Health Law Daily MACRA final regulations reflect input from ‘months-long listening tour’
Friday, October 14, 2016

MACRA final regulations reflect input from ‘months-long listening tour’

By Kathryn S. Beard, J.D.

2017 will be a "transition year" for the Quality Payment Program (QPP) with special policies designed to test category alignment, according to a Final rule with comment period implementing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10). The rule includes significant changes from the Proposed rule based on nearly 4,000 public comments the agency received on the Quality Payment Program (QPP), which updates the Physician Fee Schedule (PFS) to reward high-quality patient care through the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). Changesfrom the Proposed rule (81 FR 28162, May 9, 2016) include more support for small practices and adopting a flexible, pick-your-own-pace approach to the initial years of the program.

CMS released the HHS-approved version of the Final rule on a new interactive website,; the rule has been submitted for publication, but has not yet been placed on public display or scheduled for publication in the Federal Register. The provisions of the Final rule with comment period are effective on January 1, 2017, and comments will be due 60 days after the date of filing for public inspection. Health Law Daily subscribers can refer to our Regulation Tracker, a weekly feature, to ensure that comments on the Final rule are submitted in time for consideration.

Final rule. The Final rule with comment period formally establishes the QPP and the two interrelated QPP pathways, MIPS and Advanced APMs. MIPS is a new program for certain Medicare-participating eligible clinicians that will make payment adjustments based on performance on quality, cost and other measures, while Qualifying APM Participants (QPs) are eligible for participation incentives to assist in the transition from fee-for-service (FFS) payments to payments based on quality and value. The QPP will reflect typical clinical workflows, and across both pathways will support the exchange of patient information while delivering high-quality care to patients. The eventual goal for QPP is that all the clinical activities captured in MIPS across the four performance categories will reflect the single, unified goal of quality improvement.

Significant changes. In response to comments to the Proposed rule, CMS made significant changes in the Final rule. Most notably, MIPS participation will no longer be required in calendar year (CY) 2017, the first performance period of the QPP (see Physician reporting streamlined, less burdensome under flexible Quality Payment Program, April 28, 2016). Instead, CY 2017 will be a "transition year" that corresponds to the first payment year, CY 2019. The agency announced its plan to gradually transition to QPP while ramping up program integration, creating less financial risk for clinicians in the first two years of the program (see CMS gives physicians options for easing into MACRA Quality Payment Program, September 9, 2016). For the transition year, physicians are able to pick their pace of participation with three flexible options to submit data to MIPS and a fourth option to join Advanced APMs in order to become QPs, which would ensure they do not receive a negative payment adjustment in 2019. The transition period will also allow clinicians and CMS to build capabilities to report and gain experience with the program. In addition to the transition year for CY 2017, the agency added support for small and independent practices, offered additional opportunities to move toward Advanced APMs, and created a unified program to support clinician-driven quality improvement.

MIPS. MIPS is for clinicians who participate in traditional Medicare and provides the opportunity to earn a performance-based payment adjustment. CMS estimates that 500,000 clinicians will be eligible for MIPS in CY 2017. There are four performance categories for MIPS: quality, improvement activities, advancing care information, and cost. Providers can report data as an individual or as a group—groups wishing to report using the CMS Web Interface must register to do so by June 30, 2017.

Advanced APMs. Advanced APMs let practices earn more for taking on a level of risk related to patient outcomes. To participate as an Advanced APM, the program must be part of certain payment models—including some created under the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) CMS Innovation Center, such as Medicare Shared Savings Program (MSSP) Tracks 2 and 3, and Next Generation ACOs. Advanced APMs must also (1) use certified EHR technology; (2) base payments for services on quality measures comparable to those in MIPS; and (3) either be a Medical Home Model expanded under Innovation Center authority or require participants to bear am more-than-nominal financial risk for losses. For CY 2017, CMS estimates that 70,000 to 120,000 clinicians will participate in Advanced APMs and qualify for a 5 percent incentive payment. The agency is working to create additional opportunities for Advanced APM participants and anticipates adding three payment models to the approved Advanced APM list for CY 2018.

Small practice concerns. The Final rule adjusted the MIPS low-volume threshold from $10,000 of billed Medicare Part B allowed charges to less than or equal to $30,000—or less than or equal to 100 Medicare patients—which will exclude many small practices from MIPS requirements. According to CMS, this threshold represents 32.5 percent of pre-exclusion Medicare clinicians but only 5 percent of Part B spending. Medicare clinicians in small practices will also be the recipients of the previously announced $100 million in QPP training funding (see HHS provides funding for training small practices in Quality Payment Program, June 21, 2016). CMS also simplified prior "all-or-nothing" requirements in the use of certified EHR technology. The Final rule sunsets payment adjustments under Meaningful Use and reduces the total number of required certified EHR technology measures from 11 in the Proposed rule to five. Clinicians have the option of reporting on the other measures and would allow them to receive a bonus during the transition year.

Much criticism of the Proposed rule centered around the amount of time doctors would need to prepare (seeSave time and money with careful MIPS preparation, July 7, 2016) and the burden of the reporting requirements, particularly those relating to EHR technology (see Hearing addresses physicians’ MACRA preparations, April 20, 2016; CMS hears small practice MACRA concerns, pursuing compliance flexibility, July 13, 2016). The American Medical Association (AMA), which submitted lengthy comments on the Proposed rule, gave CMS credit for responding to many of its concerns, applauded the raised low-volume threshold and said "practices of all sizes will benefit from reduced MIPS reporting requirements."

Fact sheets. Along with the Final rule, CMS provided fact sheets and other resources to help explain aspects of the regulations:

MACRA. MACRA ended the failed sustainable growth rate (SGR) and combined multiple value and quality programs—the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (known as Meaningful Use), the Physician Value-based Payment Modifier (VM), and components of the Physician Quality Reporting System (PQRS)—into a single framework (see Ding dong, the SGR is dead!, April 15, 2015). MACRA builds on quality improvement measures created by the ACA.

Companies: American Medical Association

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