Medicare's new plan for paying doctors: 10 key takeaways

By Eric Cragun and Rivka Friedman

CMS on Wednesday released its long-awaited proposed rule for new value-based payment programs under the Medicare Access and CHIP Reauthorization Act (MACRA).

The law will fundamentally change how Medicare pays physicians and other clinicians who participate in the program. It will establish a two-track system for Medicare reimbursement: one, called MIPS, for providers who are reimbursed largely through fee-for-service, and an alternative payment model (APM) track for physicians who take on a significant portfolio of APMs.

The Advisory Board will have much more to say on the MACRA proposal (more on that below) as we digest the 962-page rule, but here are 10 early key takeaways.

1. The rule underscores the complexity of MACRA. While CMS has made a valiant effort to keep implementation streamlined, the sheer number of elements in MACRA requires lengthy, complex rules.

2. CMS has heard the call to streamline this rule and minimize the burden on participants. Despite MACRA's complexity, it is clear that is CMS making a concerted effort to preserve simplicity and flexibility for providers. For example:

  • The MIPS quality category will require providers to report just 6 measures, fewer than required under the existing Physician Quality Reporting System (PQRS);
  • The MIPS cost category measures come from claims data, allowing CMS to calculate performance independently;
  • The EHR use category—now known as "Advancing Care Information"—moves away from an all-or-nothing approach, and promises more customizable measures; and
  • CMS defines two approaches to meeting the alternative payment models (APMs) threshold—based on either revenue at risk or number of patients attributed under risk.

3. MIPS will push medical groups of all sizes to invest in reporting and tracking performance on PQRS. MIPS requres PQRS performance accountability for groups of all sizes. Previously, reporting alone would satisfy PQRS requirements and small groups were not subject to the value-based payment modifier program. For all providers, MIPS means more accountability for PQRS performance than they've had in the past.

4. CMS set a high bar on requirements for APM track. Under the agency's criteria for payment models to be eligible for the APM track—which CMS calls "Advanced APMs"—the Bundled Payments for Care Improvement (BPCI) Initiative, the Comprehensive Care for Joint Replacement (CJR) Model, and Track 1 of the Medicare Shared Savings Program (MSSP) all will not qualify.

Meanwhile, MSSP Tracks 2 and 3, Next Generation, and Pioneer—which all require downside risk—will qualify.

Less surprisingly, CMS confirmed that only Part B (traditional) Medicare payments will count toward the Advanced APM threshold. Payments from Medicare Advantage plans can count toward the "Other Payer" threshold beginning in 2021, but only if those payments are made through models that meet Advanced APM requirements. Notably, the rule does not address whether CMS will allow Track 1 ACOs to switch MSSP tracks mid-participation agreement to join an Advanced APM.

5. CMS expects most eligible clinicians to be in MIPS. Because of the high bar set to qualify for the APM track, CMS projects that only 30,000 to 90,000 clinicians will be in the track. An estimated 687,000 to 746,000 physicians will be in MIPS.

6. Most clinicians qualifying for the APM track will do so as a group: CMS proposes to determine qualification for the APM track at the entity level for all clinicians who are on the APM participant list for that APM.

7. The proposed rule reflects a belief and expectation that medical home models have potential to drive significant value for Medicare. The rule includes strong MIPS rewards for providers participating in medical home models through the Clinical Practice Improvement category. CMS also proposes creating a special pathway by which medical home models, including the Comprehensive Primary Care Plus (CPC+) program, can qualify as advanced APMs.

8. Providers must decide whether to submit MIPS data before they know if they will qualify for APM track. CMS will not notify providers about their status for the APM track until after the MIPS performance period. For example, CMS will notify entities of 2017 APM status in mid-2018 for adjustments to be made in 2019. Thus, if entities aren't confident they will qualify for APM track, it seems as though they will need to report under MIPS in 2017 in case they don't qualify. 

9. Performance periods are rapidly approaching: As with other payment initiatives, CMS would base payment adjustments for both MIPS and APM tracks on performance periods two calendar years prior to the adjustment. That means—in both tracks—performance in 2017 will determine payments for 2019.

10. The rule's complexity (and its high stakes) are likely to elicit concern and comments from various stakeholders. Finalizing these regulations in time for performance periods to begin in 2017 poses a monumental task. It helps that the quality and resource use measures in MIPS have largely been around for a few years (through PQRS and VBPM). But MIPS will involve more providers than previous programs, and providers will have to make decisions about APM participation before the final rule is set. Stakeholders facing payment changes and uncertainty about those changes are likely to want their perspectives heard. Depending on how CMS addresses those difficulties, much could change between this proposal and the final implementation.

Next steps for CMS

CMS is accepting public comments on the proposal for the next 60 days, and some stakeholders are already weighing in.

For instance, the American Hospital Association says it is "deeply disappointed by the CMS' narrow definition of [APMs]." On the other hand, American Medical Association (AMA) President Steven Stack in a statement says AMA's "initial review suggests that CMS has been listening to physicians' concerns." He adds, "In particular, it appears that CMS has made significant improvements by recasting the EHR meaningful use program and by reducing quality reporting burdens."

Stay tuned

The Advisory Board will have more information on the proposed rule from a variety of perspectives, both in the Daily Briefing and on our blogs. In particular:

  • IT stakeholders should subscribe to our "IT Forefront" blog for specific details on how the rule would affect health IT;
  • Hospital and health system members should subscribe to our "At the Helm" blog for details on how the rule would affect hospital and health system strategy; and
  • Medical group members should subscribe to our "Practice Notes" blog for details on how the rule would affect their organizations.

Executive Research Briefing

Five Steps to Build the Advanced Medical Home

Next in the Daily Briefing

RWJF: The states least prepared for public health emergencies

Read now