By Holly Taylor, Value-Based Care Strategist, ZirMed
Twitter: @zirmed
With the recent release of the MACRA final rule, the Centers for Medicare & Medicaid Services (CMS) confirmed that they remain committed to implementing the legislative requirements in less than 3 months, but did make some provisions to satisfy provider concerns.
Briefly, the final rule said that CMS decided to increase the flexibility of the Medicare Access and CHIP Reauthorization Act (MACRA). Rather than holding everyone’s feet to the fire right away, as originally intended, CMS is instead introducing a four-tiered system designed to allow providers to ease into MACRA through the “Pick Your Pace” provisions for the 2017 reporting year.
It wasn’t quite the full-on delay in implementation that the American Medical Association (AMA) had been calling for, but it does give physicians a little more time to prepare and avoid penalties if they demonstrate the ability to at least report some data for a minimum period of 90 days. The reality is, the MACRA legislation mandated these timelines so that CMS would have been unable to delay the implementation outside of congressional intervention.
While that may sound like a good thing, organizations that opt for one of the lesser tiers are really only hurting themselves. Here’s why:
Giving with one hand…
There is a lot of potential money to be made via the MACRA Quality Payment Program (QPP) beginning in the first performance year starting January 1, 2017. The QPP includes two distinct new payment categories: the Merit-Based Incentive Payment System (MIPS), which 90-93% of providers will be subject to, and Alternative Payment Models (APMs), which will impact 7-10% of providers.
With MIPS, physicians who perform well can earn a 4% MIPS bonus on top of their Medicare fee schedule. There is also the potential for the MIPS bonus to be increased up to a multiple of 3 if the percentage of providers receiving penalties is higher than those receiving bonuses—but this trigger is very unlikely for the 2017 performance year due to the “Pick your Pace” allowances.
Providers scoring in the top MIPS percentile in 2017 will have a potential of qualifying for an additional “high performer” bonus of 10%, which is derived from a separate budget entirely. Providers with at least 25% of their Medicare patients engaged in approved Alternative Payment Models will receive an across-the-board 5% bonus in addition to the potential bonuses available through the APM’s themselves.
Imagine if your boss said you were eligible for that large a total bonus. Especially given that MIPS allows you to select the quality measures you want to be measured on and quality reporting counts for 60% of the total composite score in 2017. It’s like taking a class and accidentally winding up with the teacher’s copy of the textbook that has all the answers in the back! If you get to choose how you will be measured, it’s a lot harder to fail – although certainly (and unfortunately) not impossible.
…Taking with the other
And that brings us to “the other side” of MACRA and MIPS. Providers who are the lowest performers, or those who choose not to participate at all, will receive a negative 4% penalty, which will increase each subsequent year. Where are those potential core bonuses going to come from? Not from the federal government (i.e., the taxpayers). Instead, the bonus pool will come from the excess penalties collected from those who don’t meet their MIPS performance threshold—MACRA legislation mandates that MIPS must be revenue-neutral.
Playing the long game
What all of this means is that it will probably be fairly easy for providers who are already successfully reporting Meaningful Use and PQRS to meet the performance threshold for MIPS. After all, those two categories will represent 85% of the composite score in the 2017 reporting year.
But if history has shown us anything, it’s the importance of taking the long view. Just think about the recent transition to ICD-10, and the move to electronic health records (EHRs) before that. Delays in implementation deadlines allowed some providers to put off the work. When no more delays were forthcoming they suddenly had to scramble to meet a deadline that was years past the original. The result for them was turmoil and lost revenue due to denials (due to coding errors) or missed incentive payments (EHRs).
On the other hand, the organizations that proceeded as though there was no extended deadline were completely implemented, tested, and ready to go when the deadline hit. For them, it was just another day in the office.
Here’s what that means in practical terms. The plan for MIPS is for bonuses (and penalties) to increase each year through 2022. Organizations that commit 100% to the program in 2017, as though there was no one-year grace period, will find themselves in a much better position to secure bonuses in subsequent reporting years, because they will have tested the waters, made their mistakes, and made corrections. They will understand what is required, and will have managed the cultural changes to show physicians why it’s also in their best interests to meet the quality reporting standards. By the time the larger incentives hit, MIPS quality reporting will be a familiar, comfortable habit.
Organizations that only do the minimum (or do nothing at all hoping for an extension of the grace period) will find themselves at a significant disadvantage going forward. They will find themselves doing the things in 2018 that the others did to prepare in 2017—but the stakes will be higher.
While it’s possible the laggards can catch the early adopters eventually, it will take a lot more work and angst. A year is a substantial lead, and you can bet once the early adopters see the fruits of their labors, they’ll make every effort to stay at the top of the pyramid.
No going back
As if all that were not incentive enough to embrace rather than resist MACRA and MIPS, here’s one more thing to consider: The MACRA final rule clearly states the ultimate intent of the legislation is to move all providers into advanced APM’s. This means that learning how to perform well under the MIPS payment model is not the long-term goal. Instead, the idea is to use MIPS as a transition period to learn how to successfully adopt these advanced payment models—and you don’t want to be late to that party.
Providers will not have many options if they cannot demonstrate consistent performance improvement under MIPS. Health and Human Services Secretary Burwell announced just this week that—based on a survey of more than 50% of health insurance payers in the country (including Medicare and Medicaid)—25% of all payments to providers are being made under Alternative Payment Models in 2016. That number is projected to reach 50% by 2020. Keep in mind this is for all payers, not just Medicare. It’s a wake-up call that we are well on our way to transitioning our health care system to a value-based model—and providers must get on board.
The smart move
When you look at all the options, and the consequences of each, it’s obvious that the smart move is to proceed as if no flexibility or grace period has been granted. Determine your quality measures, get your systems in place and your staff thinking in the right terms – and you’ll realize substantial benefits for years to come.
This article was originally published on ZirMed and is republished here with permission.