How new Medicare payment system intends to help small practices

Draft regulations released last month outline sweeping changes to the Medicare payment system, and one of those eagerly anticipated changes is the Centers for Medicare & Medicaid Services’ (CMS) stated intent to ease physicians’ administrative burdens—including for those in small or rural practices. A new fact sheet outlines flexibilities the agency is proposing for physicians in the new payment system.

The proposed rule for implementing key provisions of the Medicare Access and CHIP Reauthorization Act (MACRA) has drawn concerns regarding its regulatory impact analysis, which projected that the quality and resource use components of the new Merit-based Incentive Payment System (MIPS) would have a negative impact on most solo physicians and small practices.

CMS has clarified in its new small practices fact sheet that the projections made in the analysis were “based on 2014 data when many small and solo practice physicians did not report their performance. It also does not reflect the accommodations in the proposed rule that are intended to provide additional flexibility to small practices.”

In particular, the impact analysis table in the proposed rule only offers a partial picture of physicians’ potential success in MIPS because it fails to include participation in the categories of “clinical practice improvement” and “advancing care information”—formerly the electronic health record meaningful use program.

Another flaw in the analysis was that it did not provide the magnitude of how physicians would be affected. For example, physicians who opted not to participate in quality reporting and meaningful use would be subject to an 11 percent payment cut in 2019 under previous law. Under MACRA, the maximum payment cut would be 4 percent. Unlike MACRA, previous law did not provide any partial credit for efforts that were not 100 percent successful.

The analysis looked at successful participation of “eligible clinicians” in the Physician Quality Reporting System (PQRS) and under the value-based modifier. CMS’ definition of “eligible clinicians” includes nonphysician health professionals such as chiropractors. Many of these eligible clinicians could not participate in PQRS or the value-based modifier. Consequently, the subset of the physicians actually reflected in the analysis is relatively small.

Andy Slavitt, acting administrator of CMS, recently testified before a congressional committee, emphasizing that the agency is focused on providing the flexibility required for physicians in smaller practices to be as successful under MIPS as those in larger groups.

Here are some of the flexibilities that CMS says were included in the proposed rule to accommodate the unique needs and challenges faced by physicians in small practices: 

• Physicians with a low Medicare volume won’t be subject to the MIPS payment adjustment. To avoid unnecessary reporting burdens, clinicians or groups who have less than or equal to $10,000 in Medicare charges and less than or equal to 100 Medicare patients are excluded from the MIPS payment adjustment.    
• Physicians should not be held accountable to inapplicable categories. If a MIPS performance category does not have enough measures or activities that are applicable for the practice, then the category would not be included in the practice’s MIPS score.   
• Physicians will have fewer measures on which to report. The agency is proposing to remove unneeded measures and reduce administrative requirements. For example, CMS proposes to reduce the number of required measures in the quality and advancing care information categories.   
• Physicians can use a single reporting mechanism. Three of the four categories will require reporting—all of which can be done through the same mechanism, instead of the distinct reporting options required under the current payment system. Physicians also have greater choice regarding which reporting mechanism to use.

CMS has proposed additional flexibilities within MIPS performance categories to account for the unique circumstances of individual clinicians, small groups, and practices in rural or professional shortage areas:

• Quality. The total possible points would be 80 for a group of nine or fewer, while a group of 10 or more would be 90 points. Also in an effort to reduce physicians’ reporting burden, the quality category would require practices of all sizes to report only on six measures, rather than the nine current measures. In addition, physicians would receive partial credit for measures.    
• Clinical practice improvement activities. Under this category, physicians and other clinicians would be rewarded for clinical practice improvement activities, such as those focused on care coordination, beneficiary engagement and patient safety. A list of more than 90 options will be available for physicians to select activities that match their practice’s individual goals.   For physicians in small practices located in rural or professional shortage areas, this category allows them to submit one activity of any weight to receive partial credit or two activities of any weight to receive full credit. Larger practices would be required to submit three to six activities.  
• Cost. A cost score would not be calculated for physicians who don’t have a high enough patient volume for the cost measures (generally defined as a minimum of 20 cases pertaining to a particular measure). CMS would reweight the cost category to zero and adjust other MIPS performance category scores to make up the difference.

While these proposals are important changes for physicians, the agency will need to make additional improvements during the rulemaking process to best address things that have been getting in the way of physicians focusing on providing high-quality care to their patients. The proposed rule is open for comment through June 27, and CMS has said it welcomes feedback from patients, physicians, caregivers, health care professionals and members of Congress, among others.

The AMA is developing recommendations to further ease the burdens on physicians in small or solo practices to enable their success under this new payment system.

The AMA offers a number of resources to help physicians prepare for the coming payment policies, including:

• A summary of the proposed regulations
• 4 steps to prepare for Medicare’s new payment systems
• A guide to physician-focused payment models
• Key points of the Merit-based Incentive Payment System
• What you can do now to prepare  
• The AMA’s STEPS Forward™ collection of practice improvement strategies, which include advancing team-based care, implementing electronic health records, improving care and practicing value-based care