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MACRA, MIPS, and APMs Understanding the move to value-based reimbursement

Submitted Monday, April 4th 2016 10:41 am by Paul Andres
in  pay for value    value-based reimbursemwent    macra    mips    apms    cms    fee-for-service  

"It's not about the cards you're dealt, but how you play the hand."  - Randy Pausch, the Last Lecture

Seems like not too long ago we were all fixated on the annual near-catastrophe called the Sustainable Growth Rate (SGR).  Every quarter of the healthcare world would lament the impending 26% cut in Medicare reimbursement, calling for a permanent "doc fix."   Then, in April of 2015, The Medicare Access and CHIP Reauthorization Act of 2015 #MACRA was signed into law, doing away with the SGR and charting a path toward value-based reimbursement.   Suddenly, independent physicians are nostalgic for the good old days when fee-for-service-based reimbursement, however tenuous, was the devil you knew.

Value-based reimbursement aka Pay for Value is nothing new, of course.  #PQRS started as PQRI; the Medicare Value-based payment Modifier predates MACRA; and of course the Meaningful Use EHR incentive has been around for years.

MACRA rolls all three programs into a single push toward value-based reimbursement via the Merit-Based Incentive Payments System (MIPS).   Under #MIPS, physicians and practitioners will be scored in four weighted performance categories which will yield a MIPS composite performance score.  Reimbursement will be adjusted above or below the Medicare fee schedule based on the composite score (more on that later).  MACRA provides exceptions to MIPS for first year providers, clinicians below a low volume threshold, and for those participating in Alternative Payment Models (APMs).

The four MIPS performance categories are as follows:

  • Quality
  • Resource Use
  • Clinical practice improvement activities
  • Meaningful use of certified EHR technology

The resulting composite score is used to determine and apply a payment adjustment, beginning in 2019.

What are APMs?

#APMs are new approaches to paying for medical care (Medicare) that incentivize quality and value, with the most advanced APMs including an element of shared risk.  Eligible APMs offer greater potential rewards, but come with greater potential risks than MIPS.  Examples of APMs are ACOs, patient centered Medical Homes, the Medicare Shared Savings Program, and some bundled payment models. 

In a nutshell, eligible APMs will pay qualifying participants 5% lump sum bonus payments and a higher fee schedule for 2026 and onward; however, only the most advanced APMs will be eligible.  Providers participating in non-eligible APMs will receive favorable scoring in MIPS, and may qualify for APM-specific rewards.

Level the playing field?

There may be a silver lining to MACRA.  Recent years have seen independent medical providers lose leverage when negotiating payor contracts, as they simply do not have the patient volumes needed to demand better terms.  Additionally, small practices only know what payors are paying them, whereas the payors know what they are paying the independent practices, as well as the independent's competition.  Ironically, a value-based reimbursement structure may serve to level the playing field as payments are increasingly tied to quality and efficiency.   To sign up for additional value-based payment content as it becomes available, click here.

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