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MACRA 101: What is MACRA and the two payment models

11/22/2016  |  By: Katie Graham, CHC, Senior Manager, Healthcare/Compliance Consulting

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What is MACRA?

MACRA is the Medicare Access and CHIP Reauthorization Act of 2015, which was finalized on October 14, 2016. MACRA is Medicare’s most recent initiative to directly tie Medicare payments to patient quality outcomes since the Department of Health and Human Services (HHS) began launching quality initiatives in 2001. MACRA’s first performance year begins January 1, 2017 and will have a significant impact on all healthcare providers’ reimbursement. It is more important now than ever before to take the appropriate steps to maximize your potential for increased revenue and mitigate your risks of payment decreases.

There are two payment models presented in MACRA:

  • Advanced Alternative Payment Models (Advanced APMs)
  • Merit-based Incentive Payment Systems (MIPS)

Advanced Alternative Payment Models (Advanced APMs)

Advanced APMs are a subset of APMs created to allow practices to earn more reimbursement in exchange for an increased risk based on patient outcomes. By participating in an Advanced APM, a provider can potentially earn a 5% incentive payment.

To learn more about how to apply for an Advanced APM, you can visit https://qpp.cms.gov/learn/apms to further explore existing and new alternative payment models across the country.

Merit-based Incentive Payment Systems (MIPS)

The vast majority of providers will be eligible to participate in MIPS in 2017. MIPS will effectively merge many of the current quality programs that healthcare providers are familiar with, including Meaningful Use (MU), Physician Quality Reporting System (PQRS) and the Value-Based Payment Modifier (VBM).

MIPS Scoring Methodology

Each MIPS provider will receive a MIPS Score in 2017 based on the following categories:

Performance Category

% of Total Score

Quality (replaces PQRS)

60%

Advancing Care Information (ACI) (replaces MU)

25%

Clinical Practice Improvement Activities (CPIA) (new category)

15%

Cost (replaces VBM)

NA

CMS estimates approximately 90% of MIPS eligible clinicians will receive a positive or neutral payment adjustment. The below table illustrates the point system and associated (+/-) adjustment for 2017.

Final Score

MIPS Adjustment

0-0.75

-4%

0.76-2.9

Negative adjustment greater than -4% and less than zero

3.0

0%

3.1-69.9

Positive adjustment greater than 0 up to 4%

70-100

Positive adjustment (maximum) up to 4%, plus exceptional performance adjustment (greater than .5% up to 10%)

As physician practices look to close out the new year and begin planning for 2017, it will be imperative to have processes in place that capture the opportunity for increased revenue potential under this new ruling. With advanced planning, having a clear understanding and taking appropriate steps will allow you to mitigate risks for decreased payments and maximize opportunity for enhanced revenue. But, time is of the essence. Each day that goes by without a clear strategy can result in money being left on the table, so consult an expert today to put the right processes in place.

MIPS Options for Providers

MACRA’s Final Rule has declared 2017 as a Transition Year to allow providers to “pick their pace” of participation for MIPS first performance period. As such, clinicians may choose from the following options:

2017 Reporting Options

  1. Clinicians can choose to report in each performance category for a full 90-day period
  2. Clinicians can choose to report in each performance category for the full calendar year

     
    OR

  3. Clinicians can avoid a negative (-4%) payment adjustment by reporting one of the following for a full 90-day period in 2017:
    • One Quality measure
    • One ACI measure
    • One CPIA measure
Learn more about our MIPS/MACRA Consulting Services