MACRA: An Overview and Implications for Your

Organization

Patrick J. Hurd, Esq.

March 30, 2017

VASHRM

MACRA: How Did We Get Here?

MACRA: How Did We Get Here?

Medicare Access and CHIP

Reauthorization Act of 2015

• Eliminates the Flawed SGR Payment System

• Consolidates 3 Existing Quality-Based Dr.

Payment Programs into MIPs

– Value Modifier (“VM”)

– Physician Quality Reporting System (“PQRS”)

– Meaningful Use (”MU”)

• Provides Incentives for APMs

MACRA Basics

MIPS

APMs

MACRA Basics

Merit Based Incentive Payment System

(“MIPS”)

• A modified fee-for-service model

• Retains some performance-based payments

• Adds performance improvement & innovation

component

• Greater flexibility and wider selection of quality

measures

Quality Reporting

(was PQRS)

Advancing Care Information (was MU)

Cost (was Value-based

Modifier)

Improvement Activities

MIPS

From AMA 01/2017

Presentation

MACRA Basics (“MIPS”)

MIPS

Participants in MIPS

• Medicare Part B clinicians billing more than

$30,000 a year and providing care for more than

100 Medicare patients a year. (MDs/DOs, PAs,

NPs, CNSs & CRNAs)

Clinicians exempt from MIPS

• First year of Part B participation

• Medicare allowed charges < $30K or < 100 patients

• Advanced APM participants

MIPS: 2017 transitional performance reporting options* *Table from AMA 01/11/2017 AMA MACRA Presentation

• Report some data at any point in CY 2017 to demonstrate capability

• 1 quality measure, or 1 improvement activity, or 4/ 5 required ACI measures

• No minimum reporting period

• No negative adjustment in 2019

MIPS Testing

• Submit partial MIPS data for at least 90 consecutive days

• 1+ quality measure, or 1+ improvement activities, or 4/ 5 required ACI measures

• No negative adjustment in 2019

• Potential for some positive adjustment ( < 4%) in 2019

Partial MIPS reporting

• Meet all reporting requirements for at least 90 consecutive days

• No negative adjustment in 2019

• Maximum opportunity for positive 2019 adjustment ( < 4%)

• Exceptional performers eligible for additional positive adjustment (up to 10%)

Full MIPS reporting

• No MIPS reporting requirements (APMs have their own reporting requirements)

• Eligible for 5% advanced APM participation incentive in 2019

Advanced APM

participation

8

MIPS Performance Categories

Category CY 2019 CY 2020 CY 2021 and

beyond

Quality 60% 50% 30%

Resource use (Cost) NA 10% 30%

Clinical practice

improvement activities 15% 15% 15%

Advancing Care

Information (i.e.,

Meaningful Use)

25% 25%

25%

When Does MIPS Begin?

MIPS

Advanced APMs

• “Advanced” APMs

– greatest risks but offer potential for greatest rewards

• Qualified Medical Homes

– different risk structure but otherwise treated as

Advanced APMs

• MIPS APMs

– participants receive favorable MIPS scoring

• Physician-focused APMs--TBD

Advanced APM Incentives

MACRA provides incentives for qualifying

professionals

• Lump-sum bonus payment of 5% of Part B

payments for professional services

• Exemption from MIPS reporting requirements and

payment adjustments

• Higher base rates beginning in 2026

Incentives in 2019 based on 2017 APM

participation

Advanced APM Criterion 1: Use of

Certified EHR Technology

Requires that at least 50% of the clinicians

in each APM Entity use certified EHR

technology to document and communicate

clinical care information with patients and

other health care professionals.

Advanced APM Criterion 2: MIPS-

Comparable Quality Measures

Bases payments on quality comparable to

those used in MIPS quality performance

category.

• Ties payment to quality measures that are

evidence-based, reliable, and valid.

• At least one of these measures must be an

outcome measure if an appropriate outcome

measure is available on the MIPS measure list.

Advanced APM Criterion 3: Bear More

than Nominal Amount of Financial Risk

If actual expenditures exceed expected

expenditures, Advanced APM may:

• Withhold payment for services to the APM

Entity and/or the APM Entity’s eligible clinicians

• Reduce payment rates to the APM Entity and/or

the APM Entity’s eligible clinicians

• Require direct payments by the APM Entity to

CMS.

Advanced APM Total Amount of

Risk

The total amount of risk must be equal to at

least either:

• 8% of the average estimated total Medicare

Parts A and B revenues of participating APM

Entities; OR

• 3% of the expected expenditures for which an

APM Entity is responsible under the APM.

Advanced APMs

For 2017, Models are:

• Comprehensive End Stage Renal Disease Care

Model

• Shared Savings Program Track 2 & Track 3

• Next Generation ACO Model

• Oncology Care Model

• Comprehensive Primary Care Plus (CPC+)

MACRA & The Role of Healthcare

Risk Managers

Fundamental Basis of MACRA: Financial

Risk Sharing

Adverse Outcomes = Increased Risk

Core Healthcare Risk Manager Expertise:

Management of Risk

Guiding Principles of Enterprise Risk

Management: Translate to MACRA

MACRA: Financial Risk Sharing

“Old Days:” Volume of Services

• Less Financial Risk

• More Uncertainty Due to SGR

“Today:” Outcomes Measures

• Financial Incentives for Improved Quality

• Some Penalties for Lack of Improvement

“Tomorrow:” Improve Quality while Controlling

Costs

• Greater Rewards for Greater Risk

• Significant Penalties for Failing to Participate

MACRA: Adverse Outcomes =

Increased Financial Risk

MACRA and ERM

ASHRM ERM Principles

• Advance safe and trusted healthcare

• Manage uncertainty

• Maximize value protection and creation

• Encourage multidisciplinary accountability

• Optimize organizational readiness

• Promote positive organizational culture which will

impact readiness and success

• Utilize data/metrics to prioritize risks

• Align risk appetite and strategy

Other Impacts of MACRA

Hospital and Health System Employed

Physicians vs. Private Medical Staff

Significance of Incident Reports, RCA’s,

FMEA’s

Risk Management Data & Quality Reporting

System Effectiveness

Evolution of Physician Compensation

Structure

QUESTIONS?