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September 12, 2016

CMS Delay’s Full MACRA Implementation to the Next Administration

In a blog post, CMS announced changes to the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) that will allow physician practices to choose the level and pace at which they comply with the new payment reform model aimed at emphasizing quality patient care over volume. The announcement comes after pressure from industry stakeholders and policymakers to ease implementation of MACRA, which is set to start January 1, 2017. We previously reported that CMS was considering a potential MACRA delay, and this appears to be what the agency will finalize in its November rule.

The Announcement

Acting CMS Administrator Andy Slavitt announced that the final MACRA regulation will exempt physicians from any risk of penalties if they choose one of three distinct MIPS reporting options in 2017, in addition to the option of participating in an advanced APM:

  • Full-year reporting that begins on January 1;
  • Partial year reporting for a reduced number of days; and
  • A "test" option under which physicians can report minimal amounts of data.

 

Physicians who report in 2017 may be eligible for bonus payments in 2019, depending on which option they choose.  Those who opt for full-year reporting will be eligible to receive a "modest positive payment adjustment;" those who choose partial year reporting will be eligible for a "small positive payment adjustment."  Physicians who choose the "test" option will not be subject to any payment adjustments.  Qualified participants in advanced APMs will be eligible for 5 percent incentive payments in 2019.

Industry Reaction

Response to the announcement was largely positive. Many groups submitted comments to CMS for the proposed MACRA rule calling upon the agency to delay the start of MACRA or to offer flexibilities, especially for smaller and solo practices. This comes as a new report indicates that many physicians are worried about MACRA's new practice burdens. In general, most physicians still do not understand MACRA, despite the start of the first performance period in 2017.

American Medical Association President Andrew Gurman in a statement said, "By adopting this thoughtful and flexible approach, [CMS] is encouraging a successful transition to the new law by offering physicians options for participating in MACRA." He added, "This approach better reflects the diversity of medical practices throughout the country."

The American College of Physicians (ACP) issued a statement: "[ACP] is pleased that CMS plans to implement changes to give physicians more options to participate in the Quality Payment Program in 2017 without being at risk of negative adjustments. These changes are consistent with recommendations made by ACP and other physician stakeholders to exempt small practices from negative adjustments and to provide more flexible options for practices of all sizes to be successful"

The American Hospital Association (AHA) also applauded CMS' announcement. Ashley Thompson, AHA's senior vice president for public policy analysis and development, said, "We are pleased that CMS has responded to feedback asking for greater flexibility in meeting MACRA's aggressive timeline and reporting requirements." She added, "We look forward to reviewing the details of these options when CMS releases a final rule."

Congressman Michael C. Burgess, a Republican doctor from Texas and chair of the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade said he was please CMS had heard his calls and the calls of his colleagues.

 "Today's announcement from CMS regarding the agency's dedication to flexibility in the implementation of MACRA is proof of the benefits of keeping Congress involved in policy implementation," Burgess said in a statement.

Moving Forward

The proposed changes by CMS still need to be finalized in the MACRA rule which is expected in early November. However, this does give physician groups more time to prepare their members and suggest options for the 2017 performance period. CMS essentially announced a compromise—providers who are more ready for MIPS can receive credit for participation and be eligible for bigger bonuses, whereas those who are not prepared can ease into the program and avoid penalties. This is especially welcome news for small and solo practices.

Not participating at all still is a bad choice for physicians, as they will receive a negative adjustment. It will make sense to pick at least the lowest level option; the details of how much participation is required to meet the lowest option are still unknown until the final rule is released. But CMS likely thinks there will be a pool of physicians that do not participate, thereby receiving a negative adjustment. This will help offset positive adjustments required by the law's budget neutrality. Expect positive adjustments to be small in order to compensate for the need to be both budget neutral and the increased number of pathways for physicians to receive at least some bonus payment.

Additionally, this is only for the first year of MACRA. By statute, the range of payment adjustments is poised to rise dramatically in subsequent years, so despite the first-year flexibility, providers should not slow efforts to prepare for MACRA. The race toward high performance in MIPS has already begun, and providers who wait to improve performance will find themselves behind the pack when the program takes full effect in subsequent years.

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