For years you have been hearing of pay for performance reimbursement based on outcomes, value-based reimbursement, and similar frameworks.
However, in April 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act (MACRA).
This act amends Title XVIII of the Social Security Act to repeal the Medicare sustainable growth rate, strengthen Medicare access by improving physician payments, and make other improvements such as reauthorizing the Children’s Health Insurance Program (CHIP).
While the MACRA law sets a framework for payment reform, the Centers for Medicare and Medicaid Services (CMS) is currently writing regulations to fill in the details. A final ruling will be released later this year.
Now called the Quality Payment Program, within the MACRA law there are two different payment options: one is the Merit-Based Incentive Payment System (MIPS) and the other is the Alternative Payment Model (APM). This is the blueprint for two options of pay for performance by Medicare.
If you are not involved in an APM, then you will by default be subject to the requirements of the MIPS program, unless you meet the “low-volume threshold” (to be further defined) or are in your first year of seeing Medicare beneficiaries.
Making sense of MIPS
MIPS is a federal quality program that combines three quality incentive payment programs, the Physician Quality Reporting System (PQRS), Value-Based Payment Modifier (VBPM), and Meaningful Use (MU) of Certified Electronic Health Records Technology (CEHRT), into a single quality incentive payment program.
The current incentive programs will be combined and a composite threshold performance score (scale of 0 to 100) established aimed at informing providers of the levels of reimbursement based on four key performance measures: Advancing Care Information (formerly Meaningful Use), Quality (formerly Physician Quality Reporting System—PQRS), Resource Use (formerly Value-based Payment Modifier—VBPM) and a new category called Clinical Practice Improvement Activities (CPIAs).
This new performance area focuses on what you are doing in your practice to improve your care. There are 90 activities that have been identified and providers are given an opportunity to select those that are most appropriate for the services they provide. Note that the law allows certified patient-centered medical homes (PCMHs) and, more recently, patient-centered specialty practices to receive pre-validation for all 15 points assigned in the CPIA category.
Here’s how it works: You’ll receive a MIPS “composite performance score,” which is based on your performance in the above four key areas. The score will dictate annual payment adjustments— either positive or negative. Your individual MIPS score will be compared to a performance threshold to determine how Medicare will adjust your payments each year. Only those scoring on the threshold will receive no adjustment.
Those who score above the performance threshold may receive up to three times the standard payment adjustment, depending on their score. Physicians with scores in the top 25 percent may also be eligible for an additional payment adjustment of up to 10 percent between 2019 and 2024 for exceptional performance.
Upward or downward payment adjustments will be made on individual claims. But MIPS has to be budget-neutral, so CMS will pay for all of the positive payment adjustments with money it gains from negative payment adjustments.
The alternative payment model
By March 3, 2016, HHS had already met its 2016 goal of moving 30 percent of Medicare payments into alternative payment models. Medicare’s goal is to have 85 percent of their payments tied to quality and value by 2016. An APM is defined in the MACRA law as including any of the following: A model under section 1115A (other than a healthcare innovation award), the shared savings program under section 1899, a demonstration under section 1866C, or a demonstration required by federal law.
There are a number of requirements to qualify as an APM entity, such as:
- Use quality measures comparable to MIPS,
- Use a certified electronic health record (EHR) system,
- Bear financial risk for monetary losses under an alternative payment model that are in excess of a nominal amount, or
- Be in a medical home expanded under 1115A(c).
Current qualified APMs that meet these requirements are the Medicare Shared Savings Program Accountable Care Organization, a medical home model expanded under the Center for Medicare and Medicaid Innovation (CMMI), a project under the Medicare Healthcare Quality Demonstration program, or a demonstration required by federal law.
If you meet the APM requirements you will receive a 5 percent lump-sum bonus annually between 2019 and 2024, based on your Medicare Part B claims payments. If you qualify as an APM participant, you will not be subject to MIPS bonuses and penalties.
A new playing field
The time is now to understand the new payment environment that is quickly approaching. Rules emerging in 2016 are setting the stage for the MIPS program going into effect January 2017. The final rule is scheduled for release by November of 2016. The more you prepare for these changes in advance, the better you will be positioned to take advantage of them.
Scott Munsterman, DC, FICC, is founder and CEO of Best Practices Academy (BPA) and is an expert on the transforming model of healthcare delivery with a commitment to the promotion and advancement of the chiropractic profession. BPA assists chiropractic physicians to focus on growth, risk management, technology, and quality improvement. Munsterman can be contacted through bestpracticesacademy.com.