CMS Will Ease Reporting Requirements for First Year of MACRA

CMS will ease reporting requirements for first year of MACRA in July of this year. CMS announced the proposed criteria for participation in the Merit-based Incentive Payment System (MIPS). Starting January 1, 2017, CMS will begin the process of replacing the much maligned Medicare Sustainable Growth Rate Formula (SGR) methodology for determining annual updates to the Medicare Physician Fee Schedule, with a new “value-based” payment model linked to quality and performance.

At the time of the initial announcement, CMS stated that Eligible Clinicians (physicians, PAs, NPs and certain others) had to either report MIPS data for the entirety of 2017 and have their data compared to all other clinicians or participate in a CMS approved Advanced Alternative Payment Model. For those participating in MIPS, the data reported in 2017 would lead to either positive or negative Medicare Physician Fee Schedule payment adjustments in 2019.

Under the proposal announced in July, all MIPS-eligible clinicians (ECs) would be asked to report a variety of measures intended to assess and compare data across all specialties. ECs (physicians, PAs NPs, certain others) would receive a MIPS composite score based on their performance across four reporting categories: Quality, Resource Use, Practice Improvement and Information Sharing; and, in 2019, MIPS participating ECs will have their Medicare payments adjusted positively or negatively. Eligible Clinicians can avoid MIPS payment penalties in 2019 if they participate in an approved Alternative Payment Model (APM) or if the EC is classified as a low-volume provider.

In early September, Andy Slavitt, Acting Administrator of the Centers for Medicare and Medicaid Services (CMS) announced in a blog post that the Agency was going to back-off of its “two-pronged” approach to participating in the Merit-based Incentive Payment System (MIPS).

Instead, the agency was offering “flexibility” to report “some data” in 2017 and avoid payment penalties in 2019. Also, Slavitt announced that ECs could submit partial- year data (rather than the original full-year data) and receive a proportional positive (or possibly negative) adjustment in 2019.

Although Slavitt’s Blog announcement outlined some features of the new options, many key details will not be known until the release of the MACRA final rule in mid- to late- October.

Under the first new option, submitting “some data” will guarantee an EC can avoid a negative payment adjustments under MIPS in 2019. According to the announcement, this option is “designed to ensure that your system is working and that you are prepared for broader participation in 2018 and 2019”. The announcement does not provide details on what the definition of “some data” will be. This will be elaborated on in the final rule. Additionally, the announcement does not specify if providers reporting under this option are also ineligible from positive payment adjustments.

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The second new option allows for partial year reporting across all four performance categories. The announcement does not specify the exact length of time providers will need to report data to participate in this option. This option allows for participants to qualify for a small positive payment adjustment. The announcement does not specify if reporting under this option will let participants avoid a negative payment adjustment or perhaps reduce the negative adjustment providers would be subject to under this option.

Eligible clinicians can still participate fully in MIPS or APMs for the full calendar year as proposed.

Despite CMS making it easier to avoid negative payment adjustments, the Agency might also be making it more difficult for providers who participate fully to receive positive payment adjustments for good performance.

It is unclear what impact these new participation options will have on MIPS payment adjustments which are required to be budget neutral. These new options make it easier to avoid a negative adjustment in 2019. However, without poor performers, this added flexibility could make the MIPS environment more competitive for those providers who choose full participation.

CMS could tap into the “exceptional provider” fund which provides even higher positive payment adjustments to the highest performers in MIPS to cover any payment gaps resulting from fewer clinicians being hit with a penalty in 2019.

Looking at the current state of participation in the existing Medicare Physician Quality Reporting System Program (PQRS), tens of thousands of providers do not report any data under this program. If this trend of nonreporting continues into the first MIPS reporting year, these non-reporters could account for a significant portion of the negative adjustments that offset the positive adjustments. However, these new reporting options for partial participation will most likely result in a great reduction of non-reporters.

The Final Rule has been completed by CMS and is currently being reviewed by the Office of Management and Budget (OMB) before being released to the public. The final rule could be released as early as mid-October.

Best regards,
Kirk Reinitz, CPA
President/CEO