Medicare Access and CHIP Reauthorization Act
Introduction
The Medicare Access and CHIP Reauthorization Act of 2015 abbreviated as MACRA is an American statute, which alters the payment systems used in compensating medical practitioners who treat patients under the Medicare program. MACRA alternatively known as Permanent Doc Fix revises the 1997 Balanced Budget Act (Daniel & Annelies, 2017). The law brings in large scale changes in the health sector, which are akin and next in scale to the changes initiated by the Affordable Care Act (‘Obamacare’) from 2010. MACRA was passed by Congress on 14th April, 2015, and President Barrack Obama signed the act into law on 16th April, 2015. This piece of legislation repealed the Sustainable Growth Rate (SGR) formula used to determine the payment of medical practitioners. SGR linked yearly medical practitioners’ payment updates to the gross domestic product (GDP) and the previous year’s spending. The act’s main objective was to replace the SGR formula with the Quality Payment Program (QPP) (AMA, 2018). The act contains the first major alterations to the way in which Medicare Part B physician reimbursement is done in nearly 20 years of SGR’s existence. The SGR formula has been used in reimbursing physicians under a fee-for-service (FFS) system since its creation in 1997 (AANA, 2018). The act has updates of the scheduled Physician Fee Schedule (PFS) and a new payment plan, which permits eligible medical practitioners to participate through two paths namely: the Advanced Alternative Payment Models (APMs) and the Merit-based Incentive Payment System (MIPs). The Alternative Payment Model creates a way for medical practitioners to get incentives for taking part in the new payment and care delivery models that have migrated from the fee-for-service model (AANA, 2018). On the other hand, the Merit-based Incentive Payment System (MIPS) still adheres to the FFS, but it differs because of its consolidation of the existent Medicare quality-related programs. This bipartisan act significantly supports the much-sought quality improvement in healthcare because it allows the migration from the present-day fee-for-service (FFS), volume-driven system of reimbursement, to a quality-based model, which rewards value and quality of health care delivery over the service volumes provided (Marron-Stearns, 2018). Regulations under MACRA Act also incentivize the process of using health information technology by all medical practitioners and other providers of care (Daniel & Annelies, 2017).
The Primary Provisions of MACRA
The basic provisions of the act bring about three major changes, which include:
- Increased funding
- Changes in the model of reimbursing medical practitioners through the repeal of SGR method
- Extension of the CHIP (Children’s Health Insurance Program) (Daniel & Annelies, 2017).
Implementation
The implementation of the MIPS under MACRA act falls under the docket of the Department of Health and Human Services (DHHS) Secretary. The DHHS and the Government Accountability Office (GAO) are designated to help in the implementation of a countrywide electronic health records system (EHRS) (Marron-Stearns, 2018). Both DHHS and GAO help providers of care by comparing and recommending available EHR systems to providers. The full implementation plan for EHRS is set to begin on 31st December 2018 as planned under act. Even though the main provisions of the act start in 2019, providers of healthcare services should be prepared before then because the 2017 data on performance will be used by Medicare to process 2019 payments (Daniel & Annelies, 2017).
MACRA’s Background
The need to create this legislation was elicited by the need of the Centers for Medicare and Medicaid Services (CMS) to improve the quality of care while controlling the high rise in the costs of healthcare. In order achieve this end, the CMS decided to eliminate the FFS traditional model of payment and replace it with a model that would factor in quality as a variable. The QPP path establishes a healthcare system that is patient-centered and able to deliver better care, sustainable expenditure, and better health outcomes among communities and people by pegging payments on value and quality instead of volume (AMA, 2018; AANA, 2018). MACRA creates a lot of incentives, which are intended to encourage medical care practitioners to re-design their delivery of care so as to offer more value. This is bound to happen because by 2019, 4% to 5% of medical care providers’ yearly Medicare reimbursements are supposed to be based on value. This percentage is expected to increase by 2022 to 5%-9%, and this implies that there will be more incentive to re-design care systems to deliver more value. The SGR model is known to have led to utilization growth and uncontrollable expenses (Daniel & Annelies, 2017). In order to bring healthcare expenditure under tight control and redirect healthcare funding to the efforts of delivering high-quality care the SGR formula had to be replaced by QPP through the passage of the MACRA act. The act’s incentives will drive providers handling Medicare clients to remodel their systems by modernizing care practices and adopting technology such as the EHRS. Virtually, all providers that take Part B payments from Medicare will be affected. However, for the sake of protecting independent and small providers, who serve less than 100 patients, exceptions will be made. Also, providers who submit charges that are below $30000 under part B of Medicare will be exempted from being part of the QPP (AMA, 2018). In spite of this exception, it is expected that an estimated 93% of Part B Medicare reimbursements will get under the QPP (AANA, 2018). Medical practitioners to be reimbursed under the new model will include physicians, certified nurse anesthetists, clinical nurse specialists, nurse practitioners, and physician assistants and other groups of providers in the years to come. QPP provides two paths to provider reimbursement. Firstly, eligible medical practitioners who take part in the alternative payment programs of CMS such as Comprehensive ESRD Care Models and Medicare Shared Savings Program, and Next Generation ACOs will receive their payments under APM. By 2018, an estimated 25% of eligible providers will be paid under APMs, whereas; the remaining percentage that will not participate will automatically get their payments under MIPS (Daniel & Annelies, 2017; Marron-Stearns, 2018).
Comparison of MIPS to APMs
Projections show that MACRA may affect 90-95% of physicians in active practice and influence 93% of Part B Medicare reimbursements. To participate in QPP and comply with MACRA act providers take either the MIPS or Advanced APMs path. The Advanced AOM alternative rewards and creates incentives for medical providers that take part in value-based payment systems that have downside and upside risk such as the ACOs model (Accountable Care Organizations model). The second alternative is MIPs. This default alternative is for care providers who do not participate in programs that qualify for the first alternative. Notably, the MIPS alternative is not a final destination for practitioners. Instead, it is a path to Advanced APMs for practitioners who are new to value-based and risk-based contracting (Daniel & Annelies, 2017).
MIPS
By 2017, all practitioners unable to participate in the Advanced APM will by default get included in the MIPS path. However, there are some types of physicians who will be exempted from this program and these include: independent practice small-scale providers who do not meet the Medicare revenue or patient threshold, practitioners under the present Shared Savings Program Track Two, Health Centers that are federally qualified and rural health clinics (AANA, 2018). After eliminating these exempted units, it is expected that 500000 practitioners will be enrolled under MIPs by 2019. By 2019 MIPS will present a 4% opportunity or risk by either rewarding or penalizing practitioners under it based on the practitioners’ ability to deliver value as computed under the MIPS system of scoring. These incentives will continue rising each year: 2019 (4%), 2020 (5%), 2021 (7%) and 2022 (9%). Providers under MIPS are rated according to composite computed score and the top quartile gets positive adjustments on performance. The middle 50% of the clinicians get a neutral score, whereas; those in the last quartile get a negative score. In essence, this path presents a zero-sum game, where the win of one clinician means the loss to another one clinician. MIPS participants will be graded on four basic factors, which are weighted differently to get a composite score. The four areas to weigh include clinical practice improvement, resource use, advancing care information, and quality reporting (Daniel & Annelies, 2017).
Quality reporting
Quality reporting is the most weighted factor and the incentive based on it is high because its accounts for 60% of the total score that a practitioner can get by 2017. The measurement of this element is computed using the Physician Quality Reporting System (PQRS). The practitioners are expected to report 6 measures of quality including outcomes of care for at least three months (Mullins, 2018). This factor thus involves elements of high-quality care delivery and the ability to accurately measure and report the statistics (Daniel & Annelies, 2017).
Advancing care information
The next most weighted factor is advancing care information and this component’s score accounts for 25% of the total score in 2017. Providers will report five basic metrics for 90 days (Mullins, 2018). This factor often requires the practitioners to improve and invest in developing the interoperability and functionality of HER systems (Daniel & Annelies, 2017).
Improvement of clinical practice
CMS reserves 15% of the composite score for attribution to initiatives aimed at improving actual clinical practice in 2017. The initiatives under this consideration include the use of telehealth, engaging the use of qualified and clinical data registry (QCDR) and maintenance of certification (MOC) assessments – just to mention, but a few (Daniel & Annelies, 2017).
Resource use
The resource measure factor was not considered in 2017, but by 2018 it will be considered because CMS will measure cost accountability using reimbursement claims data via the resource use programs (Mullins, 2018). Resource use may have a small effect on the composite score, but providers will have to work hard to score high on all four factors (Daniel & Annelies, 2017).
APMs
APMs provide the second alternative of complying with MACRA and participating in the QPP. According to CMS approximately 70000 practitioners would be eligible for enrolment into the Advanced APMs by 2017, and these practitioners would be exempt from the MIPs. Participating medical practitioners in the Advanced APMs get automatic qualification for a yearly bonus of 5% in addition to bonuses, incentives, and rewards earned from other programs. Just like MIPs participants, Advanced APM s participants will also get 0.5% increases on payment updates annually. But by 2026 medical practitioners in the APMs will get updates of 0.75%, while those in the MIPS will get only 0.25% by that time (Daniel & Annelies, 2017). This reinforces the notion that MIPS as a program is not a final destination for practitioners, but rather a path to the destination, which is supposed to be the Advanced APMs. All medical practitioners that need to be in the Advanced APM model should choose one Advanced APM models and get engaged. CMS has ratified a number of APM models and some of these models include:
- Comprehensive ESRD Care Model
- Comprehensive Primary Care Plus (CPC+)
- Next-generation ACOs
- Medicare Shared Savings Program (MSSP) ACOs in Track 2 or 3
Other alternatives, which may qualify for the same category by 2018 as recommended by CMS include:
- Advanced Cardiac Care Coordination Bundled Payment model
- Comprehensive Care for Joint Replacement (CCJR) Bundled Payment models
- Voluntary bundled payment model
- ACO Track 1+
In addition to these programs, which meet CMS standards, the CMS has created a permissive path known as the ‘Design Your Own Advanced APM’ alternative that uses the Physician focused (PTAC) Payment Model Technical Advisory Committee to assess and review proposals for creation of new APM models, which are brought forth by other stakeholders including providers of care as well as payers of care services. If PTAC approves any model of APM, then the medical practitioners under the APM qualify for this second option of complying with MACRA. Examples of APM models, which may soon be approved by P.T.A.C., include the oncology care coordination risk-based models and the Vermont All-Payer Model (Daniel & Annelies, 2017).
There are three major components that are essential in the creation of APMs and they are a necessary inclusion in submissions made to PTAC. These components include downside and upside financial risk, quality metrics-based incentives, and the use of certified EHRS technology.
Incentives or pay based on quality metrics
According to CMS requirements, advanced APMS should have their measures on quality focused on improving and monitoring patient care. Advanced APMS, which have been presently allowed to operate such as MSSP ACO, have quality metrics, which have been integrated into their participation programs. The quality and reporting elements of these plans primarily target process metrics, instead of outcome-based measures.
Downside and upside financial risk
For medical practitioners to qualify for the APMS path, they ought to get some of their Medicare payments through a qualifying and approved APM with financial risk. Presently, the minimal qualifications to get into an APM model are based on the need for at least 25% of reimbursement claims and 20% of Medicare patients to get their payments for services received processed through an Advanced APM arrangement (AANA, 2018). Medical practitioners can also get partial APM status if 10% of the patients they serve get their reimbursements processed via an advanced APM program and 20% of such reimbursements go through such an Advanced APM. The downside and upside risk should be at least 30 percent, and any new models seeking PTAC approval should confirm that their presented model meets this 30% threshold (Daniel & Annelies, 2017).
Deployment of certified EHRs technology
Lastly, APMS should demonstrate a considerable use of certified electronic health records systems. This should happen at or above the basic meaningful use mandate found under the MIPS program. This requirement is needed because analytics and IT capabilities are essential in monitoring quality metrics.
The Pros and Cons of MACRA
In April, the state released the 962-page notice document presenting MACRA. Health industry players have dug into the Notice of Proposed Rulemaking (NPRM) document to understand its details and plan for changes that would affect their models of practice as they try to comply with MACRA requirements before the set deadlines. Going through this large document is an intimidating task, but healthcare organizations needs to understand it and start implementation plans because the change process that it initiates is necessary. MACRA has initiated remarkable and significant changes to the manner in which Medicare providers carry out their operations and it is these significant changes that have attracted negative feedback because most people often fear change and dislike the tumults that come with it because they change their ‘normal’ routines of operation (Daniel & Annelies, 2017). In addition to the Obamacare changes, the MACRA-initiated changes have increased the pace of change in the healthcare industry and these numerous changes in the recent past have led to some kind of ‘change fatigue’ thus attracting negative feedback. The plans of the government to cut reimbursement costs through these changes is also another aspect of the change process that does not make the whole process appealing for providers in the health sector because it reduces their collections.
In spite of the negative feedback, MACRA and the implementation document (Notice of Proposed Rulemaking) that puts it into action are not entirely a negative force. In actual sense, there are a lot of positive outcomes that are expected to emerge from the act and its implementation, and here are some expected merits and demerits of the act and its implementation.
Regardless of the nature of the reception that MACRA gets the law is in actual sense nobly conceived and its intentions of enhancing the quality of care at reduced costs a course that is worth pursuing. Here is a brief highlight of some of the important merits of MACRA to the health sector.
Extension of CHIP and the Elimination of the Sustainable Growth Formula
Many people agree that the previous SGR formula, which MACRA repealed, was a flawed system and its use destabilized the Medicare program and negatively affected access to healthcare. By enacting MACRA, the US Congress averted a 21% cut on payment for services delivered to Medicare patients and the law helps in ensuring that there is a greater availability of medical practitioners that are willing to deliver healthcare services in return for Medicare payment. By passing SGR in 1997, Congress aimed at controlling the increasing Medicare expenses (Michaels, 2016). SGR determined payment levels for practitioners based on the growth of the economy measured by the GDP. However, by 2002 the formula was failing to control the costs that were increasing faster than SGR. In this period the practitioners were facing an estimated 5% pay cut. Physicians accepting Medicare payments have been facing annual cut since the SGR failed to control the skyrocketing costs of care delivery and most healthcare practitioners have since then considered opting out of the Medicare program. This is part of the SGR-related problem that MACRA hopes to correct by improving the appeal of Medicare (McWilliams, 2018). MACRA also creates an extension on the funding dedicated to Children’s Health Insurance Program (CHIP). This is a program, which was developed in 1997 to provide health covers for children from moderate and low-income homes with income levels, which are too high to qualify their enrollment into Medicaid (Michaels, 2016).
It fosters the attainment of improved patient outcomes
MACRA aims at replacing the FFS payment model with the value-based payment system. Regardless of whether providers take the MIPS path or decide to take part in the Accountable Care Organization (ACO), which is part of the Advanced APMS, they all have a common overarching mandate, which is to improve patient care outcomes through adding value. Two out of the four factors under MIPS, which take 65% of the composite score, which is used to compute penalties and bonuses solely focus on the improvement of care and the attainment of improved patient outcomes (Michaels, 2016). In fact, quality accounts for 50% of the score and this covers mandates on reporting quality metrics linked to population health and positive healthcare outcomes. Clinical Practice Improvement Activities (CPIA) emphasizes the deployment of patient-centered models in the formulation of programs, which lead to healthier, smarter, and better care. This accounts for 15 percent of the aggregate score and it is determined from the measure of improvements made on 9 basic elements that include population management, practice assessment and patient safety, and coordination. CPIA and quality categories need significant reporting, and this perhaps the reason why most physicians may dislike the new changes, but such extensive reporting improves accountability (Michaels, 2016).
Emphasizes the introduction and use of technology
It is arguably true that the improvement of healthcare quality and cost-cutting are aligned with the improvement of technology use in healthcare. Collection, analysis, and sharing of patient information are essential in improving patient outcomes and reducing general healthcare costs. One of the main hindrance to the seamless use of technology results from the lack of interoperability, which is the inability of systems to communicate with each other seamlessly (Michaels, 2016). The (ACI) Advancing Care Information category under MIPS is aimed at changing the status quo and fostering technology use by initiating the support for basic objectives of Meaningful Use and the HITECH Act. The program’s efforts also continue to promote progress on the important issues that support the creation of better healthcare delivery such as the advancement of patient engagement and health information exchange (HIE). The increase in the use of technology within the healthcare sector implies that there will be more available information (Michaels, 2016). Therefore, apart from using this information, organizations have to be concerned about its storage, security, and safety. This is the main reason why security is an essential element of the ACI. The protection of patient information question for providers is a yes or no query and if providers cannot answer yes, the provider or organization gets a zero score for the whole ACI category. This may happen even if the provider meets all the other required measures (McWilliams, 2018). ACI takes a whole 25% of the composite score and it includes most of the HER incentives and it is sufficiently replaces Meaningful Use (Michaels, 2016).
In spite of being conceived with noble intentions in mind, MACRA laws and the NPRM directing its implementation present some challenges, which are often perceived by some providers as being more disadvantageous to their operations than being beneficial (McWilliams, 2018). Here are a few reasons why the law may be regarded as being disadvantageous.
MACRA may hurt Small Practices
Based on the data presented within the Notice of Proposed Rulemaking the new laws may have a significant negative impact on approximately 100000 providers in small-scale practice in the entire nation. The projections from CMS reveal that about 90% of solo practice providers will get affected by negative adjustments, which may reach a total of approximately $300 million USD by the time the reimbursement regulations start in 2019 (Michaels, 2016). Also, 70% of practices, which have 2 to 9 eligible medical practitioners, are expected to get hit by negative adjustments that could reach $279 million USD. Additionally, another 18% of practices employing 100 or more eligible medical practitioners are also expected to be hit by negative adjustments totaling $57 million. This trend implies that smaller practices may be unable to sustain their operations and bigger practices may be encouraged to buy or assimilate smaller practices. As such, acquisitions and mergers may increase with the finalization of the implementation of the MACRA laws and regulations (Michaels, 2016).
Short Implementation Time-frame
Most of the providers who are not ready to move into the new system often state that the implementation of MACRA is unreasonably fast. This means that the process does not give providers ample time to prepare. In fact, some providers have made an objection that implementation of the new regulations only eight months after the release of the Notice of Proposed Rulemaking is unreasonable (Michaels, 2016). In a letter dated 24th June, the Medical Group Management Association (MGMA) notably alerted the CMS that MIP system does not grant ample time to trading partners, practices, and physicians to make preparations for the proposed alterations to system, investment, and workflow requirements. MGMA agrees with the overall spirit of the new laws and regulations, but they categorically hold that there is insufficient time to fulfill the designated goals. Recent research findings have even shown that a considerable number of physicians are totally unaware of the MACRA laws and regulations (Finnegan, 2017). This implies that the many doctors who are unaware of these newly proposed changes to Medicare payment systems may throw most medical practitioners into confusion as they try to catch up and comply with the laws and regulations so as to remain operational when MACRA finally comes into effect (Michaels, 2016).
The complexity of MACRA’s implementation is plainly evidenced by the high page count of the NPRM document that is MACRA’s implementation guideline. Healthcare is a complex business in the current world, but the NPRM takes this a wholly new level of complexity. For instance, the NPRM defines the 55 acronyms used throughout the document in a total of three pages, and the page after page “bureaucratese” is hard to follow for a first-time reader of the document (Michaels, 2016). In fact, it is complex and challenging for any ordinary provider to comprehend and dissect the whole NPRM document. This is perhaps the reason why AMA (the American Medical Association) has urged the CMS body to take time and reconsider the approach it has taken on this rather burdensome and complex implementation. In response, CMS has decided to provide an interim final rule in the coming fall so as to get more feedback (Michaels, 2016).
MACRA is a law conceived with good intentions in mind, and its full implementation is expected to have positive outcomes, which may include marked improvements in the quality of healthcare delivered by providers under the Medicare Part B. In addition, the implementation of the related regulations and laws are expected to lead to a decline in healthcare expenses that go into reimbursements. But it is also arguably true that the law has a few flaws such as its overly aggressive implementation timeline, which does not give providers sufficient time to prepare and plan changes that are necessary for compliance. In spite of this fact, it is true that the law is not totally untenable. However, the government and the concerned healthcare industry players should try and work together in finding a way to reach the intended goals of MACRA without placing undue pressure on providers, which may compromise their daily operations in healthcare provision. So far none of the regulations or clauses of MACRA have proven to be adversely negative to practice. The expected negative adjustments are yet to be clearly determined once the law is in full effect. However, there is an actual concern that needs addressing and that is the short implementation time-frame. A little delay in the setting of the deadline should be considered by CMS so that more providers can get time to make the necessary preparations. In the end, the full implementation of MACRA will be significantly beneficial to all patients in the affected health sectors because targeted improvements on quality may improve the quality of healthcare that the patients receive. It is also expected that the reimbursement costs will decline in the long-term and this may lead to a decline in healthcare cover premiums, which is beneficial for all citizens.
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