MACRA: How changes in final rule affect urology

Robert A. Dowling, MDThe Medicare Access and CHIP Reauthorization Act (MACRA) was signed into law in April 2015 after overwhelming support from both houses of Congress and most houses of medicine. It replaced the unpopular sustainable growth rate method of updating the Medicare physician fee schedule with a predictable multi-year fee schedule overlaid on a system linking payment to quality (www.urologytimes.com/UT-MACRA-series).

Read: Medicare Part D data reveal prescriber patterns

Only after the proposed rule for implementation was released a year later did stakeholders really realize how complicated and broad the impact was on health care reimbursement. The proposed rule generated more than 4,000 comments to the Centers for Medicare & Medicaid Services, hearings in congressional committees of oversight, lobbying from stakeholders including specialty societies, and considerable negative press. The feedback on the proposed rule fell into several broad themes: too complicated to understand, too much change at once, too aggressive a schedule, negative impact on small and rural practices relative to larger practices, inflexible, and not enough accommodation to specialties and the diversity of health care delivery.

CMS issued the final rule on Oct. 15, 2016, and significant changes were made to address these themes of concern. In this article, the most recent installment in an ongoing series, I will summarize first impressions of the final rule and what it means for urologists.

Definition of low-volume provider changed

One very significant change announced in the final rule may not impact many urologists: CMS changed the definition of a low-volume provider from <$10,000 Medicare revenue to <$30,000. However, the impact on the program overall is significant. This change alone is estimated to exclude up to 32% of eligible clinicians from the Merit-Based Incentive Payment System (MIPS), and is an accommodation to small practice concerns. It affects the total number of clinicians being measured under MIPS (fewer) and therefore the number of dollars in the pool for fee schedule adjustment (fewer).

Next: "Transition year" created

The second major change in the final rule is the creation of a transition year (performance year 2017), during which significant relaxation of the reporting requirements and scoring thresholds occur. For example, during this first year of MACRA performance, the Cost category will not contribute to the MIPS composite score. In return, the Quality category will now count for 60% instead of the originally proposed 50% in year one. The Quality category of the composite score will not include the population health measures proposed in the original rule in year one; this removes some uncertainty for measures calculated from claims and arguably out of the control of many MIPS clinicians.

Also see - Open Payments: How urology measures up

Also, the performance threshold for the MIPS composite score was originally proposed to be based on the collective performance of clinicians subjected to MIPS scoring (mean or median). Based on the 2014 historical performance under legacy programs (meaningful use, Physician Quality Reporting System, and value-based modifier data), CMS originally estimated that smaller practices would receive more negative adjustments than larger practices. In response to this concern and to create less uncertainty for all MIPS clinicians, CMS finalized a starting performance threshold of three points (out of 100).

In other words, a score of 3/100 will avoid a negative payment adjustment, and a composite score of 3-100 will result in a positive fee schedule adjustment. This changed the CMS estimate regarding relative impact on practice by size, and the agency now predicts that more than 80% of small practices will be “winners” under MIPS and approximately 95% of practices of any size will be winners.

Flexible options for year one participation

Third, CMS finalized flexible options to participate in MACRA during the first year: Clinicians can avoid 2019 penalties (negative adjustments) with minimal reporting, and options exist to report for only 90 days. Practices that feel prepared can still report for a full year to optimize their performance under MIPS, and practices in an advanced alternative payment model can attempt to participate at the thresholds originally proposed to achieve a 5% bonus. CMS also suggested that there will be further accommodations in the second performance year (2018) in rules yet to be issued. CMS hopes these options will allow practices to choose a pace to acclimate to value-based reimbursement that is right for their own situation.

Finally, CMS addressed the concerns that a one-size-fits-all approach under MACRA disadvantaged specialists. New specialty sets of quality measures were created for MIPS, and CMS suggested that additional alternative payment models might be defined before Jan. 1, 2017. These parts of the final rule suggest that specialists, including urologists, may have more options available to succeed under MACRA.

Bottom line: The MACRA final rule was just released, and despite significant positive changes it remains a complicated regulation that will take time to understand and digest. Urologists should designate an internal or third-party resource to assist the practice as they navigate the waters of change. In subsequent articles, I will address specific aspects of the final rule that pertain to urology.

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