MACRA: What Does This Mean for Your Organization?

July 2016 | Article

With the buzz of activity and information in the industry surrounding the upcoming implementation of the Medicare Access and Chip Reauthorization Act (MACRA) of 2015, it is evident that this is a game changer for physician reimbursement. What may not be so clear is what it means for your organization. Your leadership team may be working through questions such as: What is the financial impact of MACRA? How do we prepare? Who do we need to get involved in our preparation efforts? Should we even begin preparing?

In the proposed rule released by CMS earlier this year, the suggested initial reporting period would begin on Jan. 1, 2017. This reporting period will affect Medicare fee-for-service (FFS) payments in the 2019 reimbursement year. MACRA repeals the Sustainable Growth Rate formula and consolidates components of the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier, and the Medicare Electronic Health Record Incentive Program. 

There are two payment tracks within MACRA: Merit-Based Incentive Payment System or MIPS, and Advanced Alternative Payment Models or APM.

Under MIPS, each clinician receives a composite performance score based on quality, resource use, clinical practice improvement activities and advancing care information. This composite performance score determines the positive or negative adjustment to Medicare FFS reimbursements. 

The APM track requires physicians to: Meet specific criteria based on use of certified Electronic Health Record technology, receive payments based on pre-defined cost/utilization and quality measures, and bear nominal risk, if not part of a Medical Home Model. Physicians in the APM track are poised to receive incentives beginning in the 2019 reimbursement year. It is estimated that the majority of physicians will be part of the MIPS track for the first reporting year.

Earlier this month during a Senate Finance Committee meeting, CMS acting administrator Andy Slavitt discussed a possible delay of the start date for MACRA, leaving organizations wondering if they should delay their preparations for MACRA. This comment was in response to concerns that some physicians are not prepared for MACRA and special focus has been placed on the preparedness of small practices to avoid negative reimbursement adjustments.

CMS' estimated impact on total allowed charges by practice size show that the largest negative impact is forecasted to affect organizations with 25 or less physicians (see page 215 of the PDF). It is estimated that the negative adjustment for this physician group size will be more than $600 million. Knowing the financial stress this will place on small physician practices, it's clear that the time is now to prepare to be successful under MACRA.

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