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MACRA

Macra Basics

The Medicare Access and CHIP Reauthorization Act (MACRA) signed into law in April 2015, repealed the Sustainable Growth Rate (SGR) and instituted significant reforms to the Medicare physician payment system. Providers must choose one of the two payment pathways.

  • Merit-Based Incentive Payment System (MIPS)

    The Merit-based Incentive Payment System (MIPS) combines the Physician Quality Reporting System (PQRS), the Physician Value-Based Modifier and Meaningful Use into a single performance-based payment system. It also adds an additional performance domain – Improvement Activities.

    MIPS is the default payment system for all providers unless they meet the criteria for successful participation in an Advanced Alternative Payment Model (APM).

  • Alternative Payment Models (APMs)

    Alternative Payment Models (APMs) is a pathway designed to incentivize the adoption of payment models that move away from the Medicare fee-for-service system. To be considered an “Advanced APM” for this pathway, the model must include an element of upside and downside financial risk as well as involve quality measures and the use of Certified Electronic Health Record Technology (CEHRT). For providers to qualify for a 5% incentive payment, participants must be in an Advanced APM and meet a threshold of payments or patients.

What is at Risk?

The Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs) both require provider payments to be associated with performance metrics or value-based assessments.

SHM estimates that the majority of hospitalists will be in the MIPS pathway and should prepare accordingly.

MIPS uses an array of metrics to adjust payments, whereas financial risk and performance assessment under APMs depends on the model chosen. MIPS payments and the APM incentive are based on performance two years prior to the payment year; that is, performance in 2018 will determine payments in 2020.

MIPS Payment Adjustment Year Chart

MIPS

The Merit-based Incentive Payment System (MIPS)

MIPS combines the Physician Quality Reporting System (PQRS), the Physician Value-Based Modifier and Meaningful Use into a single performance-based payment system. It also adds an additional performance domain – Improvement Activities. MIPS is the default payment system for all providers unless they meet the criteria for successful participation in an Advanced Alternative Payment Model (APM).

The weighting for each of the four MIPS categories - Quality, Cost, Advancing Care Information, and Improvement Activities - in 2018 are below:

Quality:  

The Quality category replaces the PQRS and requires providers to report on quality measures. Scoring in this category will be based on performance on those measures providers choose to report.

In 2018, providers will be required to report on at least six quality measures, one of which is an outcome measure. For hospitalists, the quality category will be 75% of their MIPS score in 2018. Most hospitalists will not have enough quality measures to report and will be subject to a validation process to ensure there were no other measures available to them.

Read SHM's MACRA and the Quality Payment Program | Frequently Asked Questions (FAQs) for further information on this process.

Advancing Care Information:

The Advancing Care Information category replaces the Meaningful Use program and is centered around the use of Certified Electronic Health Record Technology (CEHRT). Hospitalists who meet the definition of “hospital-based” will be automatically exempt from ACI, which would shift the category weight to the Quality category. “Hospital-based” is defined as providers who bill 75% or more of Medicare Part B services in Place of Service 21 (Inpatient), 22 (Hospital Outpatient) and 23 (ER).

Hospitalists who practice significantly (>25% of services) in settings such as skilled nursing facilities (SNFs) will still be subject to this category. SHM recommends these providers apply for hardship exceptions if they are unable to meet the category requirements.

Improvement Activities:

The Improvement Activities category is based upon providers completing a range of activities designed to improve or expand provided care. CMS created an Improvement Activities inventory, with more than 90 activities assigned weights of high (20 points) or medium (10 points). Providers need to attest to 40 points worth of activities during the performance year.

Cost:

The Cost category comprises cost and efficiency measures, such as the Total Per Capita Costs and Medicare Spending Per Beneficiary measures from the current Value-Based Payment Modifier (VBPM). Scoring in this category is based on performance in CMS calculated cost measures.

APMs

Alternative Payment Models (APMs)

APMs are the other payment pathway providers can pursue. It is designed to incentivize the adoption of payment models that move away from the Medicare fee-for-service system. To be considered an “Advanced APM” for this pathway, the model must include an element of upside and downside financial risk as well as involve quality measures and the use of Certified Electronic Health Record Technology (CEHRT). For providers to qualify for a 5% incentive payment, participants must be in an Advanced APM and meet a threshold of payments or patients.

Participation in an approved Advanced APM exempts providers from participating in the MIPS and makes them eligible for a 5% increase in Medicare payments. Most hospitalists will be unable to meet the requirements for this pathway and will therefore remain in the MIPS.

Potential Advanced APMs for hospitalists in 2018 include: Medicare Shared Savings Programs Accountable Care Organizations (ACOs), Next Generation ACOs, Comprehensive Care for Joint Replacement Payment Model, Bundled Payments for Care Improvement (BPCI) Advanced. For the full list of available APMs visit www.qpp.cms.gov/apms/overview.

Resources

What Can I Do?

Stay Informed with SHM

Understanding the ins and outs of the policies will help hospitalists choose the best path forward for themselves and for their groups. The MIPS and APMs will be updated and refined through the regulatory rulemaking process each year.

Read SHM's MIPS Guide for Hospitalists

Read SHM's MACRA and the Quality Payment Program | Frequently Asked Questions (FAQs)

Stay informed through SHM's Grassroots Network and check back as policies develop for the most up-to-date information on MACRA. Subcribe to the Grassroots Network now.

Prepare

Prepare yourself and your group for the MIPS and APMs. 2018 performance will be used to determine payments in 2020.

The MIPS penalties change yearly, so it is critical to understand the options for you and your group to participate in 2018.

To determine if you are eligible for the 2018 reporting year, use the MIPS Participation Lookup Tool by simply inputting your NPI. 

Have questions? Contact SHM's Policy & Advocacy staff.

Share

By sharing your experiences with other hospitalists and with SHM, you can help your colleagues overcome reporting and performance issues and help SHM advocate for better policies for hospitalists.