MACRA Final Rule Brings Optimism, Lingering Concern

October 18, 2016

Experts analyze the final rule adjusting Medicare reimbursement. Were there more positive or negative developments for small practices?

The early returns on CMS' 2,000+-page final rule for implementation of the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) are in.

Experts like many of the changes they saw from the proposed rule, but still seek more changes to ensure small practices don't get left behind. The "pick your own pace" provision, which increases the likelihood that providers will avoid a penalty in 2019 for their performance next year by simply submitting some data to adhere to MACRA guidelines, has been widely praised. So too has CMS raising the low volume requirements, giving more practices the ability to exempt out of MACRA's Merit-based Incentive Payment System (MIPS) altogether.

"[CMS] made a number of changes in an effort to make sure that small practices will not only be able to participate, but also avoid the penalty and in some cases get a bonus. We appreciated CMS raised the low-volume requirements so more small practices will be excluded and don't get penalties," says Danielle Lloyd, vice president of policy and advocacy at the Charlotte-based Premier Inc., a company that provides group purchasing organization services to providers.

Because of these changes, CMS indicated 90 percent of all MIPS eligible clinicians will receive a positive or neutral MIPS payment adjustment in the first year. Specifically, CMS says that 80 percent of small practices with one to nine physicians will receive a positive or neutral payment adjustment. In the proposed rule, CMS estimated 87 percent of small practice physicians would be penalized in 2019 for their performance in 2017.

Yet despite this short-term optimism, many were concerned over the long-term prospects of small practices in MACRA. Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said that just because it's easier in 2017 doesn't mean physicians are out of the park. "Don't lose sight of the scope, weight, and complexity of what's to come," he says. While 2017 is a unique year and gives practices a reprieve, he says, 2018 is a "must do everything" year.

Gilberg expressed disappointment with CMS continuing to implement a two-year gap between the performance and payment periods. He calls it a fundamental problem with MACRA because it doesn't give them actionable feedback until the midway point of the year between the performance year and the payment adjustment year.

"If you see a patient in January 2017, you are not going to get feedback until mid-2018 on your quality. There is nothing actionable about the information flowing back from Medicare and the physician. This makes it so this regulation still has a compliance element as opposed to an integrated feedback loop that helps move the bar on quality and cost," he says.

Blair Childs, senior vice president of public affairs at Premier Inc., says there is path that small-practice physicians can take to successfully adhere to MACRA and his colleague, Lloyd agrees. He recommends that small practices join a clinically integrated network. Not only will that ease the administrative burden, while allowing the practice to maintain independence, it will also help that practice move towards joining an Advanced Alternative Payment Model (APM).

APMs

The changes from the proposed rule to the final rule on the Advanced APM pathway was another major talking point from experts in wake of the final rule being released. APMs are a desirable path, says Lloyd, because physicians can receive a 5 percent incentive payment for participation and avoid MIPS altogether. However, in the proposed rule, few risk-based payment models qualified as Advanced APMs, meaning a very small percentage of physicians would be eligible for that pathway. Moreover, the APMs that were eligible required physicians to take on a decent amount of risk.

In the final rule, CMS made adjustments to make it so more physicians can qualify for Advanced APMs by adding more eligible risk-based models. It also created a new track (Track 1+) that would lower the risk practices would be taking in these models. Because of the creation of this track, CMS’ acting administrator, Andrew Slavitt said in a blog, CMS estimates "25 percent of eligible Medicare clinicians could be in an Advanced APM by the second year of the program."

Many, like Lloyd at Premier, are happy with these changes, but say the needle needs to be pushed even further. "We're hoping moving forward, CMS will develop even more [lowered risk-based models] … Medicare Shared Savings Program (MSSP) Track 1+ will certainly help, because right Tracks 2 and 3 of the MSSP program require a lot of risk. For Track 2, in the third year, you have 10 percent risk for your population. That's way more than nominal risk. That's significant risk. That has been a deal breaker for many of the organizations," she says.

The MGMA’s Gilberg agrees and says the "bar of nominal risk" in APMs is still too high for small practice physicians to join. He says CMS isn't taking into account the inherent risk physicians are taking by moving from a fee-for-service to a value-based payment model. "CMS kept the nominal risk standards quite high and it remains to be seen, truly in the end, how many physicians are going to move into alternative payment models."

Going Forward

One area of optimism - and somewhat annoyance - for Gilberg is that he doesn't see this as a "one shot deal." In other words, the MACRA rules will continue to evolve and there will be additional rulemaking in 2018 and beyond. In one sense, he says it gives him faith that CMS will adjust the rule accordingly to reduce the burden on practices. However, he says these adjustments make things unstable for practices on a year-to-year basis.  

"We've seen this before with Meaningful Use and Accountable Care Organizations, these rules [from CMS] come out, we learn and then CMS adjusts accordingly. That doesn't provide stability for practices and that's a problem," says Gilberg. "This is the kind of thing CMS has to stop. Instead of this yo-yo effect, the rules have to be manageable going forward so CMS doesn't have to keep pulling back. For three years they've pulled back on Meaningful Use because they've overshot on its initial complexity."