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MACRA and MIPS: The Basics and Beyond

June 2, 2016

Origin and Purpose

The passage of the Medicare Access and CHIP Reauthorization Act (MACRA) in April 2015 created a landmark shift in Medicare payment reform. In the year since, the Centers for Medicare & Medicaid Services (CMS) created a new foundation to reward high-value rather than high-volume care, culminating in the Notice of Proposed Rulemaking released on April 27, 2016 (MACRA Rule). The MACRA Rule codifies the three important changes the law made to how CMS pays Medicare providers:

  1. Ending the Sustainable Growth Rate (SGR) Formula.
  2. Combining three existing quality reporting programs (including the EHR Incentive Program) into a new Merit-Based Incentive Payment System (MIPS).
  3. Establishing Alternative Payment Models (APMs) as a new framework to incent health care providers to engage in collaborative relationships to provide coordinated care to patients.

Combined, CMS refers to the new MIPS and APM systems as the Quality Payment Program, which will provide incentives to draw physicians away from traditional Medicare fee-for-service payment toward value-based payment and impose penalties for failing to achieve specific measures that the agency seeks to normalize throughout the health care system. It will also provide incentives to promote use of health information technology and new approaches for care coordination and patient engagement.

The time to prepare for MIPS is fast-approaching – comments on the MACRA Rule are due to the agency by 5 p.m. on June 27, 2016. And on January 1, 2017, about six months from the end of the comment period, the performance measurement periods that will inform payment reductions or incentive bonuses to physicians in 2019 under MIPS will begin. In this first of a series of alerts on the MACRA Rule, we discuss the changes imposed by the new MIPS reporting regime.

Who Does MIPS Apply To?

MIPS applies only to clinicians who participate in Medicare – it does not alter the Medicaid EHR Incentive Program or the Medicare EHR Incentive Program for eligible hospitals or critical access hospitals. It will apply to “MIPS eligible clinicians,” which would include physicians, clinical nurse specialists, certified registered nurse anesthetists, and groups that include any of the aforementioned individuals. In future years, MIPS eligible clinicians could expand to include other Medicare clinicians.

MIPS eligible clinicians include providers who are “non-patient facing,” defined as those who bill Medicare for 25 or fewer patient-facing encounters (as determined by CMS) during a performance period (usually a calendar year). MIPS does not apply to hospitals or facilities, but hospital-based physicians would still be subject to MIPS’ requirements and to payment adjustments for their implementation of the performance measures. The MACRA Rule, however, proposes that certain MIPS performance categories applicable to hospital-based physicians may be weighted differently to account for the practice setting.

The MACRA Rule also outlines requirements for specific Medicare-eligible practitioners who are excluded from MIPS: eligible clinicians in their first year of Medicare participation, Qualifying APM Participants (QPs), certain Partial Qualifying APM Participants (Partial QPs), and clinicians that fall under certain patient volume and Medicare billing thresholds in a performance year. Even though these clinicians are exempted from MIPS, they can voluntarily submit MIPS reporting measure data without being subject to any payment adjustment.

Four Measure Categories Inform the MIPS Score

MIPS eligible clinicians will be assessed based on the completion of measures reported within four performance categories: (1) quality, (2) resource use, (3) clinical practice improvement activities (CPIAs), and (4) advancing care information (ACI). MIPS eligible clinicians will receive a single MIPS composite performance score (CPS), which will factor in the four weighted performance categories in a 0-to-100 point scale. Each performance period will be one year, with Year One running from January 1, 2017 to December 31, 2017. MIPS eligible clinicians will see their Year One performance results reflected in their 2019 Medicare payment adjustments.

The measures within each of the four performance categories previously were reported to multiple quality programs, and much of the same data was being submitted through multiple channels. The MACRA Rule consolidates the reporting into one program to reduce duplication and streamline quality tracking processes for eligible clinicians. CMS plans to provide feedback to MIPS participants on the performance measures beginning in July 2017, first on an annual basis, then more frequently in later years.

The performance categories and reporting requirements are:

  1. Quality Performance Category: The Quality Performance Category replaces the current Physician Quality Reporting System (PQRS) and borrows some reporting measures from the Physician Value-Based Payment Modifier (VBM) program. MIPS will only require eligible clinicians to report on six quality performance measures, rather than on nine measures and multiple National Quality Strategy (NQS) domains as required under PQRS. MIPS eligible clinicians will be able to select the six measures from a list of over 200, 80 percent of which are tailored for specialists. At least one of the six measures must be an outcome measure or high-priority measure and one must be a cross-cutting measure. High-priority measures are related to patient outcomes, appropriate use, patient safety, efficiency, patient experience, or care coordination. Cross-cutting measures are any measures that are broadly applicable across multiple clinical settings and eligible clinicians or group practices within a variety of specialties. Non-patient-facing MIPS eligible clinicians would not need to report on a cross-cutting measure.

    The Quality Performance Category will comprise 50 percent of the MIPS CPS in the first year, 45 percent in the second, then 30 percent thereafter. After the first year, there will be an increased focus on outcome reporting measures. CMS proposes to continue issuing its annual “Call for Quality Measures” to engage clinician organizations and stakeholders in the incorporation of new quality standards. CMS will update the quality reporting measures annually, and publish the proposed list through notice and comment rulemaking by November 1 of the year prior to the first day of the performance period.
  2. Resource Use Performance Category: The Resource Use (or Cost) Performance Category compares the use of resources for treating similar care episodes and clinical condition groups across clinicians. Clinicians scoring the highest points would have the most efficient resource use metrics.

    The Resource Use Performance category replaces the current VBM program and incorporates the following reporting measures from that program: (1) the total per capita costs for all-attributed beneficiaries; (2) the Medicare Spending Per Beneficiary (MSPB) with two technical changes; and (3) 41 episode-based measures. MIPS will incorporate the same methodologies for payment standardization and risk adjustment as currently employed in the VBM. Because CMS will use Medicare administrative claims data to measure performance in this category, there will be no affirmative reporting requirements for MIPS eligible clinicians in this performance category. This category will comprise 10 percent of the CPS in the first year, 15 percent in the second year, and 30 percent thereafter.
  3. Clinical Practice Improvement Activities (CPIAs) Category: This new performance category does not replace any current program, and will constitute 15 percent of the CPS under MIPS. CPIA measures are designed to reward activities such as those focused on care coordination, beneficiary engagement, and patient safety, and will allow for credits for participation in APMs or patient centered medical homes.

    CMS has proposed to allow MIPS eligible clinicians to select from over 90 activities that are associated with improved health outcomes. CPIAs that align with CMS national priorities and programs will be weighted as “high” and worth 20 points each, or be weighted as “medium” and worth 10 points each. Thus, to receive the highest potential score (100 percent, or 60 points), MIPS eligible clinicians will need to complete three high-weighted CPIAs or six medium-weighted CPIAs (or a combination thereof). To achieve the minimum 50 percent score, clinicians will need to complete one high-weighted and one medium-weighted CPIA or three medium-weighted CPIAs, within a minimum of five CPIA subcategories. In order to receive credit, MIPS eligible clinicians must perform CPIAs for at least 90 days during a performance period. Small, rural, geographic Health Professional Shortage Areas (HPSAs), non-patient-facing clinicians, and clinicians who participate in an APM and/or a patient-centered medical home will have alternative CPIA requirements.
  4. Advancing Care Information (ACI) Category: The ACI category replaces the EHR Incentive Program (also referred to as the Meaningful Use Program). This new category emphasizes three objectives – Patient Electronic Access, Coordination of Care Through Patient Engagement, and Health Information Exchange – while eliminating other EHR Incentive Program reporting requirements. MIPS eligible clinicians will need to demonstrate interoperability of EHRs and information exchange as part of this performance measure.

    The ACI category is weighted as 25 percent of the CPS under MIPS. As proposed, it would reduce requirements that were just finalized in October 2015 for eligible clinicians under the Meaningful Use Program and will extend these reduced requirements to clinicians who may not have participated in the Medicare EHR Incentive Program. It also eliminates thresholds for performance to provide more flexibility to MIPS eligible clinicians, and diminishes or, in some cases, the eliminates important criteria previously part of Meaningful Use. For example, CMS proposed eliminating computerized provider order entry and clinical decision support measures and eliminated thresholds and incentives for categories such as e-prescribing. Furthermore, some objectives of the ACI performance category are also incorporated into the other performance categories, such as rewarding clinicians under the Quality Performance Category for use of CEHRT and incorporating the three ACI objectives into CPIA activities. The implications of these changes will be addressed in a future alert.

MIPS Data Submission (individuals and groups)

MIPS eligible clinicians may participate in MIPS on an individual or group basis, but have to use the same identifier across all four MIPS performance categories described above. Individuals would use their taxpayer identification number (TIN) or their National Provider Identifier (NPI) as their MIPS clinician identifier. Groups would be identified by their billing TINs.

MIPS eligible clinicians who submit data as individuals may use multiple reporting mechanisms to provide data on the performance categories (i.e., via claims data for the Quality Performance category and via a qualified registry for CPIA data), but cannot use multiple reporting mechanisms to report data within a single performance category. Data submission deadlines will vary based on the submission mechanism that the MIPS eligible clinician chooses to use:

  • Submission via the qualified registry, Qualified Clinical Data Registry (QCDR), EHR, and attestation mechanisms would occur January 2 through March 31 of the year immediately following the end of the prior performance period. (Example: Year One reporting via these mechanisms will be January 2 through March 31, 2018.)
  • Submission via Medicare Part B claims mechanisms would occur during the performance period. All claims must be processed no later than 90 days after the close of the performance period.
  • Submission via the CMS Web Interface mechanism would occur during the eight week period following the close of the performance period, ending no later than March 31 of the year immediately following the end of the prior performance period. (Example: Year One reporting via this mechanism will could span the eight-week timeframe from January 16 through March 31, 2018.) The exact submission deadline during this timeframe will be published on the CMS website.

Reactions and Take-Aways

Without a doubt, the intention behind MIPS is for Medicare to incorporate quality and value into physician payments. However, it remains to be seen how much these changes will drive physicians to participate in models that result in better patient care or to engage in practices that improve beneficiary engagement and health outcomes.

The reporting measure menu is vast enough for MIPS eligible clinicians to piece together the measures that best reflect their day-to-day practices. However, many required reporting measures vary by the submission mechanism a MIPS eligible clinician chooses to use, and the reporting mechanisms available vary across the four MIPS performance categories. In addition, while some of the performance measures incorporate more familiar concepts from prior Medicare payment systems, many create significant complexity in how MIPS eligible clinicians will be scored. There are also unanswered questions about whether any of these reportable measures under the MIPS performance categories are too costly or have insufficient returns in comparison to the investments necessary to implement them. CMS appears to recognize this, and has requested that stakeholders provide data on costs associated with measures to be included in the CPIA category and for additional data on EHR implementation’s effect on reducing costs or increasing the value of care provided to Medicare beneficiaries.

In streamlining the ACI category, CMS was responding to some legitimate concerns raised by clinicians about Meaningful Use requirements. However, in an effort to consolidate, streamline, and add flexibility, CMS may have created a complex program that rewards clinicians for modest improvements of limited value. Depending on how MIPS eligible clinicians perform, this structure may fall short of the agency’s stated goal to encourage health care quality improvements that will lead to noticeably better care and better health outcomes at lower cost to patients and the health care system as a whole.

Perhaps the MACRA Rule’s complicated reporting requirements will drive the marketplace to respond with the means to easily track and catalogue the data necessary for compliance. The response to the momentous MACRA Rule has already been strong, which highlights the importance of the proposed framework.

We expect that CMS will rush to publish a final rule this fall given the January 2017 target date for implementation and the impending Administration change. This will be a difficult timeline to meet. Nonetheless, thoughtful comments from a variety of stakeholders may have immense influence on the final rule and implementation of the MIPS framework.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Jodi G. Daniel
Partner & CHS Managing Director – Washington, D.C.
Phone: +1.202.624.2908