MACRA Final Rule solidifies new physician reimbursement model

The Centers for Medicare and Medicaid Services (CMS) has released the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Final Rule. MACRA is a sweeping change to Medicare physician reimbursement that moves physician reimbursement to a system focused on “value-based payments” in an attempt to increase the quality and efficiency of care.

MACRA repeals the Sustainable Growth Rate formula that is currently used to determine Medicare payments for providers’ services and moves away from the traditional fee-for-service (FFS) reimbursement model in which physicians were reimbursed primarily based on the quantity of patients they saw. MACRA creates a system that reimburses physicians based on the quality of care, as well as other factors.

The Quality Payment Program, which is the replacement for FFS, will have two distinct paths that physicians and other clinicians can choose between: (1) Merit-Based Incentive Payment System (MIPS) and (2) Advanced Alternative Payment Models (APM).

Clinicians who choose MIPS will be reimbursed based on four categories, including three existing programs: (1) Physician Quality Reporting System, (2) Meaningful Use, (3) Physician Value-Based Modifier and (4) the new Clinical Practice Improvement. CMS will begin measuring performance for physicians and other clinicians through MIPS beginning in January 2017, with payments based on those measures in 2019.

Clinicians who qualify for and choose the APM, which is the more “radical” alternative, will be reimbursed based on their participation in APMs such as Accountable Care Organizations, Patient-Centered Medical Homes, and other programs approved by the Center for Medicaid and Medicare Innovation that will provide coordinated, high quality and efficient care. The incentive is that clinicians who  participate in an APM are exempt from MIPS payment adjustments and will qualify for a five percent annual Medicare Part B incentive payment between 2019 and 2024 with the potential for further incentive payments down the road.

In order to determine whether clinicians meet all the requirements for the APM track, all clinicians will report through MIPS in the first year. Out of concern for physicians and other clinicians, who are understandably worried about how implementation will affect their reimbursements starting in 2019, the Final Rule has created a transition year beginning January 1, 2017, that will allow physicians and other clinicians to choose their level of participation. The four options allow for varying levels of reporting to MIPS, with financial incentives to encourage clinicians to report more information than required during the transition year.

CMS noted that “we expect the Quality Payment Program to evolve over multiple years in order to achieve our national goals” and that this Final Rule is part of a “staged approach.” CMS explained that due to this staged approach, they are providing a comment period. Comments on the Final Rule can be submitted at https://www.regulations.gov/ or by mailing one of the addresses shown in the executive summary of the Final Rule. To ensure consideration, comments must be received no later than 5:00p.m. 60 days after the date of filing for public inspection.