From 1997-2015 Medicare physician payments were determined by the Sustainable Growth Rate (SGR), a formula which tied year-to-year payment updates to economic growth. The formula was widely recognized as deeply flawed, requiring yearly congressional action to stave off physician pay rate cuts. Growing calls for reform coincided with larger shifts in prevailing health care policy, namely the desire to move away from fee-for-service (FFS) based reimbursement as well as increased usage of health care information technology (HIT). In Spring 2015, Congress overwhelmingly passed the Medicare Access and CHIP Reauthorization Act of 2015 (Pub.L. 114-10), commonly known as MACRA, setting the groundwork for transitioning to a value-based purchasing system beginning in 2017. The law profoundly alters how and how much physicians will be paid for services furnished to Medicare beneficiaries and how physicians will interact with the program.
The Quality Payment Program
MACRA’s new payment structure is called the Quality Payment Program (QPP). It’s worth noting that this system does not concern ASC facility payments in any way, only those physician services reimbursed by Medicare. The QPP splits Medicare physicians into two payment paths: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). MIPS organizes several previous programs—the Physician Quality Reporting System (PQRS), the Physician Value-Based Payment Modifier and the Medicare EHR Incentive Program (Meaningful Use)—into a single performance scoring schema. Advanced APMs are unique care models such as bundled episodes of care, comprehensive care models and ACOs. Most physicians who practice in ASCs will not be eligible for any of the Advanced APMs, at least for now.
The Merit-based Incentive Payment System (MIPS)
MIPS replaces a number of previous programs under one roof, namely the Physician Quality Reporting System, Meaningful Use and the Physician Value-Based Payment Modifier. However, the goals of those programs live on in the four MIPS performance categories: Quality, Cost, Improvement Activities and Advancing Care Information (ACI). The four categories are weighted for scoring in relation to a physician’s total score. Currently, the weights are as follows:
- Quality: 50%
- Improvement Activities: 15%
- Advancing Care Information (ACI): 25%
- Cost: 10%
The Cost performance category is weighted at 0% for QPP Year 1 (2017), will be weighted at 10% for QPP Year 2 (2018) and at 30% for QPP Year 3 (2019) and beyond, barring a statutory fix.
Performance Scoring and Payment Adjustments
Reporting in the various categories translates to points on a scale of 0-100. For the 2017 reporting period, just three points will translate to a neutral adjustment (in 2019), and anything above will translate up to a maximum four percent positive adjustment. This three-point demarcation is called the performance threshold; scoring above the threshold translates to positive payment adjustments and vice versa. CMS finalized a performance threshold of 15 points for CY 2018, but for 2019 and beyond the threshold will be determined by either the mean or median of the previous year’s composite scores. The maximum possible payment adjustment will increase year to year, stabilizing at nine percent (up or down) for 2022 and beyond.
Non-participation will equal a negative four percent 2019 adjustment. Scoring above 70 points is considered exceptional performance, and those physicians will be eligible for additional positive payment adjustments pulled from a separate $500 million performance bonus pool.
Concerns for ASCs
Much of the ASC discussion regarding MIPS occurs around the Advancing Care Information performance category. ACI is the successor to CMS’ Meaningful Use program, which was designed to stimulate uptake of certified Electronic Health Record (EHR) technology. However, some physicians lack the face-to-face interaction and/or access to certified EHR technology (CEHRT) to make reporting under this performance category feasible. For example, there exists no ASC-specific certified EHR technology. Thus, ASC physicians as well as those physicians that furnish 75% or more of their services in a hospital outpatient department are exempt from the ACI category. The 25 percent category score is redistributed to the Quality performance category. This issue will be a focus for ASCA going forward, as the lack of ASC-specific CEHRT hampers the ability of our physicians to be assessed accurately under the MIPS payment adjustment formula. While ASCA works with stakeholders to develop criteria for an ASC-specific EHR certification, we will continue to advocate for solutions such as excluding ASC patient encounters from penalty calculations and reweighting of MIPS composite scores that will reduce the potential of negative payment adjustments.
Alternative Payment Models (APMs)
As an alternative to MIPS, physicians also have the option to participate in an Advanced Alternative Payment Model (AAPM). This alternative might appeal to many physicians, because those who participate are not required to report performance data through MIPS and will not be exposed to negative payment adjustments. Instead, at least for the first five years of the program (2019 through 2024), Medicare payments to physicians participating in AAPMs will be increased by five percent in addition to any gainsharing that may be available under the AAPM. Physicians participating in AAPMs also are eligible for higher annual payment inflation adjustments in the early years of the program.
To be exempt from MIPS and qualify for AAPM bonuses and updates, providers must participate in a qualifying program and meet certain participation thresholds. Surgeons are likely to have a limited number of AAPM participation opportunities in the early years. Surgeons practicing in an ASC environment may have even fewer options. To date, CMS has not proposed an ASC-based AAPM. CMS is establishing a process whereby physician groups, including specialty societies, can propose qualifying AAPMs, but those programs will not be immediately available as options. In recent comments, ASCA urged CMS to implement a request for proposals process that is flexible enough to address the needs of the wide range of surgical specialties that practice in the ASC environment.
There are a number of resources available to those wishing to learn more about MACRA, QPP or MIPS. For more information, please visit qpp.cms.gov, where CMS has provided the NPI participation tool, fact sheets and other resources. General information about the Medicare program can be found at cms.gov/Medicare. Please also feel free to reach out to Alex Taira at email@example.com with ASC-specific MACRA questions.