July 15, 2016

Slavitt Testimony Explores MACRA Implementation

In testimony before the Senate Finance Committee on July 13, Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), provided few new insights regarding pending efforts to implement the Medicare Access and CHIP Reauthorization Act (MACRA).

Slavitt was limited in the details he could disclose due to CMS’ ongoing efforts to finalize a notice of proposed rulemaking. The MACRA proposed rule was published on April 29, and CMS accepted public comments through the end of June. Final MACRA regulations are expected to be released in November.

Enacted in April 2015, MACRA repealed the flawed sustainable growth rate (SGR) formula and implemented a new reimbursement system that rewards physicians for the value of their patient care rather than payments exclusively based on service utilization. Starting in 2019, physicians have the opportunity to select whether they will participate in Medicare’s Merit-Based Incentive Payment System (MIPS) or an alternative payment model (APM).

The MIPS is a modified fee-for-service system that consolidates and streamlines existing CMS quality assurance programs, including the Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VBM), Electronic Health Record (EHR) Meaningful Use Program and newly created Clinical Practice Improvement Activities into one larger payment program. Performance in these previously separate CMS programs will be expressed as a “composite score” for individual physicians and compared to their peers to determine their eligibility for annual reimbursement bonuses or penalties.

APMs are loosely defined in the statute but are essentially CMS-approved, risk-based, innovative care models, such as accountable care organizations (ACOs), bundled payments and capitation. Physicians who participate in APMs are exempt from the MIPS and eligible for annual five percent reimbursement bonuses through 2024. However, they also require providers to assume two-sided financial risk, include a quality measurement component and be meaningful users of EHRs.

Slavitt’s oral testimony highlighted the four primary goals CMS seeks to achieve when implementing MACRA. After reviewing close to 4,000 written submissions from outside stakeholders during the proposed rule comment period, the agency is committed to crafting MACRA in a way that ensures patients are the primary focus, simplifies and reduces the programmatic burden on physicians, a allows for the continual development of new APMs so physicians can participate in tailored programs and provides special consideration for small practices and independent practitioners.

Despite limitations on his public testimony, questions posed by Senate Finance Committee Chairman Orrin Hatch (R-UT) did glean a few important options CMS is considering to lessen the burden of MACRA implementation on physicians. Assuming that CMS releases the final rule around Nov. 1, Hatch expressed concern that physicians will only have a few months before mandatory compliance with the new payment system. In response, Slavitt indicated that CMS is considering alternative programmatic start dates, shorter performance reporting periods and interim final rules.

Sen. John Thune (R-SD) also succeeded in pressuring Slavitt to reveal additional details regarding virtual groups, low-volume thresholds and the potential impact the triggering of the Independent Payment Advisory Board (IPAB) could have on overarching MACRA implementation efforts. Virtual groups are designed to permit individual physicians to form multiple limited partnerships with other providers around the country for purposes of MIPS participation and APM formulation. Though mandated in the statute, the proposed rule stated that CMS would not implement virtual groups in the initial MACRA performance period.

Slavitt explained the overarching complexity of virtual group policy requires CMS to gather additional stakeholder input before fully implementing the program. The agency, however, aims to have the proposed rule for implementing virtual groups released in 2017.

The CMS administrator also indicated the existing MACRA exclusions for low-volume physicians may need to be changed. The MACRA proposed rule defines low-volume physicians as providers who, during the performance period, have Medicare billing charges less than or equal to $10,000 and provide care for 100 or fewer Part B-enrolled Medicare beneficiaries. Slavitt indicated CMS is actively looking at reforming the $10,000 billing threshold.

However, Slavitt refused to discuss hypothetical IPAB scenarios and reiterated the administration’s support for implementing this bureaucratic body of unelected officials who would have jurisdiction over physician payment rates, if health care spending exceeds specific spending thresholds in a given year.

ACR members are encouraged to monitor the Advocacy-in-Action newsletter for additional updates on the MACRA implementation process.