MACRA, MIPS and APM: The 2017 Proposed Rule

MACRA

MACRA, Medicare Access and CHIP Reauthorization Act, was signed into law by President Barrack Obama in April of 2016, as a part of the ongoing effort to streamline healthcare and contain costs. MACRA creates two tracks for physician payment; MIPS and Advanced APMs. The program proposal was released on April 27, 2016 and the public comment period runs through August. The final rule is expected to be published no later than November 1 with an anticipated start date of January 1, 2017.

MIPS

The proposed Merit-based Incentive Payment System, MIPS, is designed to streamline the Medicare Quality Initiatives that affect reimbursement by combining three programs plus a fourth criteria into a single, score-based system: Advancing Care information (replacing PQRS), Quality (replacing Meaningful Use), Cost and Resource Reduction (replacing the Value-based Modifier program), and Clinical Practice Improvement (no reporting required).

Alternative Payment Models

The second MACRA track for physician payment is for the Alternate Payment Models (APMs) – such as Accountable Care Organizations (ACOs) and Medical Homes – to qualify as an Advanced APM.

As the authors describe in a recent Health Affairs blog on this topic, APMs must show they meet three proposed MACRA requirements to qualify as an Advanced APM:

1. Required use of certified EHRs;
2. Payment for covered professional services based on comparable quality measures; and,
3. Either being an enhanced medical home or bearing more than “nominal risk” for losses.

A key element stakeholders have been looking for CMS to define is the degree of risk an APM must bear to quality. CMS proposes a “generally applicable financial risk standard” that requires APMs to include provisions that, if actual expenditures exceed expected expenditures, CMS can withhold payment, reduce payment rates, or require the APM to incur a debt to CMS. The risk must be more than nominal, which CMS defines—in true Goldilocks fashion — as “meaningful for the entity but not excessive.”

CMS proposes that the agency will notify the public online of the APMs qualifying as Advanced APMs prior to each performance period, which will begin no later than January 1, 2017.

Additional qualifying criteria for Advanced APMs are detailed in Sections II. E. MIPS Program Details and II. F. Incentive Payments for Participating in Advanced APMs of the proposal.

Preparation and education are critical to avoiding penalties for your physicians and professionals. Simple discussions around what and how to report for CMS quality programs should take place regularly.

Determine which method of reporting works best for your hospital and work closely with a subject matter expert, such as a quality reporting vendor, who thoroughly understands the intricacies of these program requirements. Hospitals who prepare in this manner will stay ahead of the changing quality reporting curve and improve performance and patient care.