Author: Emil Engels, MD, MBA, CPC
‘If you’re not confused, you’re not paying attention.’
—Tom Peters, writer and expert in business management
For years, physicians pressured Congress to repeal the flawed Sustainable Growth Rate (SGR) formula. It adjusted physician reimbursement based on changes in Gross Domestic Product. Over time, the formula led to draconian cuts in payments to doctors. Invariably, after intense lobbying efforts by individuals and organizations, Congress would pass a “patch” that would fix the problem temporarily. After years of stopgap measures, Congress finally repealed the SGR formula with a law entitled the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
In addition to repealing the SGR formula, MACRA continued the Centers for Medicare & Medicaid Services (CMS) shift away from fee-for-service toward paying for quality. In January 2015, Sylvia M. Burwell, secretary of Health and Human Services, stated: “Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018.”
With the passage of MACRA, the shift from fee-for-service to paying for quality and value will be accelerated. This law and its associated regulations will change the health care landscape in America dramatically, yet we are just now starting to understand its effect. The 100-page law was passed on April 16, 2015. The framework for change was in place, but the 900 pages of proposed regulations released on April 27, 2016 provided further detail. Health care reform continues to proceed at breakneck speed—the proposed reporting period begins Jan. 1, 2017!
In this first part of a two-part article, the author summarizes the major implications of the new law and how it will affect anesthesia providers. Please note: The final version of regulations will be released in the fall of 2016, so it is possible that the information in this article may need to be amended.
MACRA and the Quality Payment Program
MACRA pays clinicians for delivering value and high-quality care in a unified framework called the “Quality Payment Program.” Providers can choose to participate through one of two pathways: the Merit-based Incentive Payment System (MIPS) or advanced Alternative Payment Models (APMs). The overwhelming majority of anesthesia providers will not be eligible for the APM pathway, so this first article will focus on MIPS participation.
The Financial Effect
MACRA includes a 0.5% upward adjustment to the Medicare conversion factor for the first five years. Then the conversion factor will be flat (0% increase) for the next five years. From year 11 onward, providers will receive either a 0.25% increase (MIPS) or 0.75% increase (APMs), depending on the pathway chosen.
Similar to other government quality programs, providers are rewarded or penalized based on performance. In the MIPS pathway, penalties begin at –4% of Medicare reimbursement and escalate to –9%! The incentives also range from 4% to 9%. The losers pay for the winners and the program must be budget neutral, as with the value-based modifier. However, the law includes an additional $500 million that is exempt from budget neutrality and can be awarded for exceptional performance in the first five years.
Those able to participate in APMs will receive a 5% incentive per year. Keep in mind that a participant in an APM must assume financial risk, so losses are possible also.
The question you should be asking yourself is not “should I participate?” but rather “can I afford not to participate?”
Who Should Participate in MIPS? Who Is Exempt?
MIPS applies to all Medicare Part B physicians, physician assistants, nurse practitioners and certified registered nurse anesthetists. However, CMS proposed criteria to exempt certain practitioners. Of note, you are exempt if you are newly enrolled in Medicare, have less than or equal to $10,000 in Medicare charges and less than or equal to 100 Medicare patients, or participate in an APM. CMS estimates that 15,000 anesthesiologists may be exempt from MIPS—a ray of sunshine in this storm of change!
What Is MIPS and How Is My Score Calculated?
Currently, Medicare measures quality and cost for clinicians using a patchwork of programs, including the Value-based Modifier (VM), the Physician Quality Reporting System (PQRS) and Meaningful Use. These programs are streamlined and combined into one new system under MIPS.
It has four components: quality, advancing care information (formerly Meaningful Use), clinical practice improvement activities and cost (or resource use). Providers will be scored in each of the four categories, and then these scores will be weighted and combined to produce a composite score. The weight of each category changes over time. Initially, quality makes up 50% of a provider’s score, while cost contributes only 10%. By year 3, the relative weight of quality decreases to 30%, and cost increases to 30% of the composite score.
The scores of all providers will be compiled and analyzed, and a threshold created. Those who score below the threshold are penalized, and those who score above it receive an incentive. The threshold is likely to change over time, as CMS will calculate it by looking at the previous two years of data.
What Is the Reporting Period?
The reporting period is the calendar year, and the proposed start date is Jan. 1, 2017. However, while testifying before the Senate Finance Committee, CMS Acting Administrator Andy Slavitt told lawmakers that the agency is considering delaying the start date for MACRA. Please check the implementation date in the final rule, since many commenters advocated delaying the start of the program as well.
… And the Quality Category?
The quality category replaces the PQRS and the quality component of the VM program. Clinicians report six measures, versus the nine measures currently required under PQRS. One of the measures must be an outcome measure, and one must be a cross-cutting measure. Anesthesia providers may be exempt from reporting a cross-cutting measure if they are deemed “non-patient facing.” This term is discussed in more detail below.
The proposal strives to align with the private sector by including the core quality measures that private payors already use for their clinicians. Providers can continue to report quality measures using existing mechanisms, including claims, electronic health records (EHR), qualified registry and qualified clinical data registry (QCDR). In addition to the data that providers submit, CMS will calculate population measures from claims data.
It is worth noting that the MACRA-proposed rule changes the requirements for registry reporting in 2017. Those who use qualified registries will need to report measures on all patients (and not just Medicare patients). In addition, the proposed rule requires reporting on 90% of patients if reporting via a QCDR or qualified registry (80% if reporting via claims)!
What Is the Advancing Care Information Category?
The Advancing Care Information category (formerly Meaningful Use) would account for 25% of the MIPS score in the first year. Clinicians must use certified EHR technology and would have flexibility in choosing measures to report. The program emphasizes interoperability and information exchange and no longer is all-or-nothing—a score is assigned based on performance.
As most of you know, anesthesiologists (as determined by your provider type in the Provider Enrollment, Chain, and Ownership System [PECOS]) are automatically exempt from the current Meaningful Use program. Under the new rule “non-patient facing” specialties may be excluded from the requirement to participate in the Advancing Care Information category. Therefore, the definition of non-patient facing is crucial. CMS states in the rule, “We intend to publish the proposed list of patient-facing encounter codes on a CMS website similar to the way we currently publish the list of face-to-face encounter codes for PQRS.” If a provider reports 25 or more codes on the list during the reporting year, then he/she would be deemed patient-facing.
Another way that anesthesiologists could be exempt is if they are deemed “hospital-based.” Hospital-based MIPS-eligible clinicians are defined as providers who furnish 90% or more of their covered professional services in sites of service identified as an inpatient hospital. It will be very important to read the final rule to determine how anesthesiologists will be treated in this category.
What Is the Clinical Practice Improvement Activities (CPIA) Category?
These activities, as the name implies, include initiatives to improve one’s practice and the patient experience. Activities can be categorized as expanded practice access, population management, care coordination, beneficiary engagement or patient safety. The proposed rule lists 90 activities in Appendix H that fulfill the requirement. Clinicians must report on three high-weighted activities or six medium-weighted activities for a 100% score. However, non–patient-facing physicians only need to report on two measures (either high or medium) to receive a 100% score. Being classified as non-patient facing would once again benefit anesthesia providers.
Maintenance of Certification Part IV qualifies for credit. In addition, use of a QCDR is included in numerous approved activities. Participation in the Perioperative Surgical Home simulation or High Reliability Organization initiatives may qualify as CPIA.
What Is the Cost (or Resource Use) Category?
CMS determines cost administratively by analyzing claims, and no action is necessary by the provider. Patients are allocated to providers using an attribution process that is based on who provides the plurality of care. CMS will use 40 episode-specific measures to account for differences among specialties. Like with the VM program, how patients are attributed is once again critical.
MACRA continues two measures from the VM program: total costs per capita for all attributed beneficiaries and Medicare spending per beneficiaries. CMS proposes to average the scores of all the resource use measures attributed to the MIPS-eligible clinician. If a clinician does not have sufficient patient volume for any cost measures, then a score would not be calculated.
Anesthesia providers may not have attributed beneficiaries to calculate cost. CMS is still determining how to re-weight the other categories, and the final rule should answer this question.
The MACRA accelerates the shift by CMS from paying for volume to paying for value. Anesthesia providers need to focus on how to participate to avoid being penalized.
Specifically, clinicians reading this article should decide how they intend to meet the new quality requirements, which include reporting six measures on as many as 90% of your patients.
Providers also need to think about which outcome measure and cross-cutting measure to include. In addition, MIPS-eligible professionals should consider clinical practice improvement activities to undertake to meet the requirement. Finally, please watch for the release of the final rule, as topics like quality reporting requirements or the definition of non–patient-facing clinicians could possibly change.