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Final MACRA Rule Released by CMS

October 19, 2016


In an e-Alert released last month, we noted that the Centers for Medicare and Medicaid Services (CMS) would soon be issuing a final rule relating to the Medicare Access and CHIP Reauthorization Act (MACRA).  That final rule was issued this past Friday, and includes changes and clarifications responsive to over 4,000 public comments.


"This is a landmark effort to move the healthcare system forward," CMS Acting Administrator Andy Slavitt said at a Friday teleconference.  "Transforming something of this size is something we focused on with great care.  The policy we finalized is the result of the user-driven policy effort where our staff put down our pens and went into the field to hear from physicians and patients.  Overall, the comments we received from across the country can be summed up this way:  Make the transition to MACRA as simple and as flexible as possible," he said.


CMS made five specific policy changes in the final rule to create a more unified program:


  • More flexible options in the first year;
  • Adjustment of the low-volume threshold for small practices;
  • Establishing the advanced Alternative Payment Model (APM) as a standard to promote participation in value-based care models;
  • Simplifying "all-or-nothing" Electronic Health Record (EHR) requirements; and
  • Establishing the medical home model to promote care coordination.


Under the final rule, physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists who bill Medicare more than $30,000 a year or provide care for at least 100 Medicare patients qualify for MACRA.  The draft rule set the threshold at $10,000 a year, which the American Medical Association (AMA) found would affect about 16 percent of all clinicians eligible for the Merit-Based Incentive Payment System (MIPS).  The threshold in the final rule would exclude 30 percent of physicians, according to the AMA analysis.  CMS estimates that 380,000 clinicians will be exempted from the new payment models because of their low volume of Medicare patients and billing.


For providers new to Medicare in 2017, participation is not required next year.


The final rule includes two pathways for provider participation: the MIPS, and the advanced APM.  The vast majority of providers will take the MIPS pathway designed for providers in traditional, fee-for-service Medicare.  The advanced APM pathway is designed for providers who are participating in specific value-based care models.


The final rule states that to qualify, advanced APMs must meet three requirements:  Use certified EHR technology, base payments on quality measures comparable to MIPS and require providers to bear more than nominal risk.  Beyond that, advanced APMs must also be an approved model by CMS.  As mentioned in our e-Alert last month, only about four to 11 percent of clinicians currently qualify for participation in advanced APMs, according to a Brookings Institution report, How the Money Flows Under MACRA.


CMS has also indicated that it plans to create additional pathways for participating in the advanced APM track, including a new accountable care organization Track 1+ model, the Comprehensive Care for Joint Replacement model and the Medicare Diabetes Prevention Program.  CMS plans to add these programs in 2017 or 2018.  Participation in an advanced APM allows physicians to earn a five percent lump sum incentive payment each year from 2019 through 2024, and avoid MIPS reporting requirements and payment adjustments.


The MIPS pathway rolls together and sunsets three legacy CMS programs:  Meaningful Use, the Physician Quality Reporting System and the Value-Based Payment Modifier.  Physicians will earn payment adjustments based on performance in four categories linked to quality and value that will be similar to the previous programs.  Payment adjustments will be neutral, positive or negative up to four percent in the first year, increasing to nine percent by 2022.  The rule provides for a gradual ramp to full participation, allowing physicians to pick their pace between the following four options in 2017.


  • No participation and an automatic four percent negative payment adjustment;
  • Submission of a minimum amount of data and a neutral payment adjustment;
  • Submission of 90 days of data for a potential small positive payment adjustment or a neutral adjustment; and
  • Submission of a full year of data for the potential to earn a moderate positive payment adjustment.


A significant clarification provided during CMS's briefing on Friday is that MACRA is not a revenue-neutral program.  "It has some revenue-neutral features, but it has additional elements," said Slavitt.  Those items include the 0.5 percent positive payment adjustment across the board, a five percent bonus for advanced APMs in addition to earned quality dollars, and a total $5 million in bonuses for top performers in the MIPS program.


CMS is offering providers the option to start collecting performance data anytime between January 1 and October 2, 2017, but regardless of start time, data is due to CMS by March 31, 2018.  The data collected in the first performance year will determine payment adjustments beginning January 1, 2019.


Based on feedback from providers, CMS is also offering an option for small practices and solo physicians to join in virtual groups and submit combined MIPS data.  The final rule also allots $20 million a year for five years earmarked for training and education of physicians in practices of 15 or fewer and those who work in underserved areas.  Beginning December 2016, local organizations will offer free, on-the-ground, specialized help to small practices using this funding.


AMA president Andrew W. Gurman, MD issued a positive response to the news stating:  "Our initial review indicates that CMS has been responsive to many of the concerns raised by the AMA, and in the days ahead, the AMA will conduct a comprehensive review of the final rule to ensure that it promotes flexibility and innovation in the delivery of care to help meet the unique needs of all patients.  With the flawed sustainable growth rate formula—and its annual threat of steep payment cuts—permanently eliminated, the new law gives many physicians the opportunity to be rewarded for the improvements they make to their practices and for delivering high-quality, high-value care to Medicare patients."


CMS will be conducting MACRA webinars on October 26 and November 15, providing an overview of the MIPS and Advanced APM under MACRA, collectively referred to as the Quality Payment Program.  CMS has also launched a Quality Payment Program website to help clinicians identify the measures most meaningful to their practice or specialty, and have set up a website to accept public comment on the final rule, which will be open for the next 60 days.

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