From MACRA to MIPS: The Impact of New Payment Systems on Providers

While it may have taken 17 years to repeal the Sustainable Growth Rate formula, according to Lemeneh Tefera, MD, MSc, Medical Officer at the Centers for Medicare & Medicaid Services (CMS), it was a surprisingly bipartisan bill.

“There is a lot of support for changing how payment for providers is done right now,” said Dr Tefera. “There’s been negative feedback about existing programs, and this is an opportunity for us to improve the programs for providers.”

The first step toward this reali­zation is the Medicare Access and CHIP Reauthorization Act (MACRA), which was passed into law on April 16, 2015, to provide a short-term “phase-in” to a new payment system for reimbursing Medicare physicians.

CMS quality improvement programs, including the Physician Quality Reporting System (PQRS), Value-Based Modifier (VM), and Electronic Health Records (EHR) incentive programs (“Meaningful Use” [MU]), will continue until the start of 2019. Separate application of payment adjustments under PQRS, VM, and EHR-MU will sunset December 31, 2018.

MIPS (Merit-Based Incentive Payment System)

Eligible professionals (EPs)—physicians, physician assistants, certified registered nurse anesthetists, nurse practitioners, clinical nurse specialists, and groups that include such professionals—can participate in MIPS or meet requirements to be a qualifying Alternative Payment Model (APM) participant.

“MIPS participants can receive positive, negative, or zero payment adjustments,” said Dr Tefera, “and if criteria are met, APM participants can receive 5% incentive payments for 6 years.”

Beginning January 1, 2019, CMS must assess performance for measures and activities in the following 4 performance categories: Quality (30%) (PQRS), resource use (30%) (VM), meaningful use (25%) (EHR-MU), and clinical practice improvement activities (15%). The composite performance score will then be used to determine and apply a MIPS payment adjustment factor for 2019 onward.

Once the MIPS Composite Performance Score is received, said Dr Tefera, a performance threshold will be established based on the mean or median of the composite performance scores during a prior period.

“The MIPS incentive payment formula is relative to threshold,” Dr Tefera explained. “EPs with performance scores below the performance threshold receive a negative payment adjustment factor between 0 and the negative of the applicable percent. EPs with scores below a number equivalent to one-quarter of the performance threshold receive the maximum reduction.”

Inversely, EPs with performance scores above the performance threshold receive a positive payment adjustment factor, with an additional adjustment for exceptional performance.

“Beginning in 2019,” said Dr Tefera, “$500 million is available each year (for 6 years) for EPs with scores above the additional performance threshold.”

How much can MIPS adjust payments? “In the near future,” said Dr Tefera, “based on the MIPS composite performance score, physicians and practitioners might receive a 9% bonus on their payments or a 9% penalty.…That’s reason enough to pay attention.”

APM Incentive Payments

APM incentive payments are for physicians receiving a significant share of their revenue through an APM that involves financial risk and quality measurement. EPs or groups of EPs meeting criteria to receive an APM incentive payment are excluded from the requirements of MIPS.

APMs are defined as a Centers for Medicare and Medicaid Innovation demonstration, a Medicare Shared Savings Program (ie, a Medicare accountable care organization), or certain other demonstration programs.

“Beginning in 2019 and for 6 years,” said Dr Tefera, “participating in an APM offers a 5% incentive payment made in a lump sum on an annual basis and a higher baseline update in 2026 and beyond.”

Related Items

Urology Practice Management logo
Subscribe to Urology Practice Management

Stay up to date with urology news & updates by subscribing to receive the free UPM print publications or e‑Newsletters.

UPM e-Newsletter
UPM print publication