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 With bipartisan support , the SGR was repealed in favor of the Medicare Access and CHIP Reauthorization Act ( MACRA ) of 2015 .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