MACRA Fundamentals for Anesthesiologists

One of the biggest takeaways from the ASA Practice Management Conference held in San Diego on January 29-31 was the need for anesthesiologists to start thinking about what the Medicare and CHIP Reauthorization Act of 2015 (MACRA) will mean for their practices.

Physicians are already benefiting from the MACRA provisions that repealed the Sustainable Growth Rate (SGR) formula that would have driven Medicare payments down dramatically had Congress not overridden it every year.  Instead of a 27 percent SGR cut that would have been implemented on April 15, 2015 absent the legislation, payments increased by 0.5 percent on July 1st.  They were to increase again by 0.5 percent on January 1st of this year but adjustments for budget neutrality and a target reduction for allegedly misvalued codes in each of the next three years caused them to decrease by 0.2 percent. 

Beyond 2016, MACRA provides for 0.5-percent conversion factor increases in 2017-2019 and for 0 percent increases in 2020-2025.  And beyond replacing the SGR with set percentage increases for a decade, MACRA will move professionals farther along the volume-to-value trajectory through payment adjustments for participation in either of two new programs:  the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).

MIPS

The MIPS will simplify and streamline Medicare's current quality reporting programs into a single payment-adjustment system beginning in 2019.  The Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VM) and the Meaningful Use (MU) program will all end in 2018.  Physicians and other Eligible Professionals (EPs) will be evaluated through a Composite Performance Score (0-100 points) based on the four components in Figure 1 below:

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Source:  CMS, The Medicare Access & CHIP Reauthorization Act of 2015: Path to Value

Initially, in 2019, the EP’s MIPS Composite Performance Score will be weighted on the four components in the proportions shown in the first column in Table 1 below.  By 2021, the proportions will shift:

Table 1. Components of the Composite Performance Score

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The first three components are familiar.  Some of the measures of “quality” will come from the PQRS and from Qualified Clinical Data Registries (QCDRs).  New measures will build upon various sources including those for inpatient hospitals.  “Resource Use” will require CMS to develop applicable cost measures and methods for attributing patients to different providers.  (CMS does not currently have any way of attributing costs to anesthesiologists.  As Stanley W. Stead, M.D., M.B.A. wrote in MACRA Strategy: Quality Reporting and Contribution to Savings in the July 2015 ASA Newsletter, “In cases where an EP cannot participate in a category, the law is unclear.”) CMS will develop a new definition of “Meaningful Use” of electronic health records.  “Clinical Practice Improvement Activities” are a brand-new category that encompasses communication and patient safety measures such as:

• Expanded practice access, such as same day appointments for urgent needs and after hours access to clinician advice
• Population management, such as monitoring health conditions of individuals to provide timely healthcare interventions or participation in a qualified clinical data registry
• Care coordination, such as timely communication of test results, timely exchange of clinical information to patients and other providers, and use of remote monitoring or telehealth
• Beneficiary engagement, such as the establishment of care plans for individuals with complex care needs, beneficiary self-management assessment and training and using shared decision-making mechanisms
• Patient safety and practice assessment, such as through use of clinical or surgical checklists and practice assessments related to maintaining certification
• Participation in an alternative payment model 

Source:  CMS MLN Connects, Quality Reporting Programs under the 2016 Medicare Physician Fee Schedule Proposed Rule

EPs’ composite scores will be compared to a performance threshold that will be set each year based on the mean or median of the MIPS scores for all EPs in a prior period as selected by CMS.  Composite scores below the performance threshold will incur MIPS penalties and those above the threshold will generate variable bonuses, on a sliding scale, up to the maximums in Table 2:

Table 2.  Maximum Positive and Negative MIPS Adjustments as a
Percentage of Medicare Payments

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Source:  American Medical Association, Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), H.R. 2, Pub. Law 114-10

Depending on individual performance, the adjustment may also be neutral.  The dollar amounts of the upward adjustment will not be determined until CMS analyzes MIPS performance across all EPs, because by law the MIPS program must be budget neutral, with the losers paying for the winners’ gains—think Hunger Games.  Bonuses could go even higher, up to three times the maximum penalty levels, but the total of the bonuses and penalties must essentially balance one another.

MACRA provides additional funding for separate bonuses of up to 10 percent for exceptional performance, up to $500 million per year, from 2019 through 2024.  So even if all physicians score above the threshold, some will still receive incentive payments.  Beginning in 2026, all EPs participating in MIPS will be eligible for a 0.25 percent increase in annual payments.

Readers who want to estimate their own MIPS payments may download the Merit-Based Incentive Payment System Calculator from SA Ignite.

There are three groups of physicians and practitioners who will not be subject to MIPS:

• Those in their first year of Medicare participation;
• Those whose volume of Medicare patients is below the threshold, and
• Participants in eligible APMs who qualify for the bonus payment.

APMs

The last type of Clinical Practice Improvement Activities on which MIPS scores will be based is “Participation in an alternative payment model.”  EPs who receive a “significant portion” (Table 3) of their Medicare payments through an eligible APM entity, however, will be totally exempt from the MIPS requirements and will be “qualifying APM participants” (QPs).  QPs will receive a five percent bonus in each of the five years between 2019 and 2024.  From 2026 onward, they will be eligible for 0.75 percent increase in their annual Medicare payments—half a percent more than EPs who merely satisfy MIPS.  CMS is clearly trying to encourage physicians to participate in developing new payment models that produce reductions in costs.

Table 3.  “Significant portion” of Medicare payments required to qualify for APM bonus

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MACRA identifies the following CMS programs as sources of eligible APM entities:

• CMS Innovation Center (CMMI) model (other than a Health Care Innovation Award)
• MSSP (Medicare Shared Savings Program), e.g., Accountable Care Organizations (ACOs)
• Demonstration under the Health Care Quality Demonstration Program, e.g., Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program
• Demonstration “required by Federal Law”

To be an eligible APM, the above Medicare programs and any others that are to be approved must meet the following criteria:

• Base payment on quality measures comparable to those in MIPS, and
• Require use of certified EHR technology, and
• Either (1) bear more than nominal financial risk for monetary losses or (2) be a medical home model expanded under CMMI authority.

Not much more is known about how APMs will be approved or how they will operate.  CMS is expected to issue a proposed rule on the implementation of the APM and MIPS programs in March or April.  There will then be a 60- or 90-day period for public comments to be submitted to CMS.  CMS will consider the comments and then, late this year, publish a final rule with details of the MIPS measures and APM criteria.  The first MIPS performance year, on which the 2019 adjustment will be based, will be 2017. The first measurement period for assessing whether EPs are QPs will be 2018 and the first incentive payments will be made in 2019.  “ASA believes that a [Perioperative Surgical Home] is well positioned to become an APM,” Dr. Stead stated.  We agree, and we will continue to share what we learn with our readers.