The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was signed into law on April 16, 2015. This act repealed the sustainable growth rate (SGR) formula that had been used to calculate Medicare payments to physicians. While this was a much anticipated change, there were other impacts on Medicare payments to physicians. MACRA also created a framework for a reimbursement system that is based on providing higher value and quality care, rather than a volume-based model. Beginning in 2019, providers will participate in either the Merit-based Incentive Payment System (MIPS) or the Advanced Alternative Payment Models (APMs), with the option to change their selection annually. Physicians participating in the MIPS track will have payments increased or decreased based on relative performance, while those choosing the APM track will receive incentive payments based on participation.

The current implementation timeline for MACRA defines a 0.5 percent physician fee schedule update each year from 2016 through 2019. The reimbursement level in 2019 will be the starting point for incentives for either program. Most physicians will participate in Medicare reimbursement through the MIPS track until more qualified, eligible APMs become available. From 2020 through 2025, the Medicare physician fee schedule updates will remain at 2019 levels with no changes. Beginning in 2026, additional increases in the physician fee schedule will occur. However, they will be greater for those participating in APMs (.75 percent) compared to those in MIPS (.25 percent).

A "Notice of Proposed Rule Making" for MACRA was published April 27, 2016 and some of those details are included in this discussion. There are several changes in this proposed rule, particularly in the components and their weights of the MIPS compared to previous reports about MACRA. The Department of Health and Human Services (HHS) will accept feedback on the proposed rule until June 26, 2016 on the Center for Medicare and Medicaid Services(CMS) website.

Merit-based Incentive Payment System (MIPS)

The Merit-based Incentive Payment System (MIPS), a modified fee-for-service model, consolidates three existing quality reporting programs: the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBPM), and Meaningful Use (MU), as well as adding a new program, called Clinical Practice Improvement Activities (CPIA). The final reporting period for the PQRS, VBPM, and MU programs will be 2016. As of 2019, they will cease to exist as stand-alone programs. However, these programs along with the CPIA, will begin to collect data in 2017 for use in a composite score. Data from four categories will yield a single number ranging from 0-100, called the MIPS Composite Performance Score. This score will be used to determine physician payment. The composite performance score is established from the following weighted categories:

• Cost (10 percent)
• Quality (50 percent)
• Advancing Care Information (25 percent)
• Clinical Practice Improvement Activities (15 percent)

The Cost component of MIPS will be 10 percent of the total score in year 1 and replaces the cost component of the Value modifier Program (Resource Use). The score would be based on Medicare claims, with no new reporting requirements for clinicians. This category will use more than 40 episodespecific measures to account for differences among specialties¹.

The Quality component of MIPS will be 50 percent of the total score in year 1 and replaces the Physician Quality Reporting System and the quality component of the Value Modifier Program. Clinicians would choose to report six measures instead of the nine measures currently required under PQRS. This category gives clinicians reporting options to choose from that accommodate differences in specialty and practices¹.

The Advancing Care Information component of MIPS will be 25 percent of the total score in year 1 and replaces the Medicare EHR Incentive Program (Meaningful Use). Clinicians would choose to report customizable measures that reflect how they use electronic health record (EHR) technology in their day-to-day practice, with a particular emphasis on interoperability and information exchange. Unlike the existing Meaningful Use program, this category would not require all-or-nothing EHR measurement or quarterly reporting¹.

The Clinical Practice Improvement Activities component of MIPS will be 15 percent of the total score in year 1. Clinicians would be rewarded for clinical practice improvement activities, such as activities focused on care coordination, beneficiary engagement, and patient safety. Clinicians may select activities that match their practices' goals from a list of more than 90 options. Additionally, clinicians would receive credit in this category for participating in the Advanced Alternative Payment Models and in Patient-Centered Medical Homes¹.

For those in the MIPS program, payment adjustments to the fee schedule will be exclusively based on performance. Clinicians will have the option to be assessed as a group or an individual. Since MIPS measures overall care delivery, clinicians do not need to limit their MIPS reporting to the care just provided to Medicare beneficiaries.

Beginning in 2019, providers in MIPS will be eligible for positive or negative Medicare payment adjustments that gradually increase to 9 percent in 2022, where they are targeted to remain.

• 2019 - 4 percent
• 2020 - 5 percent
• 2021 - 7 percent
• 2022 - 9 percent

The threshold for these payment adjustments will be the mean or median composite score for all MIPS-eligible professionals during the previous performance period. Payment adjustments will follow a threshold where half of eligible physicians will be above the performance threshold and half below. CMS will calculate and apply a scaling factor to ensure budget neutrality. Payment adjustments will be based on the following:

• Physicians who score at the threshold will receive no
payment adjustment.
• Physicians whose composite score is above the mean will receive a positive payment adjustment on each Medicare Part B claim for the following year.
• Physicians whose composite score is below the mean will receive a negative payment adjustment on each Medicare Part B claim for the following year.

For 2019 through 2024, an additional positive payment adjustment of up to 10 percent will be available to "exceptional" performers. Exceptional performers will be physicians in the top 25 percent of the composite score. $500 million has been allowed for this performance bonus that is not subject to budget neutrality. Beginning in 2026, all physicians participating in MIPS will be eligible for a 0.25 percent increase in their physician fee schedule payments each year. CMS will calculate and apply a scaling factor to ensure budget neutrality.

There are exemptions from participation in MIPS for some providers including: providers in their first year of billing Medicare, providers whose volume of Medicare payments and patients fall below a threshold (less than or equal to $10,000 in Medicare charges and less than or equal to 100 Medicare patients), and providers who are significantly participating in an Advanced Alternative Payment Model. Additionally, it is anticipated that providers practicing in rural health clinics or Federally Qualified Health Clinics (FQHCs) may also be exempt from MIPS.

Advanced Alternative Payment Model (APM)

Physicians who choose to adopt new payment and delivery models approved by the Centers for Medicare and Medicaid Services (CMS) may be eligible for the Advanced Alternative Payment Models (APM) track. Physicians who choose to be paid under eligible APMs are exempt from participating in MIPS. The APM track is continuing to evolve. APMs largely involve accepting risk based on the quality and effectiveness of care provided. However, Patient-Centered Medical Homes (PCMHs) can qualify as an APM without taking on financial risk. Over time, additional APM options will become available. Under the law, MACRA defines the following as a qualifying APM:

• Center for Medicare & Medicaid Innovation (CMMI), Innovation Center Models
• A Medicare Shared Savings Program (MSSP)
• Medicare Health Care Quality Demonstration Program or Medicare Acute Care Episode Demonstration Program
• Another demonstration program required by federal law.

However not all APMs are "eligible APMs." Eligible APMs must meet the following criteria:

• Base payment on quality measures comparable to those in MIPS
• Require the use of certified EHR technology
• Either (1) bear more than nominal financial risk for monetary losses OR (2) identify as a Patient Centered Medical Home (PCMH) as expanded under the CMS Innovation Center authority.

The proposed rule includes a list of models that would qualify Advanced APMs, including:

• Comprehensive ESRD Care Model (Large Dialysis Organization arrangement)
• Comprehensive Primary Care Plus (CPC+)
• Medicare Shared Savings Program-Track 2
• Medicare Shared Savings Program-Track 3
• Next Generation ACO Model
• Oncology Care Model Two-Sided Risk Arrangement (available in 2018)

All clinicians must report through MIPS in the first year of the program to determine whether they meet requirements for the APM track. For a physician to receive incentive payments for participation, a designated percentage of Medicare payments or patients through a qualified, eligible APM is required. The designated percentage of payments/patients to qualify for incentive payments increases each year. In 2019, 25 percent of payments and 20 percent of patients for an individual physician must be through an Advanced APM. Those percentages increase to 75 percent for payments and 50 percent for patients by 2024. In 2019 and 2020, the participation requirements for Advanced APMs are for Medicare payments or patients only. However starting in 2021, the participation requirements may include non-Medicare payers and patients. CMS estimates that up to 90,000 clinicians will participate in Advanced APMs in the first payment year.

Participants in Advanced APMs will:

• Be paid according to the rules established as part of their APM (e.g., care coordination or infrastructure payments, shared savings, bundled payments, etc.).
• Not be subject to MIPS.
• Receive a 5 percent lump sum bonus payment on their fee-for-service reimbursements for years 2019-2024.
• Receive a higher fee schedule update for years 2026 and beyond (0.75 percent).

Moving Forward

Medicare continues to work out many of the details associated with MACRA. Moving forward, this is the time to start evaluating which model of payment will work best for you. For those of you participating in an APM, determining whether it is an eligible APM is key. If you are in an APM, whether or not it's eligible, you are expected to fare much better under either new Medicare payment pathways. If not already doing so, participating in the current PQRS and/ or Meaningful Use programs and reviewing the Quality and Resource Use Report (QRUR) reports that you receive as part of the Value-Based Payment Modifier is another important starting point. These are the programs that will serve as the building blocks of the new MIPS.

¹ Center for Medicare and Medicare Services. (2016, April 27). Notice of Proposed Rule Making: Medicare Access and CHIP Reauthorization Act of 2015. Retreived from https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/NPRM-QPPFact-Sheet.pdf