MACRA Payment Reforms Finalized

HHS says the new payment system for Medicare clinicians provides flexible options that encourage 'pick-your-pace' participation by small practices and sole practitioners. It goes into effect in January.

The federal government on Friday finalized sweeping Medicare payment reforms for clinicians that were called for under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.

The new rules, which begin on Jan. 1, 2017, and which will take years to fully implement, replace the flawed and reviled Sustainable Growth Rate funding formula and are designed to reward quality over volume in the Medicare program that serves more than 55 million people.

MACRA Final Rule Eases Pay Changes, Initially

The 2,398-page document is the end result of an arduous process that involved a months-long nationwide listening tour by officials with the Centers for Medicare & Medicaid Services who met with nearly 100,000 people and compiled nearly 4,000 public comments.

"This is a landmark effort to move the healthcare system forward," CMS Acting Administrator Andy Slavitt said at a Friday teleconference.

"Transforming something of this size is something we focused on with great care. The policy we finalized is the result of the user-driven policy effort where our staff put down our pens and went into the field to hear from physicians and patients."

"Overall, the comments we received from across the country can be summed up this way: Make the transition to MACRA as simple and as flexible as possible," he said.

The centerpiece of MACRA is the Quality Payment Program, which creates two pathways that over the next year will let clinicians pick their own pace in the transition from a fee-for-service to payment models that reward quality over volume.

Payment Path 1: APM
The first path, called the Alternative Payment Models (APM), begins in 2019 and gives clinicians the opportunity to make more money if they're willing to take more financial risks for performance, use electronic medical records, and report quality measures to CMS.

In the first year, APM also provides a flexible performance period, so that clinicians can dive in immediately. Those who need more time can prepare for participation later in the year.

Clinicians who receive 25% of Medicare covered professional services, or 20% of Medicare patients through a fast-tracked Advanced APM in 2017 can earn a 5% Medicare incentive payment in 2019. Slavitt said that about 100,000 clinicians are expected to try this more aggressive payment model, and the hope is that more clinicians will join in the coming years as the program evolves.

Payment Path 2: MIPS
As many as 500,000 clinicians are expected to travel the second, more gradual path, called the Merit-based Incentive Payment System (MIPS). The financial incentives for accountability and the use of electronic medical records, are not as generous, but the risk is not as great. However, physicians who don't submit any data to Medicare in 2017 risk a "negative 4% payment adjustment."

Slavitt said MIPS is designed to allow physicians "to focus on patients not paperwork. We've made major steps which will continue over the coming year, but cutting the number of measures in half and simplifying how the program works."

Medicare is expected to pay about $1 billion in bonuses for high-quality care to clinicians in both Advanced APMs and MIPS in 2017, in addition to a positive payment adjustment of .5% under MACRA.

CMS estimates that 380,000 clinicians will be exempted from the new payment models because of their low volume of Medicare patients and billing.

To broaden participation to include small practices and specialties, CMS in 2018 will roll out an Accountable Care Organization Track 1+ model that provides more flexibility for clinicians. CMS is also considering reopening some existing Advanced Alternative Payment Models for application to allow more clinicians to join these types of initiatives. Slavitt said about 25% of eligible clinicians will be a part of the second path of Advanced APMs by 2018.

MACRA also provides $20 million each year for five years to train clinicians in small practices of 15 clinicians or fewer and those working in underserved areas. Beginning December 2016, local organizations will offer free, on-the-ground, specialized help to small practices using this funding.

CMS has also launched a Quality Payment Program website to explain the program and help clinicians identify the measures most meaningful to their practice or specialty.

In a conference call with reporters, Slavitt stressed that MACRA was very much a work in progress that would evolve with the practice of medicine, and with new medical technologies.

"The bottom line is we are trying to get doctors back to what they do best, care for patients, through a lot of simplification and support," Slavitt said. "We view these coming years as the first steps into a program that will continue to improve, not an attempt to create a perfect system."