Our first thoughts on the 2,398-page MACRA final rule

Read Advisory Board's initial take on the final rule.

CMS on Friday released a final rule to implement new value-based payment programs under the Medicare Access and CHIP Reauthorization Act (MACRA).

The agency had previously unveiled a proposed rule to implement the new payment programs, which drew more than 4,000 public comments. The comments largely urged CMS to simplify requirements, maintain flexibility as providers transitioned to the programs, and ensure support for small practices.

The final rule establishes the Quality Payment Program (QPP), under which eligible professionals will choose from two quality reporting paths: the Advanced Alternative Payment Model (APM) track, for clinicians who take on a significant portfolio of APMs; and the Merit-based Incentive Payment System (MIPS), for providers who are reimbursed largely through fee-for-service.

APM track

To be eligible for the Advanced APM track and receive a 5 percent incentive payment, eligible professionals will need to receive 25 percent of their Medicare-covered services through Advanced APMs or see 20 percent of their Medicare patients through Advanced APM in 2017.

CMS said it expects the following models to qualify as advanced APMs under the program for the 2017 program year:

  • The Comprehensive End Stage Renal Disease Care Model;
  • The Comprehensive Primary Care Plus (CPC+) model;
  • The Next Generation Accountable Care Organization (ACO) Model; and
  • Medicare Shared Savings Program (MSSP) Tracks 2 and Track 3.

In addition, CMS said it expects to add the following models to qualify as advanced APMs under the program for the 2018 program year: ACO Track 1+, which has lower levels of risk than other ACOs; Advancing Cardiac Care Coordination through Episode Payment Models (Cardiac and Joint Care); and a "new voluntary bundled payment model."

CMS said the final rule will expanded providers' opportunities to participate in advanced APMs by "retrofitting existing models to qualify" for the program and creating new models. The agency said those expansions should make it easier for small provider practices to participate in QPP.

CMS estimated that between 70,000 and 120,000 clinicians in 2017 will participate in and qualify for incentive payments under the APM path.

MIPS track

MIPS will consolidate parts of three existing federal programs:

  • The Medicare Electronic Health Record (EHR) Incentive Program;
  • The Physician Quality Reporting System; and
  • The Physician Value-based Payment Modifier.

The final rule sunsets payment adjustments after 2018 for eligible professionals participating in those programs.

Under the MIPS track, eligible professionals could receive bonuses based on their performance on metrics related to cost, improvement activities, quality, and advancing care information.

Providers who choose to participate in MIPS also can select the pace at which they transition to the program. Under the final rule, providers will be able to:

  • Test the program by submitting a minimum amount of data, such as one quality measure or one improvement activity, to avoid a negative payment adjustment;
  • Submit 90 days' worth of data to earn a neutral or small positive payment adjustment; or
  • Submit data for all of 2017 to receive a "moderate" positive payment adjustment.

CMS estimated that about 500,000 clinicians will be eligible to participate in MIPS in its first year.

Providers who qualify for the program but do not participate in the APM or MIPS paths will receive a 4 percent negative payment adjustment.

Who is affected?

The new payment models will affect more than 600,000 eligible providers, according to CMS.

Eligible providers include those who annually bill Medicare for more than $30,000 or care for more than 100 Medicare beneficiaries. CMS increased the thresholds from those included in its proposed rule as a way to exempt more small practices from the requirements.

Eligible providers who will be subject to the requirements are certified registered nurse anesthetists, clinical nurses specialists, nurse practitioners, physicians, and physician assistants.

CMS said 2017 is a "transition" year for the program. Providers who are ready to begin participating in the programs can start collecting performance data on Jan. 1, 2017. Providers who are not yet prepared to participate have until Oct. 2, 2017, to begin collecting performance data. Participating providers must submit all data, regardless of when collection began, to CMS by March 31, 2018.

The first payment adjustments under the programs will take effect Jan. 1, 2019, and will incorporate 2017 data. CMS said it will continue to collect provider feedback during that time and expects "the Quality Payment Program to evolve over multiple years in order to achieve our national goals."

Final rule includes additional support for small practices

In addition to expanding the types of models that will qualify under the Advanced APM track, CMS said the final rule includes other resources intended to help small practices with MACRA, such as:

  • $20 million in annual funding for five years to help train and educate MIPS-eligible professionals in practices with no more than 15 MIPS-eligible professionals;
  • Lower minimum reporting thresholds than those included in the proposed rule; and
  • Outreach efforts that will target individual clinicians throughout the country to help them prepare for QPP.

Further, CMS on Thursday announced an initiative intended to reduce physicians' administrative burdens and improve their experiences with Medicare. The initiative will start with an 18-month nationwide pilot project intended to ease medical review for physicians participating in certain advanced APMs. CMS will monitor the pilot's progress and determine whether to expand it to additional APMs and provider types (Alonso-Zaldivar, AP/Charlotte Observer, 10/14; CMS fact sheet, 10/14; CMS executive summary, 10/14; Slavitt, CMS blog, 10/14, HHS release, 10/14; Joszt, American Journal of Managed Care, 10/14; Dickson et al., Modern Healthcare, 10/14; Leventhal, Healthcare Informatics, 10/14; Jaspen, Forbes, 10/14; National Coalition on Health Care statement, 10/14; Rappleye, Becker's Hospital Review, 10/13; Livingston, Modern Healthcare, 10/13; Frieden, MedPage Today, 10/13; Sanborn, Healthcare Finance, 10/13; CMS fact sheet, 10/13).

Advisory Board's take

Eric Cragun, Advisory Board's senior director for health policy

We're still reading through the 2,398-page MACRA final rule, so keep an eye out for a longer take in Monday's Daily Briefing on what the rule will mean for providers.

My colleagues and I will also discuss the implications of the rule in detail in webconferences on Friday, October 28, and Tuesday, November 1.

Here are our three initial big takeaways from the final rule, compared with the proposed rule.

1. Clinicians will find it far easier to comply with MIPS in 2017.

As the agency had previously previewed, the final rule includes significant flexibility for providers in the first year, to the point that most—if not all—clinicians should be able to avoid a negative payment adjustment for performance year 2017. CMS proposes three options for providers subject to MIPS in 2017, the easiest of which providers can meet by reporting a single metric. CMS has also raised the low-volume threshold, exempting more small practices from MIPS.

In addition, providers will not be scored on the resource use category in 2017 and can satisfy full-year reporting requirements by reporting for a 90-day period.

However, it's important to note that requirements will ramp up over time. CMS states, "In future years of the program, we will require longer performance periods and higher performance in order to avoid a negative MIPS payment adjustment."

2. More providers will qualify for the APM track.

The final rule should increase the number of providers who qualify for the APM track. For instance, CMS included changes to financial criteria for APM models and plans to introduce a new qualifying model—called ACO Track 1+—in 2018. Notably, however, Track 1 of the Medicare Shared Savings Program will still not qualify for the APM track.

The changes announced today coupled with changes to CMS' mandatory bundled payment initiatives, led CMS to estimate that as many as 120,000 clinicians will qualify for the APM track in 2017. And CMS estimates that by 2018, about 25 percent of eligible Medicare clinicians could be in an advanced APM.

3. CMS is showing a big commitment to reducing administrative burden.

CMS on Thursday unveiled an initiative to reexamine more broadly clinician reporting requirements in Medicare, and Friday's final rule fits with that. For instance, the agency said it will synchronize quality measures and practice-specific improvement activities in MIPS so they don't pull providers in different directions. The $100 million in funding over five years that CMS will use for technical support to small practices should also be extremely helpful for those organizations.

These moves to reduce administrative burden should shift providers' risk in the program from reporting to performance. By allowing more providers to satisfy reporting requirements, providers will only be able to differentiate themselves through their level of performance on the metrics.

We'll have plenty more analysis on the final rule in the coming days, and make sure you register for one of our upcoming MACRA webconferences.

Register now


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