Preparing for the 2018 Final Rule Cost … Category
- December 11, 2017
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) was released on October 14, 2016. It repealed the Sustainable Growth Rate (SGR) formula for updates to the Medicare physician fee schedule and provided payment updates for all future years. It also created a framework for transitioning from fee-for-service to value-based care, and for reimbursing Qualified Providers based on quality, outcomes and cost of care. In doing so, CMS combined the Physician Quality Reporting System (PQRS), Meaningful Use and Value-Based Payment (VBP) initiatives into one comprehensive program.
Now that MACRA is out, how should a health system
executive or a practice leader prepare?
The first step is to clearly understand how it will impact your organization. Qualified Providers must participate in one of two Quality Payment Programs (QPPs):
- MIPS (The Merit Based Payment System), and
- APMs (Alternative Payment Models).
MACRA has significant financial implications. Qualified Providers can receive penalties or incentives of up to 4% of Medicare part B fees in 2017 (applied to 2019 reimbursements) for achieving or failing to comply with MIPS performance requirements. This will increase to 9% in 2022. Thus, the delta between top performing systems and bottom performing systems will be 8% in 2017 and increase to 18% in 2022. This creates a very significant incentive for health systems and physician practices to perform well. For APMs, a flat incentive of 5% is possible depending upon the APM selected.
The chart below clarifies the payment incentive structure:
Executives will need to decide whether MIPS or APMs are most suited to their organizational goals and to lead them organization to success. This will entail strategic planning and execution across the enterprise involving key members of the financial, quality, clinical and information technology teams. Each team will need to understand the four weighted performance categories of MIPS which contribute to a total composite score of 100%:
- Advancing Care Information
- Clinical Practice Improvement
- Resource Use