MACRA Marks New Start for Medicare Payment of Physicians

The American health care system is moving from paying physicians for the volume of services they perform to paying for the value of the care they provide. This movement toward “value-based payment” began more than 20 years ago, but in recent years it has gathered momentum with a proliferation of value-based payment programs in both the public and private sectors. These changes encompass dramatic reforms in the way physicians participating in Medicare and Medicaid will be paid and the emergence of a variety of new models of care by which physicians can organize themselves to deliver value-based care.

The movement has greatly accelerated since the passage of the Affordable Care Act, but it has also been driven by technological change—especially the growth of electronic health records (EHRs) and payer incentive programs to encourage proliferation of EHRs. The goal of this evolution is summed up in the so-called Triple Aim: better patient experience of care, better population health, and lower per capita cost of health care.

In the first of a series of articles in “Changing Practice/Changing Payment,” Psychiatric News focuses on the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which encompasses important changes in how physicians will be paid under the Medicare program and how they may need to change their practices to take advantage of the incentives offered by MACRA.

Q:What is MACRA, and why is it important?

A: The enactment of MACRA represents a major turning point in Medicare payment policy and quality programs, which could have a significant impact on thousands of psychiatrists. Over 23,000 psychiatrists provided services to Medicare patients in 2013. Several MACRA provisions also impact Medicaid, other federal programs, and potentially even some private payers.

MACRA makes three important changes to how Medicare pays participating physicians:

• Ending the sustainable growth rate (SGR) component of the payment formula for determining Medicare payments that had triggered steep cuts in payments for physician services for over a decade. In recent years, the level of SGR cuts reached over 20 percent.

• Creating a new framework for rewarding health care providers for improving the delivery and value of care through alternative payment models (APMs).

• Combining existing quality reporting programs into one new system called the Merit-Based Incentive Payment System (MIPS).

Q: How will MACRA affect physician payment most immediately?

A: MACRA permanently repealed the Medicare SGR formula and replaced it with stable annual payment updates. Under MACRA, the rates for physician services will increase each year by 0.5 percent through 2019; by 0 percent from 2020 through 2025; and then beginning with 2026, by 0.75 percent for physicians in eligible APMs and 0.25 percent for all others.

Q: What about quality reporting requirements under MACRA?

A: In 2019 a new quality reporting program, the Merit-Based Incentive Payment System (MIPS), will combine parts of the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier, and the Medicare Meaningful Use Electronic Health Record Incentive Program into one single program based on quality, resource use, clinical practice improvement, and meaningful use of electronic health records.

MIPS performance assessment is designed to be more flexible than under current programs, with performance thresholds based on the average performance of one’s peers. Psychiatrists who successfully report under MIPS can earn bonuses of up to 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent starting in 2022. From 2019 to 2024, there is an extra bonus of up to 10 percent for exceptional quality.

Further details about MIPS will appear in another installment of this series.

Q: What are APMs, and how do they fit into MACRA?

A: MACRA also provides substantial incentives for participating in APMs. Physicians with sufficient revenue (or patients) tied to “eligible” APMs can earn a 5 percent bonus from 2019 to 2024 and do not have to report under MIPS. Examples of APMs include accountable care organizations (ACOs), patient-centered medical homes, and bundled payment arrangements (under such arrangements, multidisciplinary physicians participating in the collaborative care of a patient population are paid a lump, bundled sum). The new Physician Technical Advisory Committee will review physician APM proposals, and technical assistance funds can assist small practices in transitioning to APMs.

Further details about APMs will appear in another installment of this series.

Q: What other MACRA provisions are important to my practice and to my patients?

A: Additional MACRA provisions allow psychiatrists to opt-out of Medicare (and engage in private contracting) indefinitely and allow the collection of up to 100 percent of Medicare payments for overdue federal taxes. Importantly, standards for quality reporting programs may not be used as a legal “standard of care” in medical liability cases.

Part B and D premiums will rise for high-income Medicare beneficiaries, and Medigap plans may no longer cover Part B deductibles. The law also made permanent the “qualifying individual” program assisting beneficiaries slightly above poverty level with Medicare Part B premiums and “transitional medical assistance” that continues Medicaid coverage as low-income families transition from unemployment to working.

MACRA also extended funding for the Teaching Health Center Graduate Education Payment Program (supporting community-based residency training in psychiatry and other specialties), community health centers, the Children’s Health Insurance Program (CHIP), Medicare-dependent hospital program, Medicare Advantage special needs plans, and other programs.

Q: What do I need to do to comply with MACRA and take advantage of incentives?

A: Starting in 2019, all Medicare payments to psychiatrists will include a MIPS adjustment unless psychiatrists have just enrolled in Medicare that year, had a “low volume” of Medicare patients or claims, or qualified for the MACRA/APM bonus. Psychiatrists can also form “virtual” groups with other physicians for the purposes of reporting.

The best way for psychiatrists to prepare for MIPS is to start participating in the Physician Quality Reporting System and Meaningful Use program this year or be prepared to do so in 2017, the first MIPS reporting period. The APA website has detailed instructions to help you participate in PQRS and Meaningful Use. APA will be adding MIPS resources as the process is further fleshed out.

Reporting quality measures through participation in a registry using an EHR system that meets Meaningful Use standards is the best option for successful MACRA/MIPS reporting and participation. APA has begun preliminary steps toward creation of a registry.

In the meantime, MIPS reporting may require adding extra resources (staff and EHR capabilities). All practices should do a cost-benefit analysis of what works best for them.

Q: What is APA doing to help me and other members adjust to these changes?

A: On April 27, the Centers for Medicare and Medicaid Services (CMS) released the first proposed rule to implement MACRA. The 962-page proposed rule is posted here. A brief summary is available here, and a second CMS fact sheet with multiple links to additional information is located here. APA is closely reviewing the proposed rule and will submit comments to CMS ahead of the June 27 comment deadline, with the goal of maximizing psychiatrists’ ability to successfully participate in Medicare and deliver high-quality care to their patients.

APA will offer significant MACRA education to its members through multiple communication channels and resources. The APA leadership and administration are engaging with relevant APA councils and other components to educate thought leaders and begin dialogues to inform APA advocacy, particularly identifying issues and features of MACRA in which the association can add value for psychiatry. APA’s Department of Reimbursement Policy is stepping up APA advocacy on MACRA and MIPS, particularly with respect to the expected proposed rules.

Importantly, the Board of Trustees has approved initial steps toward creating a registry in which APA members can participate to streamline MIPS reporting and significantly decrease the collective administrative burden of the current individual programs. Also, APA was one of just 39 organizations chosen to participate in the CMS Transforming Clinical Practice Initiative, which will help connect psychiatrists with Practice Transformation Networks in their region that will provide practices with on-the-ground support as they prepare for MACRA (Psychiatric News, February 5).

Throughout this process, APA will continue to be engaged with congressional and administration decision makers to ensure the best possible policy outcomes for APA members and their patients. ■