The Medicare Sustainable Growth Rate (SGR) repeal law, known as the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA), was signed into law by President Obama on April 16, 2015. MACRA permanently eliminated the SGR formula, a complicated Medicare payment mechanism created by Congress in 1997 to restrict the rate of growth in Medicare Part B spending.
Under the SGR payment formula, every year that actual Medicare spending exceeded targeted spending levels, the formula triggered a cut in Medicare reimbursement to PAs, physicians and other healthcare professionals who are paid under Medicare’s Physician Fee Schedule. Medicare spending first exceeded targets set under the formula in 2002, the only year in which the cuts were allowed to take effect. Since that year, Congress has overridden the prescribed cuts, and in some cases, increased Medicare payment rates. The passage of MACRA permanently repealed the SGR formula and brings a measure of stability and predictability to the Medicare payment system.
MACRA also authorized annual payment increases to the fee schedule of .5 percent from July 2015 through 2019. After 2019, there are no automatic payment increases, as the Medicare program expects to shift to a system of value-based, alternative payment models in which health professionals will receive payment performance incentives or penalties based on how providers meet quality performance criteria established by Medicare under a system known as the Merit-based Incentive Payment System or MIPS.
Here are answers to some frequently asked questions about MACRA.
What are the PA-friendly provisions in MACRA?
MACRA contains a number of important Medicare program changes beyond the repeal of SGR. Changes that are specific to PAs include:
Removing physician documentation requirements for DME − CMS requires that a Medicare beneficiary have a face-to-face visit with a PA, physician or advanced practice nurse (APN) in order to obtain durable medical equipment (DME). Previously, the Centers for Medicare & Medicaid Services (CMS) required that a physician had to document that a visit had occurred. Provisions in MACRA allow a PA or APN to document the face-to-face visit, thereby eliminating the need for any direct physician involvement in the ordering of DME. This change will result in patients receiving the DME they need—such as oxygen, nebulizers and walkers—more quickly because there is no need to wait for a physician’s signature/documentation when a PA is providing care to a Medicare patient.
Is this change eliminating the need for a physician’s signature/documentation of a face-to-face encounter for a DME order effective immediately?
The language regarding implementation of this provision is somewhat vague. The actual legislative language surrounding this issue states that “ . . . the Secretary of Health & Human Services may implement the amendments made by subsection (a) by program instruction or otherwise.” Some are expecting an official announcement from the Secretary, which has not yet occurred. Conversations between AAPA staff and HHS officials clarified that PAs can order DME without direct physician involvement.
It should also be pointed out that even before the language in MACRA was signed into law, the rule requiring physician documentation of a face-to-face visit had already been delayed indefinitely by CMS. We realize that some DME suppliers are looking for something in writing from CMS to be assured that the policy change is in effect. We have asked CMS for written verification of the updated policy.
Chronic care management codes − CMS already recognizes chronic care management services as one of the critical components of primary care that contributes to better health for individuals, lower costs and reduced hospital readmissions. Starting on January 1, 2015, Medicare began reimbursing for chronic care management services under the Medicare Physician Fee Schedule, using Current Procedural Terminology code 99490, for non-face-to-face care coordination services furnished to Medicare beneficiaries with multiple chronic conditions. PAs were authorized and covered to provide these services.
The language in MACRA formalizes or codifies payment for chronic care management under the Medicare fee schedule, while also reiterating that PAs are fully authorized to be reimbursed for the delivery of chronic care services. Details regarding implementation of the specific coverage policy surrounding chronic care management are left to the discretion of CMS.
What other important provisions are in MACRA?
A reversal of the unbundling of surgical payments − Eliminates a CMS rule that would have unbundled payments for surgical services and eliminated the post-op portion of payment for surgeries with a 10- or 90-day global period. The net impact of such a rule would have been an estimated 10−20 percent reduction in surgical global payments. Medicare would have paid the actual provider of care, not necessarily the surgeon, for any postoperative visits. The legislation implements an information collection requirement for postoperative global surgical payments under the auspices of the Secretary of Health & Human Services beginning no later than 2017.
Incentivizes value-based payments − The shift from fee-for-service to fee-for-value is being heavily encouraged by Medicare and most private payers. This movement represents a new focus on quality and patient treatment outcomes, as opposed to the number of tests, procedures or office visits that occur. Medicare and other payers will provide financial incentives and/or penalties if goals and standards aren’t met to support this transition. As directed by MACRA, CMS will combine three current incentive/penalty/quality reporting programs, the Physician Quality Reporting System, the Value-Based Payment Modifier Program and meaningful use of electronic health records (EHRs) into one incentive payment system, known as MIPS.
Funding for vulnerable patient groups − Extends federal funding for the Children’s Health Insurance Program (CHIP) for an additional two years with $19.3 billion for FY 2016 and $20.4 billion for FY 2017. CHIP is designed to provide coverage to children, pregnant women, and in some states, nonpregnant women, in families that don’t qualify for Medicaid but are unable to afford private health insurance, by providing a low-cost option for purchasing coverage. Funding extensions for community health centers and the National Health Service Corps program are also included in the legislation.
Interoperability of electronic health records (EHRs) − EHR systems must be interoperable by 2018. Interoperability requires that two or more health information systems be able to exchange clinical data and other information, and that the information that has been exchanged is available to healthcare professionals to allow them to facilitate coordinated care and improved patient outcomes.
Increased data transparency − MACRA requires that CMS publish utilization and payment data for PAs, physicians and others health professionals, similar to the Medicare payment data release in June 2015. These data include information on individual professional services provided, charges submitted and Medicare payments made.
Educate health professionals on improper payments − Medicare administrative contractors (MACs) will have to establish certain program integrity outreach and education programs for health professionals regarding improper payments discovered by Medicare audits. CMS will provide each MAC with a complete list of the types of improper payments identified by the recovery audit contractors, including lists of providers and suppliers with the highest rate of improper payments and the greatest total dollar amounts of improper payments. Under MACRA, CMS is mandated to develop a plan to revise the incentives for encouraging individuals to report Medicare fraud and abuse, and to develop a public awareness and education campaign to publicize the Senior Medicare Patrols.
How does the Merit-Based Incentive Payment System (MIPS) provision affect PAs and their patients?
The proposed MIPS program would assess health professionals in four categories: the quality of their care, meeting EHR meaningful use criteria, the appropriate use of healthcare resources (not ordering too many tests) and activities undertaken to improve clinical practice. PAs, physicians and certain other professionals would receive a score of 0 to 100, according to their performance in each of the four categories. That score would be posted on a publicly available website called Physician Compare.
Medicare would compare a health professional’s composite score with a performance threshold that would be either the mean or the median of the scores for all health professionals subject to MIPS. This would create a zero-sum game, meaning that professionals who score above the yet-to-be determined threshold would get bonus payments, while those who fall below the threshold would be penalized. Bonuses, as a percentage of total Medicare payments, would max out at three times the amount of the penalties, which are capped at 4% in 2018, 5% in 2019, 7% in 2020 and 9% in 2021. The law would award an additional $500 million per year from 2018 through 2023 to the highest performers. The threshold will be published each year in advance of the performance period being measured. Professionals whose scores improve year-to-year will receive extra credit as a way to incentivize performance improvement.
Health professionals would not be graded or paid under MIPS, if they receive a significant amount of their revenue through an alternative payment model (APM), such as those used by accountable care organizations and patient-centered medical homes. Professionals qualifying for the APM track would receive an annual Medicare bonus of 5% from 2018 through 2023. CMS will determine what qualifies as a significant amount or percentage of income received through the APM.
The overarching goal is to provide incentives to encourage PAs and other professionals to deliver the most timely, comprehensive and result-oriented care to patients. When this occurs, the quality of care delivered, as well as care outcomes, should improve for patients.
To find out more about MACRA and its impact on PAs and patients, visit the Medicare Access and CHIP Reauthorization Act page on aapa.org.
Michael Powe is AAPA vice president of reimbursement and professional advocacy and an adjunct assistant professor at The George Washington University School of Medicine and Health Sciences.