MACRA 2018 Rule Reaction: Relief for Small Practices More of a “Band-Aid” than a Long-Term Fix

June 22, 2017
Responding to stakeholder concerns, CMS is looking to make year two of the Quality Payment Program simpler for small practices. What will be the fallout for these clinicians?

When the 2018 proposed rule for MACRA’s Quality Payment Program dropped Tuesday afternoon, one of the biggest takeaways early on was how the rule added even more flexibilities for smaller physician practices. In fact, says Travis Broome, healthcare policy lead at Aledade, a Bethesda, Md.-based company focused on physician-led accountable care organization development, a quick look at the Centers for Medicare & Medicaid Services (CMS) mission statement on the program shows how focused the agency is in helping smaller practices be successful under MACRA (the Medicare Access and CHIP Reauthorization Act).

“They added a line [about] preserving the independence of the clinical practice to the mission statement of the Quality Payment Program. That was bold because they really don’t mess with those things too often,” says Broome, who works at Aledade with its CEO and co-founder Farzad Mostashari, M.D., former National Coordinator for Health IT.

Indeed, in the last year, there has been significant discussion about MACRA’s potential impact on small practices. In the final rule released last fall, CMS said that it was taking additional steps to aid these practices, including excluding many of them by implementing a low-volume threshold for MIPS (the Merit-based Incentive Payment System) of at least $30,000 in Medicare Part B charges or having less than 100 Medicare patients. In sum, the new policy excluded an estimated 380,000 clinicians for 2017 due to this low-volume threshold.

For 2018, that low-volume threshold was raised significantly, from $30,000 in Medicare Part B charges to $90,000; and from having less than 100 Medicare patients to fewer than 200. The impact of that, Broome says, is not only that 200,000 more clinicians will be excluded from MIPS in 2018, but also that the amount of Medicare spend has been increased by 300 percent—from $30,000 to $90,000—now representing more than 10 percent of the total money that Medicare spends on Part B. As such, Broome fears that this might create “a partition between clinicians who are under the low-volume threshold and who are trying to stay there to ensure they don’t have to do a move to value, and everyone else who has to move to value.” Broome further points out that while CMS did a lot of work early on in making sure specialists were part of MIPS, these low-volume thresholds “might be undoing some of that work,” as many of those people who qualify for those low-volume threshold will be specialists.

To this end, in the proposed rule, CMS has estimated that some 80 percent of qualifying small practice clinicians (15 or fewer) will get either a positive or neutral MIPS payment adjustment in 2018. That might make some stakeholders reflect back to the proposed MACRA rule from last spring which predicted that the overwhelming majority of these small practices would be dinged with Medicare negative payment adjustments. CMS then made modifications for the final rule it released in October, such as excluding many more clinicians from MIPS with low-volume thresholds, a move which seemed to satisfy concerned clinicians.

Broome notes that CMS “got a lot of flak” from Congress for that initial MACRA proposed rule, and as a result, the government has continued to increase the number of exclusions for clinicians in the MIPS track. Some of these include: allowing virtual group reporting for the first time; giving [small practices] five bonus points for participating in MIPS; and giving regulatory relief on the Advancing Care Information category with a hardship exemption. Says Broome, “So with all of this, you can see the situation emerge that that 80 percent number is possible. The pool of people who will be penalized keeps shrinking and the band keeps narrowing over time. That is concerning for the move to value, because if you look at the Value-Based Modifier that we have today, the problem is that everyone winds up in this massive middle area that doesn’t impact anyone. It would be a problem if MIPS ends up replicating that,” he says.

Meanwhile, Anders Gilberg, senior vice president of government affairs with the Englewood, Colo.-based Medical Group Management Association (MGMA), says that while the 80 percent estimation sounds good on the surface, CMS also predicts that 99 percent of practices with 100 or more clinicians are expected to get a positive or neutral MIPS adjustment. “So even with the low- volume threshold going up, CMS’ own predictions are that clinicians in these small practices are much more likely to get penalized than a very large practice who can deal with the complexity with the rule. A 20 percent difference is [meaningful],” says Gilberg.

What’s more, he notes, is that even with these modifications made by CMS, the government’s aggregate estimations predict that $224 million will be taken out of the MIPS payment adjustments in 2020 for practices with 15 or fewer clinicians, while just $10 million will be taken from groups of 100 or more.

Source: CMS

What Does the Future Look Like for Small Practices?

By significantly increasing the low-volume threshold in the proposed rule, CMS has also created a larger, big-picture question, experts who were interviewed for this article say: How will future years of MACRA look in regard to small practices partaking in the program? Indeed, in the proposed rule, CMS ran a table that estimated, after all the exclusions, only 36 percent of eligible Medicare clinicians would be participating in MIPS this year (It should be noted that this figure does count some who are on the advanced alternative payment model, or APM, track). But what will the options be for these physicians going forward?

Gilberg, whose association represents more than more than 12,500 healthcare organizations, says that MIPS was intended to be a transitional program, but since there's a lack of advanced APM options, many of these larger physician groups are still in MIPS. Because MIPS is a budget neutral program, he says, “It creates a David vs. Goliath tournament based on a very complex measures sets and formulas.” Says Gilberg, “If you have a larger practice and a larger administrative staff, you can play the game better. CMS wants these larger practices in APMs, not MIPS, in the end. If they simply allow MIPS to remain a way for large practices to eat the lunch of small practices, the program is destined to implode if they remove the low-volume thresholds. Or it will create an adverse impact on the marketplace, which means more consolidations and more retirements, or small practices will not participate and get paid less,” he says.

Gilberg brings up an example of a clinician with Medicare Part B charges right around $90,000 who, by not participating in MIPS, would get dinged with a 5 percent penalty, or $4,500 for the year. “That comes out to a few hundred dollars a month, and that’s less than you will spend in staff time and in IT expenses,” he says.

MGMA’s Gilberg also brings up another concern on behalf of the association’s members: a main criticism from both physicians and administrators who are working with physicians, is that for this to work, physicians will need to find MIPS clinically relevant for their practice, and see that it is contributing to quality improvement. Currently, that’s not happening in any practice he has spoken to, Gilberg notes. “The biggest thing we continue to hear about MIPS is there is no actionable feedback. Getting feedback a year after you reported will not help you in any way improve quality. It underscores that MIPS is just a government reporting program, and that’s how many clinicians view it,” he says.

Both Broome and Gilberg say they appreciate that the government is listening to healthcare stakeholders as they continue to adjust their rulemaking, with Gilberg noting that nothing in this proposed rule “is a done deal.” But in the end, notes Gilberg, while the low-volume threshold will exclude more clinicians from MIPS in 2018, it only serves “as a Band-Aid on the larger complexity of the program.”