, sending summary of care and requesting and accepting summary of care. The required measures must be fulfilled for a minimum of 90 days to receive credit.

The CMS said that while public comments called for the category to allow for reporting on “use cases,” such as the use of EHRs to manage referrals and consultations, it did not include such policies in the final rule. However, in 2017 the CMS will add bonus points for improvement activities that use EHRs and for reporting to a public health or clinical data registry.

“It's a return to the original intent, which was that future stages and the final stage of the health IT incentive program be about outcomes,” Mostashari said. “And it's not so much compliance with a bunch of check-the-box exercises, but using technology to achieve delivery and payment reform goals. The rule takes us a little bit closer to that vision.”

The CMS also said that eligible clinicians participating in MIPS must show that they are engaged in activities that support health care providers on the performance of certified electronic health record technology, such as cooperating with the ONC's review of the technology, and that they are not blocking data sharing.

The rule also finalizes the proposal that it will not require reporting on clinical decision support and computerized provider-order entry in physician EHRs.

“The technology component and the interoperability piece” underpins the law, Phelps said. The tech piece is more than just a reporting exercise. Without an advanced technology platform to share health data across different payment models, it's difficult to perform well in other parts of MACRA.

The final regulations also answer requests for lower minimum reporting thresholds. The agency originally wanted providers to report quality measures on 90% of their patients from all payers, and 80% of Medicare patients. Small providers argued they would have a harder time obtaining the information technology and data needed to meet that requirement. The final rule drops the Medicare threshold to 50%.

Between 592,000 and 642,000 clinicians, according to the rule, are expected to submit data for MIPS during the first performance year, which begins Jan. 1.

The final rule creates a transitional period in 2017 and 2018 that allows providers to ease into the MIPS program. Only those who don't send in any data will receive a negative payment adjustment. Providers can receive a small positive adjustment for sending a partial year of data and a slightly larger payment for sending a full year.

The CMS also said it was expanding opportunities to participate in programs that qualify as “advanced alternative payment models” under the law. Practices with a significant portion of their revenue under such a model are exempt from MIPS and qualify for larger rate increases and bonuses.

New programs that could eventually qualify for the advanced APM track include a new Accountable Care Organization Track 1+ model, Medicare Shared Savings Programs and some bundled payment models.

The agency now estimates that more than 125,000 clinicians will participate in advanced APMs for the 2018 performance year.

Slavitt said the CMS plans to develop more APMs through the CMS Innovation Center. "Ultimately, we believe that we're not looking to transform the Medicare program in 2017, we're looking to make a long-term program successful," he said.

John Feore, director at Avalere Health, said the changes in the final rule were foreshadowed by an announcement from the CMS last month that providers will be able to avoid negative payments in 2019 by submitting limited data or they can begin submitting the data later and still be eligible for a small pay increase.

“I think that kind of set the stage for providers to understand that CMS was going to be easing into it,” he said.

Practices are likely pleased with the significant burden reduction in the first year of the MIPS program outlined in the final rule, said Dr. Halee Fischer-Wright CEO of the Medical Group Management Association. She was, however, dismayed by the lack of flexibility with compliance.

She said it was disappointing that flexibility provided for quality reporting in 2017 largely disappears in 2018 and beyond. The CMS “missed an opportunity to close the two-year gap between the measurement and payment periods, which would facilitate improved patient care by providing actionable feedback to physicians and more timely incentives,” she added.

The CMS has renamed the resource use category in MIPS as simply “cost” and it will now carry zero weight in 2017. Feore said this emphasizes quality and eases concern from providers not fully convinced that resource use is an accurate reflection of effectiveness.

The number of measures that must be reported in other categories have been reduced, especially for small and rural providers.

Providers must report up to six quality measures, including one outcome measure, and must attest to having completed four improvement activities.

Danielle Lloyd, vice president of policy and advocacy at the healthcare consulting and group purchasing organization Premier, said the enhanced transitional period will build a stronger foundation for the program and is likely to reinforce and improve the general movement toward value-based payments.

“Transitioning over time to minimize disruption is key to everyone's success,” she said.

Premier is disappointed that smaller providers cannot join virtual groups that report together. It excludes some clinicians from the program entirely, Lloyd said.

She said that although the nominal risk requirement for advanced APMs was lowered, it is still too high. That is particularly true for health systems because their combined Part A and Part B revenue results in a higher dollar amount.

She said she was glad to see the CMS signaling it will likely include a shared savings program as an advanced APM and applauded the agency's vow to create more advanced APM options that will transition providers into full participation.

“By adding additional models that qualify we're hoping that more providers will join them and thus qualify for the 5% bonus,” Lloyd said.” It provides more opportunities for the providers the more models that are out there.”

Overall, providers were pleased that CMS appeared to largely heed their concerns.

“Several provisions will smooth the way for family physicians to participate in the MIPS or APMs," said John Meigs, President of the American Academy of Family Physicians.

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