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MACRA shows CMS is all-in on value

The rule gives physicians a break in electronic health record requirements, a reprieve that does not apply to hospitals.

Susan Morse, Managing Editor

Hospitals waiting for clarity from the federal government now know where they stand on MACRA requirements and a new administration's view of value-based care, according to two experts interviewed.

On Tuesday afternoon, the Centers for Medicare and Medicaid Services released its revised rules for the Medicare Access and CHIP Reauthorization Act.

[Also: 2018 MACRA rule continues pick-your-pace, will exempt even more clinicians (updated)]

Since MACRA received wide, bipartisan support when Congress passed it two years ago, it was never threatened when a new administration came to power.

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But how a new administration would treat value-based incentives as reflected in MACRA's quality payment program for the merit-based incentive payment system and alternative payment model has been open to debate.

"Some hospitals have been holding their breath trying to read the tea leaves," said Chris Stanley, MD, director for Navigant. "I think now it gives hospitals a clarity they would be moving forward with APMs."

"I think what the proposed rule is saying, APMs are here to stay," said Tom Lee, PhD, founder and CEO of SA Ignite in Chicago. "A lot of our clients are hospitals that have started large health systems. For those organizations, the proposed rule is showing more flexibility in ways to increase their score."

There's more levels of optimization and more ways to report quality under the revised rule, he said.

Smaller and rural hospitals get some relief in MIPS requirements.

Overall, the rule has no huge negative impact for hospitals, Stanley said.

"Hospitals are interested in the downstream impact," he said. "For example, anytime hospitals can see a decrease in avoidable ER visits, a focus on good quality care."

Hospitals are impacted by the rule because they have large populations of ambulatory clinicians, Lee said.

The rule gives physicians a break in electronic health record requirements, holding off for a year a mandate for them to upgrade their EHRs.

[Also: MACRA virtual groups provide more flexibility for physicans, though guidance needed, expert says]

The reprieve does not apply to hospitals, which was pointed out in a statement by American Hospital Association Executive Vice President Tom Nickels.

"We also applaud CMS's proposal to provide much-needed relief from unrealistic, unfunded mandates for EHR capabilities by extending the use of modified stage 2 meaningful use requirements through 2018," Nickels said. "We will encourage CMS to provide the same relief to hospitals."

Most of the reaction from hospitals will be positive, said Stanley, who formerly led national bundled payment, ACO, and MACRA initiatives for Catholic Health Initiatives. Any disruption caused by MACRA is no longer a surprise and hospitals have already taken efforts to rein in costs, he said.

"We're seeing through Navigant and CHI, absolutely we shouldn't be reacting to MACRA as a hoop to work through. It should be incorporated into strategy," Stanley said. "Most hospitals understand that. They're starting to recognize over time, it's part of a larger movement to value."

What Navigant is hearing from hospitals, he said, is that they want to be recognized for their efforts on total cost of care.

For hospitals operating on a fee-for-service, the rule helps because it sets the cost of care component at zero percent for MIPS. The original plan was for that cost to be incorporated at 10 percent, but for 2018, CMS is again proposing zero.

The composite performance score for MIPS is based on four different components including EHRs, quality as 60 percent of the overall score, performance improvement, and cost of care, which is now not part of the composite score for 2018.

Another big takeaway is that MACRA is competitive because penalties and bonuses are revenue neutral.

This means winners and losers.

On MIPS for 2018, CMS is proposing to maintain the 3 point floor for measures to be scored. CMS is also proposing that the final score will be compared against a MIPS performance threshold of 15 points, which can be achieved through multiple pathways.

"Ultimately organizations need to do more to avoid a penalty in 2018 than you did in 2017," Lee said.

At three points, the organization or physician - depending on whether MIPS is done individually or by the group practice - wouldn't be penalized, but other organizations can view the score and this affects reputation, Lee said.

"Our clients care about reputation," Lee said. "It becomes part of their resume."

If a physician moves, the new practice will inherit his or her payment adjustment.

"It becomes a recruiting issue," Lee said, "it follows the clinician for the rest of their life."

CMS's desires organizations to get into alternative payment models, Lee said. The alternative payment model will be a more likely path for organizations next year, though only a minority will be willing to take downside risk with the advanced alternative payment model.

Before taking on APMs, "it's becoming good hygiene to know where you are from a MIPs standpoint," he said.

They'll be a step ahead as far as aligning to CMS's vision.

Track 1 ACOs will do well in MIPs because it means more money without a duplication of effort, he said.

"CMS is all in on this," Lee said. "In 2019, a step-up happens. What I'm advising is … to understand different scenarios and options."

Twitter: @SusanJMorse