Significant Changes to Medicare Reimbursement Underway

Health Care   |   January 18, 2017
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Much is still unknown about the impact of the election on healthcare.  But one thing is certain:  As health care costs continue to rise and the baby boomer generation ages, the government will keep pursuing innovative payment arrangements to encourage delivery of the highest-quality, lowest-cost care.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), bipartisan legislation that replaced the flawed Sustainable Growth Rate, is the most significant change to Medicare provider reimbursement in a generation, and part of a broader strategy to deliver high-quality care at a lower cost.

Beginning January 1, 2007, Medicare Part B clinicians who bill Medicare more than $30,000 a year and provide care for more than 100 Medicare patients annually arc subject to MACRA.  Clinicians subject to MACRA must choose between taking part in the Advanced Alternative Payment Models (Advanced APMs) or the Merit-based Incentive Payment System (MIPS).  Both paths require clinicians to adhere to certain quality and technological standards, and take on financial risk.

Advanced APMs

Clinicians receiving 25 percent of Medicare payments or seeing 20 percent of Medicare patients through an Advanced APM need only submit their quality information to the Centers for Medicare and Medicaid Services (CMS).  CMS has started announcing which alternative payment models will qualify as Advanced APMs in 2017.  So far, they include:  “Comprehensive ESRD Care - Two-Sided Risk;” “Comprehensive Primary Care Plus (CPC+);” “Next Generation ACO Model;” “Shared Savings Program - Tracks 2 and 3;” and the “Oncology Care Model - Two-Sided Risk.”  Clinicians participating in the Advanced APM track will earn a five percent incentive payment.


Clinicians choosing to participate in traditional Medicare Part B, rather than an Advanced APM, will participate in MIPS, and are at risk for negative payment adjustments.  MIPS-participating clinicians will be rated on a continuous 100-point scale composed of four performance categories:

  1. Quality (60 percent for 2017, 50 percent for 2018);
  2. Advancing Care Information (25 percent);
  3. Clinical Practice Improvement Activities (15 percent); and
  4. Resources Use (zero percent for 2017, 10 percent for 2018).

Each point below or above the threshold translates proportionally into financial impacts.  Providers earning a score above an annual performance threshold set by CMS receive an incentive, whereas those scoring below the threshold are assessed a penalty.  CMS will publicly report MIPS scores annually.

Due to the operational burden associated with MACRA implementation, CMS eased 2017 MACRA requirements.  As long as participating clinicians submit a minimum amount of 2017 data by March 31, 2018, they will avoid a downward payment adjustment.  Financial risk is set to fully begin in 2018.

While it remains unclear how President-elect Trump and a Republican-controlled Congress will affect healthcare, there appears little incentive to repeal MACRA, as the legislation passed with significant bipartisan support.  Although repealing the Affordable Care Act could affect how alternative payment models under MACRA are defined and vetted, with MACRA in place, Medicare Part B billing providers will soon begin accepting financial risk.

Originally published in Hillsborough County Bar Association “Lawyer” Magazine, Vol. 27, Issue 3 (January-February 2017).

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