Preparing for MACRA implementation

The initial excitement regarding the repeal of the sustainable growth rate (SGR) formula as a result of the passage of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) in early 2015 is now fading, and the Centers for Medicare & Medicaid Services (CMS) is beginning to plan for the implementation of new payment mechanisms established in the law. This column describes the reimbursement systems that will replace the SGR and explains what surgeons need to know to prepare for the transition.

What are the new payment mechanisms under MACRA?

MACRA creates a new Merit-based Incentive Payment System (MIPS) that will adjust physician payments up or down annually based on performance. MACRA also places new emphasis on alternative payment models (APMs) that will create a pathway for the development of physician-focused APMs. Physicians who provide a certain percent of their patient care in the APMs will be exempt from many MIPS requirements and will be offered additional incentives.

When do the new payment programs take effect?

The new MIPS payment update and incentives for APM participation will take effect in 2019. However, because of the significant lag between performance periods and payment years, physicians are likely to have their payments adjusted in 2019 based on their performance in 2017, so it is important to begin preparing early on for the changes in reimbursement policies.

How can surgeons prepare to succeed under MIPS?

To provide each physician with a composite score between one and 100, CMS will combine and streamline existing quality programs, discontinuing their associated penalties after 2018. These quality programs include the Physician Quality Reporting System (PQRS), the value-based payment modifier (VM), and the Electronic Health Record (EHR) Incentive Program. An additional category referred to as clinical practice improvement activities (CPIA) will be added to provide credit for expanding access to care, using clinical decision support tools, implementing surgical checklists, and participating in APMs and other efforts designed to improve patient care.

Because the new updates will be based largely on modified versions of existing programs, the best way to ensure success under the new program will be to make certain you are successfully participating in the PQRS, VM, and EHR Incentive Program. A number of American College of Surgeons (ACS)-developed resources are available to help Fellows become familiar with the current requirements of these programs, which are likely to be quite similar to the requirements in the MIPS program, at least in the early years.

How will payments be adjusted under MIPS?

Under the current payment policies, penalties for the PQRS, VM, and EHR Incentive Program will grow to as much as 10 percent in 2018, with very little potential for positive updates. Beginning in 2019, these penalties will be repealed. The maximum penalty under MIPS will be 4 percent, and providers will be able to achieve up to 4 percent in positive adjustments—even higher if few physicians receive high composite scores. An additional incentive payment for the highest performers will be offered in 2019–2024. In other words, under MIPS the maximum penalty will be diminished, and surgeons could experience sizable positive updates based on performance. The maximum updates and penalties will grow over time, reaching 9 percent in 2022 and beyond. The maximum penalties under MIPS never grow as high as they will have been in 2018 under existing programs.

What are the benefits of participating in an APM?

MACRA calls for the creation of new physician-focused APMs and incentivizes APM participation in a number of ways. You do not need to see patients exclusively through an Accountable Care Organization or other model to see benefits. For practices that are unable to receive a high portion of their payments through these models, participation even at very low levels may provide credit in the CPIA portion of MIPS and could lead to higher updates. Those physicians who are able to receive 25 percent of payments through a qualified APM will receive a 5 percent lump sum incentive and will be exempt from many MIPS requirements. Surgeons who try to meet this threshold but fall short may be considered partially qualifying and will be exempt from MIPS without receiving the incentive. These targets grow to 50 percent, and eventually 75 percent, of payments. Finally, starting in 2026, the law institutes small annual payment increases with updates growing faster for qualified APM participants than for those providers participating in MIPS.

Where can I learn more about APMs for surgeons?

New APMs are likely to proliferate in the coming years in response both to MACRA and to a previously announced U.S. Department of Health and Human Services goal of tying 50 percent of Medicare payments to APMs by the end of 2018. While different types of models are in development, surgical services lend themselves well to bundled payment models due to their episodic nature.

Surgeons and Bundled Payment Models: A Primer for Understanding Alternative Physician Payment Approaches is a tool published by the ACS to help surgeons learn more about APMs (see sidebar).

What is the ACS doing to facilitate participation in MIPS and APMs?

The ACS will work with CMS to ensure that the agency implements the new payment systems in a way that makes sense for how surgeons deliver quality care and that minimizes administrative burdens. In November, the College sent a detailed response to a CMS request for information on MIPS, APMs, and a new technical assistance program for small and rural practices. CMS will use this response, along with the comments from other physician societies and interested parties, to inform a proposed rule that will provide greater detail into how the programs will be administered. The proposed rule is scheduled to be released in March, at which time the College will provide further comments to help CMS refine its plans. The final rule should be published in late fall.

The College intends to work closely with CMS to ensure that options are available for the greatest number of surgeons to participate in APMs if they so choose. To this end, ACS quality and regulatory staff will be examining opportunities to create and pilot new APMs with CMS and the Center for Medicare & Medicaid Innovation. In addition, ACS staff will keep Fellows informed about the requirements of the new program as they emerge, helping Fellows succeed in the new system.

How will MACRA impact payment for global codes?

MACRA requires that, starting in 2019, CMS improve the accuracy of the valuation of global surgical services. CMS has indicated it will do this by examining and revaluing the individual components of global codes. MACRA also requires that CMS develop a process to gather information needed to value surgical services from a representative sample of physicians and requires that data collection begin by January 1, 2017. These data must include the number and level of medical visits furnished during the global period and other items and services related to the operation as appropriate. These data could be extracted from claims at the end of the global period or in another manner that CMS determines. CMS has the authority to delay up to 5 percent of payment for the services that a physician is required to provide until the required information is reported. At this point, CMS has not indicated how it plans to collect the data needed to revalue global surgical services. ACS staff will meet with CMS to provide recommendations.

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