SHM Replies to Request for Information on MACRA Reform

Dear Representatives Joyce, Murphy, and Schrier,

The Society of Hospital Medicine (SHM), representing the nation’s more than 50,000 hospitalists¹, greatly appreciates your interest in establishing greater financial sustainability and stability within the Medicare payment system and the healthcare system at large. We also applaud your efforts to examine implementation issues with the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). While MACRA was developed to move the healthcare system away from the fee-for-service model towards value-based payment, this goal has been hampered, in part, by well-intentioned but very real barriers stemming from MACRA itself. We thank you for taking the time to solicit feedback on how to improve the program.

Hospitalists are physicians whose professional focus is the comprehensive medical care of hospitalized patients, providing care to millions of Medicare beneficiaries each year. In addition to managing clinical patient care, hospitalists also work to enhance the performance of their hospitals and health systems. The unique position of hospitalists in the healthcare system affords them a distinctive role in both individual physician-level and hospital-level performance measurement programs. Hospitalists have a range of experience with participating in the two MACRA pathways (MIPS and Advanced Alternative Payment Models (APMs)), including having been major participants in the Bundled Payment for Care Improvement models. It is from these perspectives that we offer our comments on your questions.

General Comments: MACRA is Not Achieving Its Aims

SHM and hospitalists have consistently and broadly supported the goals of MACRA. We believe moving towards a value-based payment system that rewards high-quality care and good outcomes, as opposed to the volume of services provided, will lead to improved patient care and more efficient use of resources and healthcare dollars. However, hospitalists’ experiences under MACRA have shown the limitations of the program far outweigh the benefits.

For most hospitalists, MACRA, and particularly the Merit-based Incentive Payment System (MIPS), has become little more than a compliance exercise. Hospitalists rarely consider MACRA a vehicle to improve quality or patient care, and it is common that discussion of the program begins and ends with “avoiding a penalty.” This is unfortunate. We believe this interpretation of the program largely stems from the reality that many measures have limited meaning and applicability to a front-line clinician’s day-to-day practice. For hospitalists, there are very few relevant quality measures and those that do exist do not reflect the heterogeneity of their work. Cost measures are difficult, if not impossible, to interpret and hold clinicians accountable for costs beyond their control. Taken together, it is understandable why front-line hospitalists do not see how their mandatory participation in the MIPS improves patient care.

Hospitalists taking part in alternative payment models (APMs) have had mixed experiences. While participants appreciate the concerted effort towards creating a value-based payment system, the lack of applicable APMs, difficulty and expense of entry, and the nearly impossible-to-meet thresholds that must be met to realize any incentive has served to discourage participation. Hospitalists and hospital medicine groups were at the forefront of participation in Bundled Payments for Care Improvement (BPCI) and Bundled Payments for Care Improvement Advanced (BPCI-A). Their work on developing the care pathways and models to meet the requirements and goals of BPCI and BPCI-A did improve care for the patients in their bundles. There were investments in staffing and information technology, operational changes, and care innovations. Despite these significant investments, successes were not recognized in the MACRA Quality Payment Program or the APM incentive payment due to the statutory constraints and restrictions for qualifying participation. Consequently, some of the most involved participants in BPCI and BPCI-A either ceased participation at the conclusion of BPCI or have actively dropped their participation in the BPCI-A model.

Beyond BPCI and BPCI-A, many hospitalists care for patients in Accountable Care Organizations (ACOs) or ACO-like environments. Some of these hospitalists may have been included in CMS participation lists for these models, but many were not, leaving their work to be assessed in both the ACO and in their own reporting in the MIPS.

The overall complexity of MACRA, in both the Quality Payment Program (QPP) and APM pathways, has succeeded in diverting resources towards the third-party consultants and vendors that are often needed to comply with program requirements. These resources could be better devoted to providing direct patient care, improving care quality, and staffing levels. For example, hospitalist groups have reported that for many programmatic years, the costs they bore with diverted staff time, hiring consultants, securing reporting vendors, and purchasing new or add-on technologies aimed at compliance have consistently outstripped any potential QPP incentives, even when they have qualified for the exceptional performance bonus.

MACRA created new administrative burdens for clinicians, requiring the tracking and reporting of a larger and ever-changing set of measures. Administrative burden is a leading cause of clinician burnout and contributes to excessive documentation and “note bloat” in electronic medical records. Now that the Centers for Medicare and Medicaid Services (CMS) has restored much of the program to full operation after COVID-related disruptions, clinicians are returning attention to administrative tasks such as the MACRA-related performance assessment activities with fewer resources. The return of MACRA-related performance activities with fewer resources due to a myriad of reasons, from staffing shortages to payment cuts, physicians are forced to spend with patients to meet programmatic requirements.

The MACRA Payment System is Unsustainable, Particularly with Inflation

At this point, CMS has met MACRA’s statutory requirements for the program. The program has shifted into the variable PFS update years of 0.75% for QP status in APMs and 0.25% for MIPS participants. This payment differential continues to leave clinicians farther and farther behind other Medicare fee schedules that have inflation-based increases. We recognize this aspect of the program was designed with the intent to push clinicians into APM participation, but without realistic APM options for many to move to, functionally, clinicians in the Medicare program will receive significant pay cuts in the real-world value of their reimbursements.

Question 1: What legislative reforms are most needed to ensure future CMMI models deliver real improvements in cost and quality, while also ensuring successful scaling of innovations?

The Transition Away from Fee for Service Has Stalled

MACRA’s aim to facilitate the transition away from fee-for-service Medicare towards new payment models that reward value has not been realized and is unlikely to do so absent significant reform. According to the Center for Medicare & Medicaid Innovation’s (CMMI) evaluation across twenty-one Medicare APM models between 2012 and 2020, the results of alternative payment models are mixed². One-third of models assessed showed negative net impact on spending, while the impact on care quality or utilization across models was more varied. More importantly, the pipeline for new models appears dry.

MACRA authorized the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to vet and make recommendations to Department of Health and Human Services (HHS) on payment models developed by stakeholders for potential testing and inclusion as APMs. The panel, which has been meeting since 2016, has submitted reports on a range of models. As of January 2021, the PTAC has recommended 20 models for testing or implementation, yet none have been implemented³. CMMI itself develops models, but many clinicians still cannot meaningfully participate in any of them and those who are participating cannot reliably meet thresholds for qualifying participation and exclusion from the MIPS. Oversight of CMMI has been a focus of both Republican and Democratic members of Congress, and former Representative Michael Burgess reportedly explored legislation to reform PTAC, with the goal of preserving the physician voice in the creation and implementation of payment models. While SHM is not endorsing any particular reform to CMMI or PTAC, there are opportunities to explore reforms that will ensure any model that is created and implemented has sufficient physician involvement to ensure it actually achieves the goals of increasing access to value-based care.

Hospitalists, by nature of their position in the healthcare system, are working in ACOs around the country, but not always given credit for this work. The clinician attribution model for APMs of Qualifying Participants (QPs) does not capture the full team of providers who are working under a model, leaving many forced to participate in the MIPS. CMS’ published data about the 2022 APM incentive payments (2020 performance) highlight the challenges with meeting the QP thresholds, particularly for episode-based payment models⁴. BPCI-A had an average payment threshold score of 4.24 and average patient threshold score of 3.58, when the performance thresholds were 50 and 35, respectively. More cross cutting models like ACOs did not always fare better. The Medicare Shared Savings Program average scores were 46.42 and 45.18, with the average only exceeding the patient threshold. While other models performed better, those models are generally only applicable for a narrow subset of clinicians and specialties. In 2023, the payment threshold increased to 75% of payments, which made QP status even more out of reach. Without significant changes, the APM pathway will remain inaccessible for many parts of the healthcare system.

Question 2: If MIPS were to be reformed or replaced entirely, what would a new physician-led quality program look like? How can we ensure a new program reduces administrative burdens and is applicable to all types of clinicians in all settings, while focusing meaningfully on real outcomes?

MIPS is One-Size-Fits-All; Medicine is Not

Despite having a plethora of measures and activities, the MIPS is a one-size fits all program that does not adequately reflect the diversity of clinicians who participate in Medicare and their different practice environments. Our understanding is that the MIPS sought to develop tailored measures for assessing performance, leading to improvements in outcomes, efficiency, and safety. The pre-MACRA successes in surgical and procedural quality and safety appeared to be a model that could be applied to the entirety of the healthcare system. Ultimately, it has been much more difficult to realize these goals, particularly for medical episodes of care performed by hospitalists.

Hospitalists practice in the hospital, and facilities have their own set of pay-for-performance programs and measures. Some hospitalists are directly employed by their hospital or health system; others are employed by independent staffing companies; still others operate their own independent practices or have some other employment arrangement. Hospitalists are typically incentivized or held accountable by their employer or hospital for hospital-level measures that do not necessarily correspond with MIPS requirements, so they are essentially being held to two reporting/measurement programs – both facility programs and the MIPS. As such, the MIPS has required several legislative or regulatory corrections to prevent facility-based providers from being held accountable for two programs. For example, hospitalists are exempt from the Promoting Interoperability (formerly Advancing Care Information) category of the MIPS. This is because their hospital operates the electronic health record they use, and the hospital is required to meet its own hospital-level requirements.

Following SHM’s advocacy efforts, CMS recognized that the work of hospitalists is also assessed in hospital-level metrics and developed a facility-based measurement option that enables hospitalists to receive a score based on their institution’s Hospital Value-Based Purchasing (HVBP) program score. While facility-based measurement provides an alternative pathway for hospitalist participation in the MIPS, it still has attribution issues that are heightened by the financial risk associated with the MIPS. Many hospitalist groups are uncomfortable with being held financially accountable in the MIPS for a hospital’s total HVBP score and the entirety of that program’s measures, some of which have no bearing on their practice.

Most MIPS measures are tailored either to specialty care, which has a smaller universe of procedures and conditions, or outpatient care, where patient interactions are more contained in episodes of care or longitudinal relationships. Medical care in the hospital, on the other hand, is significantly more discontinuous. Throughout one patient’s hospital stay, there could be interactions with numerous hospitalists, specialists, and other healthcare workers. Additionally, hospitalists see a wide range of diseases and conditions, making it difficult to develop measures that apply to most of their patients or day-to-day work.

MIPS Value Pathways (MVPs) do not fix these problems in the MIPS. As CMS moves towards MVPs for participating in the MIPS, hospitalists are again being left behind. CMS recently published a framework for a proposed Hospitalist and Critical Care MVP. This potential ‘new’ MVP has all the same issues contained in the MIPS, while ignoring important nuances for hospitalists – exemption from Promoting Interoperability requirements, facility-based scoring, and other technical issues hospitalists have with measures or measure reporting. Despite the CMS push for wider use of the MVP pathway, it is clear that MVPs do not and will not meaningfully address the shortcomings in the MIPS. Congress must act to make more wholesale changes to the underlying MACRA statute to ensure the unique circumstances that apply to hospitalists and other specialty groups are respected.

Patient Care is a Team-Based Sport; MACRA Does Not Recognize This

A significant tension between the structure of MACRA and the reality of hospitalist practice is that the financial risks and rewards fall on the individual clinician or group. Improving inpatient care quality, on the other hand, involves increasingly collaborative teams of clinicians across specialties and disparate group/employment structures caring for the same patients. MACRA’s requirement to attribute performance on a measure or set of measures to an individual clinician or a single group is challenging and not reflective of the realities of inpatient care. This dynamic leads to widespread disengagement and fosters the perception of MACRA as a compliance exercise necessitating increased administrative burdens but not an improvement in patient care.

SHM’s Performance Measurement and Reporting Committee reviews and provides comments on quality measures across Medicare’s programs, including the MIPS. A common theme echoed repeatedly in their comments is how attribution processes, which focus on assigning measures to individual clinicians, do not reflect the reality of team-based care in the hospital. Similarly, attribution to a single group is also flawed and does not account for the interdisciplinary care that is commonplace in the hospital setting. Other hospital staff may not be able to bill Medicare for their contributions to the care of a patient but maintain a large role in determining patient outcomes and performance on quality measures. For example, 30-day readmissions is a CMS-calculated claims-based measure that is part of the MIPS Quality category score for many hospitalists. Readmissions, particularly in the first few days post-discharge, may be influenced by decisions and actions of a range of clinicians and non-clinical staff in the hospital, many of whom do not engage with the QPP. At the same time, readmissions are also influenced by external factors outside of the clinician’s care and independent of the hospital stay, such as the availability and quality of outpatient care, transportation and housing issues, and decisions by patients and their caregivers. The attribution for the readmission measure assigns responsibility and accountability to a clinician or group, regardless of the extent to which they can prevent a readmission.

APMs, in theory, should be able to transcend some of these attribution issues rampant in the MIPS measures. In practice however, APMs largely use the same measures available in the MIPS and have similar pitfalls measurement-wise. For example, the Medicare Shared Savings Program uses the same set of measures that are available to groups for MIPS reporting. While Advanced APMs can use any “measures comparable to the MIPS,” MIPS measures are also common throughout Advanced APM models.

Team-based care is the reality in patient care, particularly in the hospital setting. For hospitalized patients, the team of clinicians includes but is not limited to hospitalists, nurse practitioners, physician assistants, nurses, consulting specialists, social workers, case workers, techs, and non-clinical staff. We strongly encourage any reforms to keep in mind team-based care as part of future programmatic structures.

Recommendations

Design a program for the healthcare system we need: Team-based, coordinated care.
The healthcare system works best when it is coordinated and seamless across settings and among clinicians. In many ways, MACRA has reinforced silos in the healthcare system and pitted clinicians against each other. By focusing payments on individual clinicians or groups, MACRA created competition for scarce quality improvement resources. A new program needs to recognize and find a way to assess team-based care, acknowledge differing practice patterns, locations of practice, and patient populations, while accounting for varied employment structures.

Reduce duplication across the Medicare program.
Medicare has measurement programs for all its payment systems. For hospitalists, their work is measured in hospital-level programs, as well as within clinician-level MACRA programs. This redundancy creates a perception of being “over-measured.” Furthermore, certain APMs, like ACOs, commonly operate at the hospital- or system-level, despite MACRA trying to incentivize individual clinician or group involvement. Congress should work towards eliminating the siloes within the Medicare program and streamline reporting requirements.

Reduce administrative and documentation burden.
Hospitalists regularly report administrative and documentation tasks occupy an increasingly large portion of their workday, reducing their bedside and other clinical time. Administrative burden is consistently cited as one of the highest causes of burnout among healthcare professionals. Congress must prioritize reducing administrative workload as part of reform efforts and seek solutions that do not threaten further damage to the clinical workforce.

Consider how MACRA widens the healthcare resource gap.
Rural and small practices have consistently struggled with performance in MACRA, even with special policies in the statute and regulations designed to support their participation. Because successful participation requires resources—staffing, time, and capital—to collect data, report on measures, and implement performance improvement, those clinicians and groups with fewer resources will face challenges to being successful. While actual differences in quality of care must be addressed, poor performance due to resource-based difficulties with reporting and programmatic compliance, particularly in under-resourced areas, cannot be ignored. If poor performance in the program is related to scarce resources, financial penalties may only result in future worsening of performance. We urge Congress to keep in mind how a budget-neutral pay for performance program may exacerbate healthcare access issues and strongly encourage the development of policies to ensure that patients can access high-quality, affordable care anywhere in the country.

Focus on measuring what matters: Improving patient outcomes and care.
Often the measures that matter most to patients are those that cannot be easily attributed to a single clinician. This reality is in direct conflict with the measurement goals of MACRA which are more focused on individual accountability and individual payment adjustments. For example, population health measures and outcomes are of high value for patients and for the Medicare Trust Fund. However, these measures require collaboration across multiple disciplines and sectors of the healthcare system, encompassing both hospital-based care, outpatient care, community-based services, and governmental stakeholders. Therefore, population health measures may not be an accurate indicator of an individual clinician’s or group’s performance. Congress should encourage the identification of measures and other programmatic levers to encourage real improvements in quality of care. Measures should provide meaningful, actionable feedback and serve as individual accountability tools only when clearly appropriate.

Congress should also consider building enough flexibility into what measures can be utilized so as not to disadvantage clinicians whose practice isn’t suitable for the bulk of existing measures. For hospitalists, lack of relevant metrics has put them at an enormous disadvantage under both MACRA and the previous Value Based Payment Modifier where they have averaged only two to four measures available to them. Flexibility on how measures operate and what is measured must be established.

Identify new ways to assess participation in APMs.
MACRA’s statutory thresholds for assessing qualifying participants in APMs have been an impediment to APM participation and have disincentivized continued investment in the systems change required for APM participation. In turn, this has hampered models from realizing their true potential. Congress should reconsider how to assess APM participation and reduce barriers to the development of new and innovative payment models. This includes renewing and redesigning eligibility for incentives aimed at moving clinicians and groups into APMs. For example, instead of relying on a one-size-fits-all threshold for participation as was done with MACRA, Congress could establish a “meaningful participation standard.” Such a standard might allow for looking beyond percentages of patients toward things like the investments being made, amount of restructuring that is necessary, what kind of internal incentives are being used, etc. This would allow for a greater scope and breadth of types of viable APMs, including condition-specific and episodic APMs.

MACRA does not operate in a vacuum.
While MACRA has already required considerable investment from hospitalists despite little to no return in either cost or quality, we do recognize that positive change will likely require further investment. However, providers cannot continue to invest in MACRA-like systems-change while simultaneously receiving payment cuts. Most recently, hospitalists, who practice exclusively in the hospital setting and predominantly bill a small set of Evaluation & Management codes, are subject to an estimated 7% cut to their Medicare reimbursement as a direct consequence of the facility Practice Expense reduction instituted by the CMS in the CY 2026 Physician Fee Schedule final rule (CMS-1832-F). This reduction will significantly decrease available resources for key activities such as patient-focused quality improvement efforts, innovation, and clinician recruitment, which are all critical for purposes of delivering high quality care and maintaining patient access. At a time when many independent hospitalist groups are wondering how they are going to continue caring for patients at all because of these cuts, further investment in things like APMs and Quality Measurement are unrealistic, if not impossible.

Conclusion

SHM appreciates the opportunity to provide feedback to this group of Congressional thought leaders. We look forward to continuing this conversation and working alongside you on continued reforms to the Medicare physician payment system. If you have any questions, please contact Josh Boswell, Chief Legal Officer at jboswell@hospitalmedicine.org or 267-702-2632.

Sincerely,

Chad T. Whelan, MD, MHSA, SFHM
President
Society of Hospital Medicine

1. Lapps, J, Flansbaum, B, Leykum, LK, Bischoff, H, Howell, E. Growth trends of the adult hospitalist workforce between 2012 and 2019. J Hosp Med. 2022; 1- 5. doi:10.1002/jhm.12954

2. Findings at a Glance: Synthesis of Evaluation Results across 21 Medicare Models; 2012-2020. Center for Medicare and Medicaid Innovation. Accessed October 17, 2022 via https://innovation.cms.gov/data-and-reports/2022/wp-eval-synthesis-21models-aag 

3. The Physician-Focused Payment Model Technical Advisory Committee:
Charting Future Directions. Office of the Assistant Secretary for Planning and Evaluation. Accessed October 17, 2022, via https://aspe.hhs.gov/sites/default/files/private/aspe-files/207901/aspe-charting-future-directions-ptac.pdf.

4. Advanced Alterative Payment Model (APM) Incentive Payments for 2022. CMS Quality Payment Program Resource Library. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1997/QP%20Count%20and%20Incentive%20Payments.pdf