This article originally appeared at Modern Healthcare (http://www.modernhealthcare.com/article/20160813/MAGAZINE/308139982) on Aug. 13, 2016.
By Shannon Muchmore | August 13, 2016
Hospital boardrooms are beginning to sound more like those on Wall Street, with talk of upside and downside risk, capitation and a hefty addition of new acronyms.
Hospitals, health systems and physician groups are now in the process of deciding which of the two possible reimbursement paths they will take under the Medicare Access and CHIP Reauthorization Act, which replaced the rarely implemented sustainable growth-rate formula for determining physician pay.
“This is not practice as usual,” said Aric Sharp, vice president of accountable care at UnityPoint Health, based in West Des Moines, Iowa. “This is not what we've done for the past 10 to 20 years in group practice. This is a whole new world.”
There was much rejoicing in April 2015 when Congress replaced Medicare's extremely unpopular SGR formula with an overwhelmingly bipartisan vote. The focus, however, was far more on the joy of getting rid of the annual doc fix to payment rates and all of its frustrations than it was on the system now set to replace it—MACRA.
Under MACRA, providers will use either the Merit-based Incentive Payment System, known as MIPS, or an alternative payment model. Under MIPS, physician payments will be based on a compilation of quality measures and the use of EHRs. HHS will announce the eligible measures, and providers will have some options on which to report. More on how this will work is expected in the final rule, which is likely to be published in November.
About 90% of physicians are expected to take this path.
MIPS consolidates three highly unpopular incentive pay programs: the Physician Quality Reporting System, or PQRS; the Physician Value-based Payment Modifier; and the electronic health record meaningful-use program. Providers will now be graded on quality, resource use, clinical practice improvement and meaningful use of certified EHR technology. Medicare revenue would be affected by as much as 4% in 2019, the first year the payment changes take effect, and increase to up to 9% in later years.
Most providers will choose MIPS because they are not ready to take on the other option, a qualifying alternative payment model that requires a hefty amount of risk. Many don't have the capital to set one up or to risk losing money with subpar performance. Although MIPS requires putting some profits on the line, it is much less of a gamble than heading into an APM without experience and confidence that quality measures are high.
But a few large groups are planning to accept payment adjustments based on their performance under already existing alternative payment models. To qualify for that track, providers must bear “more than nominal financial risk.” They will receive a lump sum incentive payment and higher annual provider payment as benefits. They will also be exempt from the MIPS reporting measures.
UnityPoint decided relatively early on that it would participate in an APM because of the success of the Pioneer accountable care organization in one of its regions. The system's other eight regions were in track one of the Medicare Shared Savings Program, and that track is not eligible as an APM under MACRA.
Most physicians and physician practices will opt for being measured on quality under Medicare's new payment system since they're not ready to assume the downside risk of alternative payment models.
The system began its shift toward value-based pay about five years ago and has extensive experience with taking risk. Executives viewed MACRA as a nudge to push themselves toward an APM model because they believe the change is necessary and inevitable, Sharp said. “It could continue to move our culture forward from volume-based to value-based and that was very important to us,” he said.
But most physicians aren't ready to take on that level of risk. Dr. Lisa Bielamowicz, chief medical officer of the Advisory Board Co., said the “average doctor on the street can barely tell you what MACRA is.” And indeed, a survey released in July by Deloitte found that about half of nonpediatric physicians had never even heard of MACRA, much less understood its implications.
Many doctors still have basic questions about MACRA and are looking to join with a large health system to help them navigate the change, Bielamowicz said. Those who have already been reporting for PQRS have EHRs set up for reporting data for MIPS and can continue to use the the PQRS qualified clinical-data registry.
The transition to MIPS may not be too difficult for those groups that have been pursuing value-based payment methods previously and have reporting mechanisms in place. But APMs are a different story.
Blair Childs, vice president of public affairs at the healthcare consulting company Premier, said moving to an alternative payment model is a big step that many providers are not ready to take. Some may just plan to stay in MIPS for the foreseeable future.
No matter what path they choose, physician practices, whether part of a hospital system or independent, will have major decisions to make in the months ahead. Will they report as individual physicians or as a group with a tax identification number? Will they report with claims, through a clinical registry or with another method? Which measures will they report?
MIPS participants will choose at least six PQRS measures to be graded on along with two or three (depending on the group size) population quality measures. They can also choose which clinical practice improvement activity categories to report, so long as they select a certain number of medium- and high-weight measures.
Childs said that although staying in MIPS is a viable choice for some practices not poised to accept risk, most larger providers should consider moving toward the APM models because that is the push from the CMS. Also performance benefits from MIPS drop off in later years.
Organizations also need to consider how they will be supporting their community of physicians and helping them succeed with the new model, Childs said. Most of those who choose MIPS should begin trying to transition to an APM—perhaps a no-risk track ACO—so that the eventual change is as smooth as possible. “It's a question of how you want to scale and how you want to build your model,” he said.
Though data collection that will affect 2019 payments is slated to start next year, CMS acting Administrator Andy Slavitt hinted at the possibility of a delayed start date, particularly for small and rural providers, at a recent Senate Finance Committee hearing. “Some of the things that are on the table, (that) we're considering include alternative start dates, looking at whether shorter periods could be used, and finding other ways for physicians to get experience with the program before the impact of it really hits them,” he said.
But the CMS is now pushing back against the idea that it will delay implementation. In a Q&A with Modern Healthcare, Slavitt said any accommodations would be announced in the final rule. “I didn't intend to makes news when I said we're going to find a way to get this off to the right start,” he said. “That's not the same thing as a delay. There are lots of ideas that have come to us and we are considering all of them.”
Donald Crane, CEO of California-based CAPG, a group representing more than 250 physician organizations that have focused on coordinated and accountable care models, said provider groups trying to decide which path to pursue should look at how they're performing in the PQRS and other current programs. They should also look at others in their region, particularly if there is a powerhouse health system that is expected to be ready and perform well. Because providers receive bonuses or penalties based on how they perform relative to others in the area.
Key areas will be providers' ability to practice successful care management, determine population health and outliers from collected data, and perform outreach to patients, he said.
Dr. Scott Hines, chief quality officer with Crystal Run Healthcare, a large group practice based in Middletown, N.Y., said the big question for providers choosing between MIPS and APMs will be how much risk they're willing to take on. The CMS is moving away from options that allow doctors to see rewards for quality performance without also risking penalties for poor performance. “I think it's very important early on to determine your appetite for risk,” he said.
MACRA is a particular challenge for small and rural providers, who have been protesting the aggressive timeline. Small provider groups lack the capital, infrastructure and flexibility to quickly adapt to MACRA's requirements. The data-reporting requirements alone are simply not feasible for many, Hines said.
The proposed rule included a table that estimated about 60% of practices with between two and nine eligible clinicians would be subject to a negative payment adjustment in 2019. The rate for solo practitioners was a whopping 87%. “That is the number that really shakes the independent doctor when you show that to them,” Bielamowicz said.
Slavitt has argued that the table is misleading because it uses data from 2014, when most solo and small practitioners were not reporting. He has often acknowledged that small practices will face a challenge, though, and has announced some efforts to make their transition easier.
Physicians will be able to join “virtual groups” and report their MIPS information together. The CMS will also offer them technical assistance and impose fewer reporting requirements on them. Bielamowicz said doctors at small groups are quick to ask about joining a larger group or hospital. The switch to MACRA will be difficult for them unless they affiliate, but that doesn't necessarily mean they need to be directly employed by a hospital or health system. “They're really just seeking a buffer,” she said, “somewhere to offload that risk.”
One issue that has frustrated and baffled many providers is the strict requirements needed for a system to qualify as an alternative payment model. Shared-savings ACOs without downside risk don't qualify.
Childs said small providers are likely to have the most success if they work together to form clinically integrated networks. That way they can pool resources for technical infrastructure and tasks like data gathering and analysis.
Small providers in rural areas face an even bigger challenge, he said. “It's not impossible but you have to get a group of these critical-access hospitals to get a patient population large enough to spread the risk,” he said.
Many advocacy groups such as the American Medical Association, American Academy of Family Physicians and Medical Group Management Association have been pushing the CMS to delay MACRA implementation. But CAPG, which represents several physician groups, has written to the CMS asking that the original timeline be honored. Crane said a delay would be a financial blow to many providers that have been diligently preparing for MACRA.
MIPS is similar to the three programs it replaces, which actually had stiffer penalties. And since MIPS rewards or penalizes based on performance relative to other providers, a delay wouldn't necessarily offer an advantage. “They might get more ready, but so too might some of the competitors in their pool,” he said.
In any case, pushing the start date would only be forestalling the inevitable. “MACRA is going to force considerable change, all of it in the right direction,” Crane said. “It'll be tough, but it's what the doctor ordered and what we want. And over a number of years, we'll successfully do it.”