Heeding the cautions of the American Association of Family Physicians that small practices are not prepared for the Medicare Access and CHIP Reauthorization Act (MACRA), the acting head of the Centers for Medicare and Medicaid Services recently acknowledged the possibility of a delay in the new reporting requirements set to begin Jan. 1, 2017.
If you are a physician-owned practice, this announcement of a delay in reporting is no reason for complacency. MACRA payment adjustments will begin on Jan. 1, 2019, so now is the time to make some fundamental choices.
MACRA does not change the role of Medicare’s physician fee schedule. It simply establishes a new system to increase or decrease payments based on “value.” Under the unified framework of this quality payment program, eligible clinicians will be paid higher if they perform well, and lower if they do not perform well.
Small practices should take this extra time to explore their options for implementing the MACRA quality payment program. The most significant decision you will make is the choice between Advanced Alternative Payment Models (APMs) and the Merit-Based Incentive Payment System (MIPS).
APMs vs. MIPS
APMs and MIPS represent a fork in the road for Medicare providers, and the path you choose will have profound implications for the future of your small practice. In a nutshell, MACRA provides financial incentives for either: (1) high performance in MIPS; or (2) assuming risk in the APMs. Your choice does not need to be permanent; you can do MIPS in year one and then switch to an AMP in year two.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Which track is better for you? It depends, but we believe MIPS will be the best option for the vast majority of practices with one to 10 eligible clinicians.
What is MIPS?
MIPS combines elements of the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VPM), and the electronic health records Meaningful Use program into a single incentive payment system. Incentives and penalties under MIPS start at 4 percent can reach as high as 9 percent by 2022.
Clinicians will be measured on the Clinical Practice Score (CPS), a new composite measure of performance. The CPS has four components: quality, resource utilization, health technology, and clinical practice improvement. Although the weighting of these components will change over time, the emphasis initially is on quality measures that take the place of PQRS (50 percent of the total score).
For solo physicians and small practices, MIPS makes sense because it requires minimal investment in new technology. Whereas the accurate risk adjustment required by APMs may work for large enterprises, it remains completely untested for small practices.
What are APMs?
Clinicians who take a further step towards care transformation by participating in APMs would be exempt from MIPS payment adjustments and would qualify for higher payments through a 5 percent Medicare Part B incentive payment starting in 2026.
APMs are the path where clinicians accept both financial risk and reward for providing coordinated, high quality, and efficient care. Yes, there is an annual lump-sum incentive payment, but it can be “clawed back” if goals are not met – that’s the “shared” risk part.
Accountable Care Organizations (ACO) and Comprehensive Primary Care Plus are some examples of APMs in which small practices can participate. Patient-centered medical homes are not designated as APMs, but leading physician organizations asked CMS to add them to the list. At the time of this writing, no ruling has been made on this issue.
Why APMs may be wrong for small practices
As noted above, APMs require accurate risk adjustment. The larger the number of eligible clinicians and the larger patient populations, the more accurately risk can be predicted. In a small practice, a few patients with bad outcomes or higher resource utilization can put goals out of reach. In a very large enterprise, the negative effects of a few outliers has a smaller impact.
APMs also require more investment in new technology, such as patient portals, telemedicine tools and population health analytics, as well as more rigorous practice operational requirements.
For these two reasons—risk adjustment and technology investment—some small practices will be tempted to join an enterprise. However, there is really no guarantee of security, particularly if the enterprise itself has high costs or poor quality. That’s why many small practices will likely do better remaining independent with MIPS.
Survey of our users
Recent research surveyed small, independent practices about their attitudes toward the MACRA quality payment program. The results found that approximately 30 percent of our users participate in an ACO, so they will likely continue down the path to APM if their ACO qualifies for participation.
In terms of current payment incentive programs, about 50 percent of respondents plan to attest to Meaningful Use Stage 2, while about 70 percent will file PQRS reports. Based on these numbers, we predict that approximately 75 percent of small practices will move to the MIPS program.
No matter what decision you make over the next 30 months, do not become complacent about MACRA. Despite the proposed delay in implementation, by law, the date of payment adjustment remains Jan 1, 2019, which may sound far away now, but will be here before you know it.
Photo: Flickr user Alan Cleaver
