What rural hospitals need to know about MACRA

  • The Centers for Medicare & Medicaid Services has rolled out a new Medicare physician payment system. The system will affect payment starting in 2019, with data reporting beginning in 2017. 
  • Leaders of small rural hospitals believe success under Medicare’s Quality Payment Program looks a lot like success under value-based population health.
  • Many small rural providers, including Rural Health Clinics, Federally Qualified Health Centers and clinicians with low volumes of Medicare patients, are exempt from the QPP in 2017.
  • Most clinicians at small rural facilities who are not exempted from the Medicare Access and CHIP Reauthorization Act of 2015  will fall under the Merit-based Incentive Payment System in 2017 but can choose how much data to report to avoid penalties and potentially earn a bonus.

It’s easy to lose the forest for the trees in the new Medicare physician payment system, which has so many nuances and details that the related Centers for Medicare & Medicaid Services final rule runs 823 pages in the Federal Register. “I tell physicians it’s cumbersome, it’s bureaucratic,” says Jeffrey Steinbauer, M.D., interim chief medical office for Baylor St. Luke’s Health Network in Texas. Yet, Steinbauer believes the Quality Payment Program will bring positive change. “It is absolutely the right thing to do because it looks at the value we are adding to the patient’s care,” he says.

Established by the Medicare Access and CHIP Reauthorization Act of 2015, the final rule of which was released in October, QPP is meant to tie a greater percentage of clinician payment to performance. It is a key part of CMS’ plans to link 90 percent of Medicare reimbursement to value by 2018 while deliberately moving providers toward alternative payment models including bundled payment and shared savings.

As of Jan. 1, this is the "new order for physician payment,” says Melissa Myers, senior associate director of policy for the American Hospital Association. “We expect this to accelerate the shift we’ve been seeing in hospital-physician relationships.”

Preparing the ground

The Jan. 1 launch of QPP promises to advance health care’s shift to new value-based payment models. But many small rural hospitals have more immediate concerns.

“It’s been a struggle to know how this is going to affect us and determine how we move forward,” says Rebekah Mussman, president and CEO of the Crete (Neb.) Area Medical Center, a critical access hospital.

The QPP has two tracks. But most eligible clinicians at small rural facilities will be in the Merit-based Incentive Payment System, a pay-for-performance program. The other track offered by Medicare is limited to a handful of Advanced Alternative Payment Models.

To prepare for MIPS, health care experts and leaders recommend starting with these five steps:

1. Determine which clinicians are in and out

A sizable percentage of small rural providers have been given a reprieve in 2017 from MIPS, which focuses on Medicare Part B. Exempt providers include Rural Health Clinics, Federally Qualified Health Centers and clinicians with low Medicare volumes. Specifically, clinicians who see fewer than 100 Medicare patients or who bill less than $30,000 of Medicare services will be exempt from MIPS participation in 2017. 

The MIPS may apply to critical access hospitals but only if they are participating in an arrangement CMS calls Method II billing, in which the CAH bills for both facility and professional services. For the MIPS to apply to the CAH, clinicians must have reassigned their billing rights to the hospital, says Akin Demehin, the American Hospital Association’s director of policy. “If they have not reassigned their billing rights, the critical access hospital is not subject to MIPS.” Instead, qualified clinicians are subject to MIPS if they bill Medicare directly.

Hospital leaders need to double-check their assumptions about which clinicians are in or out of MIPS, says Lynn Barr, CEO of Caravan Health, based in Beaverton, Ore. For instance, hospital-employed specialists, including emergency department physicians and surgeons, are not exempt. “In the past, [the Physician Quality Reporting System] only affected ambulatory physicians. It’s natural to think employed specialists are automatically exempt, but they’re not unless they are excluded because of low volumes or other reasons,” Barr says.

In addition, the inclusion of nonphysician providers — physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists — may significantly affect rural providers. “They tend to employ a lot of nonphysician providers because of physician access issues in rural areas, says the AHA’s Priya Bathija, senior associate director of policy.

2. Identify who has to report what

In 2017, eligible clinicians will be assessed in three MIPS categories: quality, improvement activities and advancing health information. Clinicians will be assessed on cost measures starting in 2018. CMS has also loosened reporting requirements for certain providers. For instance, rural providers can report two rather than four improvement activities.

3. Avoid transition-year complacency

CMS is allowing providers to choose how much data they report in 2017. While providers will receive a 4 percent penalty in 2019 if they don’t submit any data, they can avoid this penalty by reporting a minimum amount (for example, one quality measure). While small rural hospitals may welcome this respite, they need to be careful not to procrastinate and fail to get ready for 2018, when providers might have to submit a year’s worth of data or risk a 5 percent penalty in 2020.

“There’s danger in knowing you've got this low bar to achieve for year one to avoid downside risk,” says Steve Smith, a managing consultant for accounting and advisory firm BKD LLP. “Organizations need to make sure that doesn't lead to a lack of preparation for future performance periods.”

4. Determine the cost of participation

Small rural hospitals should consider the costs and benefits associated with seeking MIPS bonuses, which will be at 4 percent or lower in 2019. “Organizations have to look at the exact dollar figure that's on the line and weigh that against the costs to implement necessary processes and systems,” Smith says. “The cost could be more than the upside dollars organizations may potentially achieve.”

For example, a CAH with $40,000 in Part B billing under MIPS might have to spend $50,000 on information technology and data analytics to have the potential to earn a 4 percent bonus in 2017.

5. Engage clinicians

Only one of the 14 clinicians employed by the Crete Area Medical Center will be MIPS-eligible in 2017, according to Mussman’s estimate. But she is encouraging all of the hospital's clinicians to prepare for a value-oriented future as well as the potential expansion of MIPS. “We’re approaching this like it doesn’t matter who falls in or out of MIPS right now. We can either keep our heads in the sand, or we can get ahead of the curve,” Mussman says.

In discussing MIPS with clinicians, Mussman has been stressing the program’s public reporting aspect. “MACRA is putting physicians and other clinicians on a scoring scale, and that score will essentially follow them the rest of their career because it will be tied to their [National Provider Identification]. That score very well may affect how they negotiate employment contracts and insurance compensation moving forward,” Mussman says.

At the board level

Hospital trustees will need to be on top of MACRA, the QPP and MIPS, both for the sake of governance, and for communication and outreach.

"There's nothing worse than getting blind-sided in the grocery store, particularly in a small town," Mussman said. "I think it's absolutely important that [trustees] understand what's out there publicly and be able to speak on it, maybe not in detail, but at least know what it is."

The hospital's relationship with physicians is another area where trustees have a role to play.

“I think one consideration for trustees that may be just a little bit different, although not dramatically different, from that of a hospital executive, is getting a sense of what sort of physician engagement infrastructure their hospital has," the AHA's Demehin says. "What kind of relationships do they have with physicians and other clinicians — are they contracting with them, are they employing them? What strategy does the organization have going forward? The answers to those questions, I think, would drive any engagement the organization would have around the MIPS or around APMs.”

The American Hospital Association has more information and resources on the Medicare Access and CHIP Reauthorization Act of 2015. 

Maggie Van Dyke is a freelance writer based in the Chicago suburbs.

Rural providers turn to population health for Quality Payment Program success

“Don’t get hung up on the payment model,” advises Lynn Barr, chief transformation officer of the National Rural Accountable Care Consortium, when asked what leaders of small rural health care organizations should keep in mind about Medicare’s new Quality Payment Program.

The program is part of the Medicare Access and CHIP Reauthorization Act of 2015 and was finalized in October. In addition to tying clinician payment to performance, QPP encourages participation in alternative payment models, including accountable care organizations and bundled payment.

“It’s not about the payment model. It’s about implementing population health,” says Barr, who is also CEO of Caravan Health, a service organization that helped the consortium prepare 159 rural health systems to join forces as 23 ACOs in the Medicare Shared Savings Program, Track 1. “The various payment models are being tested and still changing. But population health is here to stay.”

The experience of rural ACOs suggests that putting in place basic population health approaches, such as assigning care coordinators to high-risk patients, leads to big improvements in a rapid fashion:

  • The first National Rural MSSP ACO improved its overall quality score from 68.9 percent in year one to 96.8 percent in year two.
  • In 2015, ACO inpatient spending in the consortium decreased by 3 percent, according to a Caravan survey of its members.

Rebekah Mussman, president and CEO of the Crete Area Medical Center in Nebraska, hopes the critical access hospital's experience with the patient-centered medical home model will help it do well under the QPP's Merit-based Incentive Payment System. The hospital's two Rural Health Clinics were certified as PCMHs several years ago, preparing it for MIPS-style care.

“MIPS lines up pretty nicely with the foundational elements of a patient-centered medical home, including care coordination, ensuring patient access and population management,” Mussman says. “I think we are a step ahead because our physicians and providers believe in that philosophy.”

Mussman also hopes that MIPS will provide an “extra push” that her organization needs to become a high-performer compared with national benchmarks. “We are focusing on disease management and our patient registry to ensure none of our chronically ill patients are falling through the cracks,” she says.

MaineGeneral Health’s physician-hospital organization, Kennebec Region Health Alliance, has already added five small rural private practices to its MSSP Track 1 ACO. Barbara Crowley, M.D., chief transformation officer at MaineGeneral in Augusta, said she expects that eventually all of the PHO’s private practices will join.

“As a network, we’re going to report quality metrics for MSSP, so every practice participating with us in MSSP gets credit,” she says. “Now, the other reality is that our MIPS performance will depend on how we do as a network. To be successful, we have to keep patients in-network through improved access and referrals. For example, our orthopedists are working on a program where their physician assistants see and screen patients that same day.”

Will MIPS add to the reporting overload?

The implementation of the Merit-based Incentive Payment System comes at a time when clinicians and hospitals alike are concerned about rapid growth in the number of quality-measure-reporting and pay-for-performance requirements.  “They’re annoyed with the amount of measurement that is going on for them,” says Barbara Crowley, M.D., chief transformation officer of MaineGeneral Health in Augusta.

Medicare quality measurement programs for hospitals will include approximately 90 measures in 2019. And the MIPS includes a list of nearly 300 measures from which clinicians can select for reporting. What's more, Medicare is not alone in asking for quality data. The Oregon Association of Hospitals and Health Systems found that Oregon hospitals were tracking more than 400 different metrics for various payers and other initiatives. “For rural hospitals, the resources required to keep up with all this monitoring and reporting [are] very difficult to bear,” says Paul Stewart, president and CEO of Sky Lakes Medical Center in Klamath Falls, Ore.

While more work needs to be done, various national and state efforts are making headway in reducing metric burden. For instance, the Centers for Medicare & Medicaid Services incorporated specialty measure sets into MIPS quality reporting. “For example, there is a cardiology specialty measure set that falls in line with the way that cardiologists already practice,” says Steve Smith, managing consultant at BKD LLP. “This will actually make it a little bit easier for a provider to do this kind of reporting, because it's probably something they're already doing.”

While Crowley commends CMS for working to simplify reporting under MIPS, she believes hospitals and networks need to help the clinicians with whom they partner “get through the morass” of the Quality Payment Program. “Our role is to support them to be as successful as they can be,” Crowley says.

MACRA glossary

Here are some of the basic terms and acronyms used in the Medicare Access and CHIP Reauthorization Act: 

MACRA: The Medicare Access and CHIP Reauthorization Act of 2015 is the federal law that repealed the sustainable growth rate formula and set the stage for the Quality Payment Program.

Quality Payment Program: The new Medicare physician payment program that encompasses the Merit-based Incentive Payment System and Advanced Alternative Payment Model tracks.

MIPS: The Merit-based Incentive Payment System is the QPP track that the majority of clinicians will be in, at least initially. MIPS is a pay-for-performance system. Clinicians receive annual bonuses or penalties beginning at 4 percent in 2019, the first payment year, based on their performance.

Alternative Payment Model: A payment approach that provides additional incentives to clinicians to provide high-quality and cost-efficient care for a care episode, a patient population or a specific clinical condition.

Advanced Alternative Payment Model: One of two tracks in the QPP, it is intended for clinicians at the forefront of value-based population health management. A subset of APMs, Advanced APMs bear more financial risk for losses. In 2017, only a small number of models are included in the Advanced APM category, including Tracks 2 and 3 of the Medicare Shared Savings Program, the Next Generation ACO Model and Comprehensive Primary Care Plus. CMS is pushing for more involvement in 2018.

Advancing Care Information: This is one of the MIPS performance categories. It replaces the Medicare Electronic Health Records Incentive Program for clinicians, also known as meaningful use.