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Healthcare Reform

Know Your “MACRA-bet” – A guide to the acronyms of MACRA

Healthcare reform is definitely not kindergarten. By now, every physician is aware of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) — the most significant and far-reaching change to Medicare since its inception in 1965 — but few truly understand the magnitude of the changes that came with the calendar flip to 2017 and how it will impact them.

Understanding MACRA, which itself contains an acronym within an acronym, requires working knowledge of its many components, so we’ve put together a “MACRA-bet” guide to understanding the “alphabet soup” of Medicare reform for your quick reference and learning.

But first, the basics.

Lesson 1: What is MACRA?

At the most basic level, MACRA moves away from the ‘fee for service’ payment model, offering instead monetary incentives for physician participation in risk-designated and coordinated care models of reimbursement. Yet, Deloitte consultants found in a recent survey that over 50 percent of physicians do not understand MACRA at this basic level, so imagine the difficulty that healthcare officials face in determining the best investment in time, resources, technology and education to bring physicians and revenue cycle leaders up to speed.

The final ruling for MACRA came in at the end of 2016, which means the first performance year is already in progress, impacting payments in 2019. All physicians  will report under MACRA in 2017 in one of two payment models offered: Merit-based Incentive Payment System (MIPS) or Alternative Payment Model (APM). The only exception occurs for physician practices with a very low volume of Medicare claims.

If you don’t yet know MIPS from APM, keep reading.

Got a solid grip on your MACRA-bet? Then you're ready to revamp your self pay strategy with our eBook. Click to download!

Lesson 2: Learn your “MACRA-bet”


As you research to get up to speed on MACRA, use this guide to walk you through the acronyms of Medicare reform. Side note: While you might expect our guide to be in alphabetical order, it’s not, intentionally. Read it from the beginning, and we promise you’ll have a tighter hold on MACRA better by the time you reach the end.

CMS: Centers for Medicare and Medicaid Services
The “who” behind MACRA. CMS is part of the US Department of Health and Human Services and is responsible for (among many things) administering MACRA. CMS makes the reimbursement decisions by analyzing the reporting from physicians under the different payment models.

NPRM: Notice of Proposed Rulemaking
A massive document from CMS explaining the whole kit and kaboodle of MACRA. Bonus: Medicare reform is always in flux which is why staying current is imperative.

MACRA: Medicare Access and CHIP Reauthorization Act of 2015
Remember that basic explanation above? MACRA moves Medicare away from the ‘fee for service’ payment model, offering monetary incentives for physician participation in risk-designated and coordinated care models of reimbursement.

CHIP: Children’s Health Insurance Program
Here is that acronym within an acronym. To be clear, MACRA is for Medicare and Medicaid applied to CHIP.

QPP: Quality Payment Program
Simply put, QPP is the single framework created as a result of CMS streamlining current Medicare programs such as Meaningful Use (MU), Physician Quality Reporting System (PQRS) and Value Based Payment Modifier (VPBM).

To be clear, QPP replaces the Sustainable Growth Rate (SGR) formula that has been in place since 1997 to control the cost of Medicare payments to physicians. Gone are the days of Congress passing temporary “doc fixes” to avert cuts. Now, each provider’s performance will be measured for the entirety of 2017 and the payment adjustments will be reflected starting in 2019.

You can also think of QPP as the overarching term to describe the two payment models, MIPS or APM (both defined below).

MIPS: Merit-Based Incentive Payment System
Under MIPS — the first of two payment models — physicians will be scored on performance, which will affect Medicare Part B reimbursements.

See CPS (Composite Performance Score) for the nitty gritty on scoring, but here’s the short version. Physicians are scored in four categories: quality, cost, care coordination, and electronic health record (EHR) use. Scores are weighted and will change over time.

Of note, CMS expects that under this model, which affects payments based on scores that are above or below the national threshold, most independent practices will see a decrease in reimbursement amounts.

Additionally, CMS predicts MIPS quality reporting will cost each clinician approximately $723 per year and take numerous additional hours to complete each categories reporting.

APM: Alternative Payment Model
APM is the alternative to MIPS and is a quality vs. cost risk-based payment model.

Here’s how it works: CMS will publish care models annually that specify criteria for APM incentive payments. Physicians who meet the criteria receive 5% Medicare Part B incentive payment instead of a payment adjustment under MIPS. Not as many physicians will qualify for this payment adjustment model from the get go, but over time CMS states that APM will become the preference for providers.

EC: Eligible Clinician (formerly EP: Eligible Professional)
A MIPS-eligible clinician includes any licensed professional on this list or any group that includes such professionals:

Doctors of Medicine (MD)
Doctors of Osteopathy (DO)
Doctors of Dental Surgery/Dental Medicine (DMD/DDS)
Doctors of Podiatry
Doctors of Optometry
Physician Assistants (PA)
Nurse Practitioners (NP)
Clinical Nurse Specialists
Certified Registered Nurse Anesthetists

These clinicians regularly bill Medicare Part B so their quality scores (see CPS, below) will be compared with one another. Of note, large multi-specialty practice groups must choose whether to report as an individuals or as a group, but it’s either all individual or all group across the four MIPS scoring categories.

CPS: Composite Performance Score
The CPS directly affects a clinician’s payment reimbursement rates, so it’s kind of a big deal. Remember we said that CMS is streamlining current Medicare programs as measures of performance? Yeah, those make up three of four scoring components in the new CPS for ECs. The fourth component (#3 below) was added to promote ongoing clinical improvement and innovation.

1) Quality = PQRS
2) Resource Use (or cost) = VBPM
3) Clinical Practice Improvement Activities = IA
4) Advancing Care Information (ACI) = based on MU

Breaking it down:

1) PQRS: Physician Quality Reporting System

While PQRS formally ended at the close of the 2016 performance year and the last payment adjustment will occur in 2018, it’s important to understand how it measured quality. PQRS required clinicians to choose six measures to report to CMS that best reflect their practice. One had to be an outcome measure or a high-priority measure and one had to be a cross-cutting measure. Clinicians also reported a specialty measure set. As a component of CPS, quality will be scored at 60% weight for 2019 reimbursements with a minor decline to 50% in 2020 and 2021 will be worth only 30% of the composite. PQRS formally ended at the close of the 2016 performance year and the last payment adjustment will occur in 2018.

2) VBPM or just VM: Value-based Payment Modifier Program

This section of the CPS is based on cost of care vs. quality of care. Be clear that VM isn’t actually reported by clinicians; rather, CMS will calculate the value off of Medicare claims. Otherwise known as “resource use,” the cost of care component will have 0% weight bearing on 2019 reimbursements, but will see a minor increase to 10% in 2020 and all the way to 30% of the composite score in 2021.  

3) IA: Improvement Activities

This is the newest of the four CPS categories. It comes from electronic health records (EHR) and will include attestation sections. Of note, any patient-centered medical home (PCMH) automatically receives the full weight of the score in this category, that is, if your practice is accredited with National Committee for Quality Assurance (NCQA), Accreditation Association for Ambulatory Health Care (AAAHC), Joint Commission (previously JCAHO), URAC (previously Utilization Review Accreditation Commission) or other entities that are state-based, regional or private and administer PCMH accreditation.

4) ACI: Advancing Care Information

Short version. ACI is based on Meaningful Use (MU), aka EHR incentive program.

ACI allows for a flexible and customizable approach for providers because they can emphasize their best categories for scoring. What is being scored is the use of certified EHR technology (CEHRT), and it’s fine to use the 2014 or 2015 editions. Some of the objectives and measures that are scored include: how well is patient health information (PHI) protected, electronic prescriptions, patient electronic access, medication reconciliation and public health reporting, among others. Of note, if clinicians without an EHR wants to participate in MIPS, they are eligible, but non-use or use of EHR that isn’t certified scores a 0 in the ACI category.

The real deal with CPS is the transparency is paramount. MACRA requires that all MIPS data from composite scoring is made public. This means that each clinician’s performance scores will be posted to the Physician Compare website.

The Bottom Line

Inaction is inexcusable. MACRA has arrived, will be implemented in stages over the next few years, and will undoubtedly evolve over time. Your next decision will be how you will participate in the transition to the new payment models mandated by MACRA. To avoid a cut in pay reimbursement for 2019, CMS has introduced four options to ease into the transition. For 2017, these include test participant, partial participation, full participation and an advanced APM participation.

Now that you have your “MACRA-bet” down, hopefully you understand the far-reaching impact of MACRA on your revenue cycle performance. To learn more ways to improve your rev cycle, download our offer below!


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