MACRA, MIPS, APM: A Closer Look

Author: Peyman Zand, Partner, Strategic Services Executive

MACRA: A Closer Look

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was signed into law on April 16, 2015, establishing new methods of payment to clinicians caring for Medicare patients. This is part of the ongoing shift in healthcare to Value Based Care. MACRA leverages certified Electronic Health Record (EHR) systems to track and measure the Advancing Care Information category under the Quality Payment Program. According to The Centers for Medicare & Medicaid Services (CMS) Acting Administrator, Mr. Andy Slavitt, “The Advancing Care Information category will modernize, streamline and replace the Medicare EHR Incentive Program for eligible professionals (also known as ‘Meaningful Use’).” He added, “The Quality Payment Program advances the use of certified EHRs and health IT as tools to improve the flow of health information among clinicians and, ultimately, improve the quality of care provided to patients.”

The Quality Payment Program has two payment options for clinicians. The first and the most popular is the Merit-based Incentive Payment System (MIPS), moreover the one that best coincides with Value Based Care is called Alternate Payment Models (APMs). CMS will require use of certified EHR technology to exchange information with the provider community, as well as with patients to validate improved care delivery, including patient engagement and care coordination.

What the ONC Says

The Office of the National Coordinator (ONC) for Health IT is considering certifying EHR systems and requiring companies unable to certify to pull noncompliant products. If the ONC decertified a product, the developer would be required to notify affected customers and providers. The ONC would also issue a cease-and-desist notice to prevent the future sale or marketing of the product. This mandate is currently being disputed, due to the potential hardship many physician organizations and EHR vendors would experience.


MACRA: A Closer Look

All clinicians, which includes physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists who bill more than $30,000 in Medicare a year or provide care for at least 100 patients, are subject to MACRA’s Merit-Based Incentive Payment System (MIPS) beginning January 1. MIPS has four components:

1. Quality
2. Resource Use
3. Clinical Practice Improvement Activities
4. Advancing Care Information

Each component receives a weighted score that is totaled to create a composite performance score. This score determines provider reimbursements and incentives. CMS intends to make this transition as smooth as possible. Under the final rule, providers can opt-out by choosing to not send CMS data in 2017, resulting in an automatic 4% payment reduction in 2019. However, if providers submit data for just one quality measure or improvement activity, they can avoid this penalty. CMS will allow some third party vendors to submit data on behalf of clinicians, as a way to lessen their burden and avoid the 4% penalty.


APM: A Closer Look

Alternative Payment Method (APM) is the true shift from Fee-for-Service to Value Based Care, whereby clinicians or organizations must meet the following criteria:

1. Practitioners must take on some level of financial risk. The final ruling calls for a minimum loss ratio no greater than 4% of expected expenditures or total potential risk of at least 4%.
2. Payments must be calculated using evidence-based quality measures that are reliable and valid.
3. At least 50% of participants must use certified Electronic Health Record (EHR) technology to document and communicate clinical care information in the first performance year (this increases to 75% participation in the second performance year).

To qualify as an APM, participants must meet the following revenue targets:
»» By 2019-20 participants must have 25% of Medicare payments from an advance APM model. This increases to 50% in 2021-2022 and 75% in 2023 and beyond.
»» Participants can partially qualify for APM by hitting 20% in 2019-20, 40% in 2021-22, and 50% in 2023 and beyond. Being partially qualified exempts participants from some of the MIPS requirements.