United States: Medicare Access And CHIP Reauthorization Act Of 2015

Last Updated: August 1 2016
Article by Tracey L. Klein

President Obama signed into law the Medicare Access and CHIP Reauthorization Act ("MACRA") on April 16, 2015.  One year later, on April 27, 2016, the Department of Health and Human Services ("DHHS") released a 962‑page proposed rule to begin implementing MACRA.

MACRA, also known as the "doc fix," repeals the outdated sustainable growth rate ("SGR") formula for calculating Medicare payment rates to physicians.  MACRA replaces the SGR with a new payment update system, and creates two performance‑based payment adjustment pathways—alternative payment models ("APMs") and the merit‑based incentive payment system ("MIPS").

Background

Under Medicare, physician payment rates are based on the Medicare Physician Fee Schedule ("MPFS").  The MPFS assigns values to over 7,500 service codes that cover physician work, practice expenses and malpractice fees.  The MPFS is subject to annual updates.

  1. The SGR.  Before MACRA, MPFS's annual updates were governed by the SGR formula.  The SGR was enacted through the Balanced Budget Act of 1997 as a Medicare cost control system.  The SGR formula created a "target expenditures" number calculated from the number of fee‑for‑service beneficiaries and the estimated growth in the ten‑year average annual percentage change in the gross domestic product.  If actual physician expenditures exceeded target expenditures, physician payment rates were decreased; if physician expenditures fell below the target, physician payment rates were increased.
    In 2002, for the first time, physician expenditures exceeded target expenditures.  Therefore, the SGR formula mandated a 4.8% MPFS reduction.  Since 2002, physician expenditures have consistently exceeded target expenditures.  But, instead of implementing the SGR‑mandated payment cuts, Congress enacted a series of 17 laws ("doc fixes") to override reductions in physician payment rates.  Without these short‑term fixes, physician payment rates were to be reduced by 21% beginning on April 1, 2015.
  2. Pre‑MACRA Payment Modifiers.  Currently, physician payments are also modified by three separate quality measures—the physician quality reporting system ("PQRS"), the meaningful use of electronic health record technology ("MU") and the value‑based payment modifier ("VM").
  • PQRS—The PQRS incentive program increases payment to physicians who report data on various quality measures.
  • MU—The MU incentive program increases payment to physicians who meaningfully use certified electronic health record ("EHR") technology to improve the quality and coordination of care.
  • VM—The VM incentive program increases payment to physicians who provide quality care at a low cost.

Under MACRA, each of these measures will remain in effect until December 31, 2018.  Reporting periods for the measures end in 2016.  Beginning on January 1, 2019, the measures will be replaced by a new payment adjustment system.

MACRA's Physician Payment Provisions

MACRA, which consists of 62 provisions, will be incrementally phased in by 2026.  Title I of the statute modernizes the Medicare physician payment system in two primary ways.  First, MACRA repeals the SGR and replaces it with a new payment update system.  Second, MACRA creates two performance‑based pathways in which physicians will earn additional payment adjustments.

MACRA's provisions will apply only to "clinicians." MACRA defines a "clinician" as a physician, physician assistant, nurse practitioner, clinical nurse specialist, registered nurse anesthetist or any group that includes these professionals.  In future years, the definition of "clinician" will be expanded to apply to additional professionals.

  1. The New Payment Update System.  MACRA replaces the SGR's fluctuating payment update system with a schedule of fixed payment updates.  Beginning in January 2016, all Medicare clinicians will receive the following payment updates:
  • January 1, 2016—December 31, 2016: 5%
  • January 1, 2017—December 31, 2017: 5%
  • January 1, 2018—December 31, 2018: 5%
  • January 1, 2019—December 31, 2019: 5%
  • January 1, 2020—December 31, 2020: 0%
  • January 1, 2021—December 31, 2021: 0%
  • January 1, 2022—December 31, 2022: 0%
  • January 1, 2023—December 31, 2023: 0%
  • January 1, 2024—December 31, 2024: 0%
  • January 1, 2025—December 31, 2025: 0%

In January 2026, the payment update system will diverge into two separate payment update systems—one for qualifying APM participants, and one for MIPS and partial‑qualifying APM participants.  Qualifying APM participants will receive an annual 0.75% payment update from 2026 onward; MIPS and partial‑qualifying APM participants will receive an annual 0.25% payment update from 2026 onward.

The Performance‑Based Pathways.  Beginning in 2019, clinicians will receive an additional payment adjustment from one of two possible pathways:  advanced APMs and MIPS.  A clinician must participate in either an advanced APM or MIPS, but not both.

(a)   Advanced APMs.  One pathway to payment adjustments is participation in an advanced APM.  The APM pathway is more difficult than the MIPS pathway because of the rigorous requirements involved.  However, clinicians who choose the advanced APM pathway will receive more incentives than those who choose MIPS.

An advanced APM is a payment model that requires a clinician to accept risk for providing coordinated, high‑quality care.  A payment model must meet three criteria to qualify as an advanced APM.  It must:

  • assume meaningful financial risk (or be a medical home model under Center for Medicare and Medicaid Innovation ("CMMI") authority);
  • use EHR technology; and
  • use quality measures comparable to those used by MIPS.

Existing advanced APMs include the Comprehensive ESRD Care Model, Comprehensive Primary Care Plus, Medicare Shared Savings Program, Next Generation ACO Model, Patient‑Centered Medical Homes, and Oncology Care Model Two‑Sided Risk Arrangement.  While few APMs exist, MACRA established the Physician‑Focused Payment Models Technical Advisory Committee to aid in the development of new APMs so that clinicians will have more opportunities to participate.

However, it is not enough for a clinician to simply participate in an advanced APM to receive incentives through the APM pathway.  Instead, a clinician must be a qualifying APM participant or a partial‑qualifying APM participant.

(i)  Qualifying APM Participants.  To receive maximum incentives through advanced APM participation, a clinician must be a qualifying participant ("QP").  A clinician is a QP if the clinician receives a certain threshold of Medicare payments or patients through an APM during a given year.  Over time, the threshold will increase, making it more difficult for clinicians to become QPs.

In the given year, a clinician must receive the following minimum percentage of either payments or patients through an advanced APM entity:

  • Payments:
  • 2019—25%
  • 2020—25%
  • 2021—50%
  • 2022—50%
  • 2023 and later—75%
  • Patients:
  • 2019—20%
  • 2020—20%
  • 2021—35%
  • 2022—35%
  • 2023 and later—50%

Under MACRA, if a clinician meets the requirements to be a QP, the clinician will receive three incentives.  First, between 2019 and 2024, QPs will receive annual 5% payment bonuses.  Second, beginning in January 2026, QPs will receive 0.75% annual payment updates.  Lastly, QPs will be exempt from MIPS.

(ii)  Partial‑Qualifying APM Participants.  A partial‑qualifying APM participant is a clinician who receives Medicare payments through an advanced APM but does not meet the minimum payment or patient thresholds.  A partial‑qualifying APM will not receive the 5% bonuses or the 0.75% payment updates.  However, a partial‑qualifying APM may opt out of MIPS participation.

(b)  MIPS.  MIPS is the second pathway to annual payment adjustments.  In 2019, MIPS will replace the PQRS, MU and VM programs with a single payment adjustment system.  Unlike the APM pathway, MIPS adjustments are not fixed and are not automatic.  Clinicians will earn payment increases (or decreases) through performance.

(i)  MIPS Eligible Clinicians.  MIPS will apply to any MIPS eligible clinician ("MEC").  An MEC is any physician, physician assistant, nurse practitioner, clinical nurse specialist, registered nurse anesthetist or a group of these individuals.  Most individual MECs will elect to participate in MIPS as a group MEC.  However, clinicians may participate in MIPS as individuals.

Some otherwise‑eligible clinicians will be exempt from MIPS.  They include:

  • Qualifying or partial‑qualifying APM participants
  • Clinicians who are new to Medicare
  • Low‑volume practitioners (practitioners with less than $10,000 in Medicare claims or less than 100 patients)

(ii)  Calculation of the Composite Score.  The size of an MEC's MIPS payment adjustment will depend on the MEC's performance in four weighted categories during the "performance period."

The performance period will occur two years prior to the application of that score to the MEC's payment.  The first MIPS performance period will begin on January 1, 2017 and run through December 31, 2017.  The score derived from the MEC's performance during that period will be applied to the MEC's 2019 payment.

Each MEC will be scored on its performance in quality, advancing care information, resource use and clinical practice improvement activities ("CPIAs") categories.  The scores from each measure will be aggregated by the Centers for Medicare & Medicaid Services ("CMS") to arrive at a single composite score for each MEC.  Composite scores may range from 0 to 100, with 100 as a perfect score.

CMS will then aggregate the composite scores of all MECs and calculate the mean or median (to be decided by the Secretary of DHHS).  The mean or median will serve as the "threshold score." If an MEC's composite score is higher than the threshold score, the MEC will receive a payment increase; if the MEC's score is below the threshold score, the MEC will receive a payment decrease.

The payment adjustment to which an MEC may be subject will increase over time:

  • 2019—+/‑ 4%
  • 2020—+/‑ 5%
  • 2021—+/‑ 7%
  • 2022 and after—+/‑ 9%

The size of payment adjustment that an MEC receives will depend on the distance of the MEC's composite score from the threshold score.  If an MEC's composite score is close to the threshold, the percentage adjustment will be minimal; if the composite score is far from the threshold, the adjustment will be closer to the maximum.  For example, if, in 2019, the threshold score is 50 and an MEC receives a composite score of 55, the MEC's payment increase will be negligible.  However, if the MEC receives a composite score of 90, it will likely see a payment increase close to 4%.  If the MEC receives a composite score of 10, it will likely see a payment decrease close to 4%.

MIPS also provides additional payment increases to exceptional performers.  An MEC whose score falls into the 25th percentile of all composite scores will fall into this category.  Exceptional performers may receive an additional payment increase of up to 10%.  Thus, in 2019, an exceptional performer could receive a total payment increase of 14%.

(iii)  The MIPS Performance Categories.  An MEC's composite score will be based on performance in the abovementioned four weighted categories.  The weight assigned to each category will change over time.

[a]   Quality.  The quality performance category will account for 50% of the MIPS composite score in 2019.  This category replaces PQRS but adopts the majority of the PQRS measures.  Within the quality category, MECs must report on 6 quality measures (versus the 9 measures currently required) from a list of over 200 measures.  The list will be published by the Secretary of DHHS in November of each year.  The broad list of measures is intended to provide MECs flexibility to choose the measures most meaningful to their practice.  MECs will choose from three categories of measures:  cross‑cutting measures, outcome measures and high‑priority measures.  MECs will be required to report on at least one cross‑cutting measure and one outcome measure.

While the Secretary of DHHS has not yet published the list of measures for 2019, the measures will likely address topics such as patient safety, patient‑ and caregiver‑centered experience and outcomes, communication and care coordination, effective clinical care, community and population health, and efficiency and cost reduction.

[b]  Advancing Care Information.  The advancing care information category will account for 25% of the MIPS composite score in 2019, and replaces the MU program.  To perform well in this category, MECs will be required to begin or continue to use certified EHR technology.

The advancing care information score will be based on two components:  a base score and a performance score.  A clinician may achieve a maximum of 50 points in the base score and 80 points in the performance score.  While it is possible for a clinician to achieve a score of 130, a clinician's score will be deemed perfect if it is 100 or above.

The base score component will require yes/no or numerator/denominator responses to each of six categories.  MECs must answer "yes" in the yes/no categories to receive full credit.  The categories include:

  • Protect patient health information (yes/no)
  • Patient electronic access (numerator/denominator)
  • Coordination of care through patient engagement (numerator/denominator)
  • Electronic prescribing (numerator/denominator)
  • Health information exchange (numerator/denominator)
  • Public health and clinical data registry reporting (yes/no)

The performance score component will permit MECs to report on eight measures from three different objectives.  Each measure will be worth 10 points, allowing for a maximum 80‑point score.  Because MECs need only 50 points to receive a perfect performance score, MECs will have flexibility in focusing on only those measures most relevant to their practice.  The point calculation will correspond to the MEC's performance rate.  Thus, if an MEC scores a 55% on the measure, the MEC will earn 5.5 points towards its performance score.  The eight measures will include:

  • Patient electronic access objective
  • Patient access measure
  • Patient‑specific measure
  • Coordination of care through patient engagement objective
  • VDT measure
  • iSecure messaging measure
  • Patient‑generated health data measure
  • Health information exchange
  • Patient care record exchange measure
  • Request/accept patient care record measure
  • Clinical information reconciliation measure

[c]                Resource Use.  The resource use category will account for 10% of the composite score in 2019 and will replace VM.  Resource use is intended to determine which MECs are providing high‑quality care at a low cost.  It is solely claim‑based, and therefore will require no additional reporting for MECs.

CMS will continue to use two VM measures—total cost per capita for all attributed beneficiaries and total Medicare spending per beneficiary ("MSPB")—as the basis for scoring.  However, MECs in a specialty practice will be scored with "episodic measures" to ensure "apples‑to‑apples" comparisons.

[d] CPIAs.  The CPIA category will account for 15% of the composite score in 2019.  A CPIA is defined as an activity that improves clinical practice or care delivery, and that is likely to result in improved health outcomes.

Any MEC that is certified as a patient‑centered medical home will automatically receive a perfect score in the CPIA category.  For all other MECs, the CPIA score will be based on measures from two weighted categories:  medium performance and high performance.  In order to achieve the highest potential score of 60 points, an MEC must choose 3 high‑weighted CPIAs (at 20 points each), 6 medium‑weighted CPIAs (at 10 points each) or some combination of the two for a total of 60 points.  MECs must perform each activity for at least 90 days during the performance period to receive credit for that activity.

The Secretary of DHHS will establish a broad list of activities from which clinicians may choose.  However, activities will fall into the following categories:

  • Expanded practice access
  • Population management
  • Care coordination
  • Beneficiary engagement
  • Patient safety and practice assessment
  • Participation in an APM
  • Achieving health equity
  • Emergency preparedness and response
  • Integrated behavioral and mental health

Important Dates

MIPS payment adjustments will begin to apply in 2019.  However, the MIPS performance period will begin on January 1, 2017 and run through December 31, 2017.  For the 2017 performance period, MECs must report all applicable measures to CMS by March 31, 2018.  Additionally, clinicians must submit claims within 90 days of the close of the performance period.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Tracey L. Klein
Similar Articles
Relevancy Powered by MondaqAI
Carlton Fields
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Carlton Fields
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions