The arrival: What's changed, what comes next with final MACRA rule

HHS has released the highly anticipated final rule, nearly 2,400 pages long, implementing the Medicare Access and CHIP Reauthorization Act (MACRA) to overhaul Medicare reimbursement, with the agency saying significant changes were made from the proposed rule.

“Today, we’re proud to put into action Congress’s bipartisan vision of a Medicare program that rewards clinicians for delivering quality care to their patients,” HHS Secretary Sylvia M. Burwell said in a statement. “Designed with input from thousands of clinicians and patients across the country, the new Quality Payment Program will strengthen our health care system for patients, clinicians and the American taxpayer.”

The essence of the MACRA tracks remains the same from the proposed rule. The Sustainable Growth Rate (SGR) methodology for updating the physician fee schedule is being replaced with two new tracks, the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).

What’s changed

The biggest change from the proposed rule had already been announced by CMS in September. Full participation in the MACRA’s new Quality Payment Program tracks won’t be required in 2017, allowing practices to “pick their pace.”

In the final rule, these options are more spelled out. At a minimum, eligible clinicians have to report on at least one measure or activity within MIPS for 90 days in 2017, or else have a 4 percent negative payment adjustment. For those participating in Advanced APMs and receiving a “sufficient portion” of Medicare patients through the Advanced APM, they’ll be eligible for a 5 percent bonus incentive in 2019.

The executive summary of the rule—which itself is 24 pages long—hints that full QPP participation won’t be required in 2018 either.

“We anticipate that the iterative learning and development period will last longer than the first year, 2017, of the program as we move towards a steady state; therefore, we envision 2018 to also be transitional in nature to provide a ramp-up of the program and of the performance thresholds,” CMS said. “We anticipate making proposals on the parameters of this second transition year through rule-making in 2017.”

Among the other changes from the proposed rule:

• More support for small practices, including raising patient thresholds to exclude some 380,000 clinicians and offering $20 million over five years for technical support and outreach.        
• Development a new track for accountable care organizations called Medicare ACO Track 1+ Model. Set to begin in 2018, the voluntary model for ACOs either participating in Medicare Shared Savings Program for the first time or already involved in MSSP Track 1.
• “All-or-nothing” requirements in the use of certified electronic health record technology have been simplified.
• The financial risk standard for participating in Advanced APM will be based on practice’s revenue rather than total cost-based.

Who’s exempt

Notably, the final rule says “more than half” of eligible clinicians billing under the Medicare physician fee schedule will be exempt from MIPS for the 2017 performance period, which could include up to 780,000 clinicians. The largest group of exempt clinicians are those which don’t meet the low-volume threshold of $30,000 in allowed charges or 100 Medicare patients.

Another 5 to 8 percent of clinicians—up to 120,000 in total—will be excluded from MIPS due to participating in Advanced APMs.

The rule estimates up to 642,000 eligible clinicians will be required to participate in MIPS for the 2017 performance period.

What comes next

The final rule comes with another comment period. Nearly 4,000 comments were received after the proposed rule was released, with many of their top concerns, such as not requiring full participation in 2017, making it into the final rule.

New comments will be due 60 days after the rule is published, while the rule itself is scheduled to take effect on Jan. 1.

The initial reaction

While major medical associations and stakeholders will take some time to dig through the thousands of pages in the final rule, the preliminary responses to the final rule are largely positive.

The American Medical Association praised the “pick your pace” options and the previously announced move to limit the administrative burden on physicians.

“Our initial review indicates that CMS has been responsive to many of the concerns raised by the AMA, and in the days ahead, the AMA will conduct a comprehensive review of the final rule to ensure that it promotes flexibility and innovation in the delivery of care to help meet the unique needs of all patients,” AMA President Andrew Gurman, MD, said in a statement. “With the flawed Sustainable Growth Rate (SGR) formula – and its annual threat of steep payment cuts – permanently eliminated, the new law gives many physicians the opportunity to be rewarded for the improvements they make to their practices and for delivering high-quality, high-value care to Medicare patients.”

Other organizations praised the release of the rule while holding off on specifics until it studies the final rule.

“The overwhelming majority by which MACRA passed Congress last year reflects a bipartisan consensus that the way we pay for health care and the way that it’s organized is unsustainable and must change,” the National Association for Quality Assurance said in a statement. “This final rule is an important next step toward affecting that change and we are eager to play our role in helping make MACRA work for everyone."

Former National Coordinator for Health IT Farzad Mostashari, MD, has been combing through the regulation on Twitter. He praised the inclusion of another comment period and the revenue-based definition of “more than nominal risk,” but was disappointed by the lack of a definition for virtual groups and the two-year gap between performance and payment.

He also predicted more clinicians than CMS expects will fail to meet the minimum reporting requirements in 2017 and be hit with the negative 4 percent payment adjustment, potentially putting $700 million at stake.