Doctors face higher hurdles in year 2 of MACRA, but it's not all bad news, says AMA's David O. Barbe

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2018 marks year two under MACRA, the new Medicare payment system for doctors. (jansucko/iStock/Getty Images Plus/Getty Images)

Year two of the new Medicare payment system for physicians is a mixed bag, as practices face new and higher hurdles than they did last year, says David O. Barbe, M.D., president of the American Medical Association.

As physicians enter the second year under the Medicare Access and CHIP Reauthorization Act (MACRA), pros and cons surround the Merit-based Incentive Payment System (MIPS), the program track that covers most physicians, Barbe told Fierce Healthcare in an interview.

David O. Barbe
David O. Barbe, M.D. (AMA)

The good news is that fewer physicians will be required to participate in MIPS and there are some accommodations that make it easier for small physician practices.

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On the other hand, physicians will get a final performance score to determine their Medicare payment that, for the first time, includes a cost category, as well as three other factors: quality, advancing care information and improvement activities.

Barbe, who heads the country’s largest physician organization, provided a look at what’s ahead for MACRA in 2018, which was rolled out by the Centers for Medicare & Medicaid Services in a 1,658-page final rule last fall.

Among the key changes for doctors:

The cost category

In 2017, as part of the "pick your pace" approach that allowed physicians to ease into MIPS, CMS weighted the cost category at zero.

But in 2018 they replaced that with a 10% cost weight, a change the AMA opposed as “not ready for prime time,” Barbe said. In conjunction, CMS will decrease the quality portion of doctors’ performance score from 60% to 50%.

The cost weight—based on total per-patient cost and total spending around a hospital admission—will make up even more of the score in 2019 and beyond, when it will rise to 30%. The AMA is working hard to get Congress to pass legislation to prevents that 30% increase next year and for the future, he said.

CMS calculates cost measures for a doctor’s performance using claims data.

Decrease in the number of clinicians required to participate in MIPS 

CMS significantly expanded the low-volume threshold to exclude clinicians with either $90,000 or less in Medicare Part B allowed charges or 200 or fewer patients.

Barbe said that's good for small practices, many of which struggled to participate in the complex MIPS program. However, on the flip side, it excludes small practices that are ready to jump into the value-based payment system, since CMS automatically excludes practices that are under the threshold. The AMA wants CMS to allow practices to opt in.

CMS estimated that only 37% of clinicians who bill Medicare will be subject to MIPS as a result of the change in the threshold.

Other favorable accommodations for small practices

The new rule adds five bonus points to the final MIPS score for practices of 15 or few clinicians. Since CMS raised the performance threshold to 15 points in year two (from three points in the first year) small practices are two-thirds of the way there, Barbe said. Small practices will also see favorable scoring under the quality category.

Higher hurdles in 2018

For the most part, the threshold changes are favorable or a wash for physicians, Barbe said. Setting the performance threshold at 15 points creates a higher hurdle in year two, but is one most practices should be able to meet, he added.

But the AMA will continue to advocate for changes to make it easier for physicians as they adapt to the new payment system. In 2019, a fully implemented MIPS program will take effect, Barbe said. The AMA is lobbying for legislation that would allow CMS the flexibility to transition more gradually to the full payment system.

One interesting piece of data not available yet is how many physicians opted to take a 4% financial penalty in the first year of MACRA to avoid the burden of reporting quality data to the government. CMS made it easy for physicians to avoid a penalty by submitting only one measure on one patient before the close of 2017. CMS estimated that no more than 3% of physicians would face a penalty in the 2017 reporting year.

“It will be an interesting statistic,” said Barbe.

If history is any indication, there may be many more doctors and physician practices that don’t participate in MIPS and opt to take the financial penalty that cuts their Medicare revenue. A study released last month found that 29.3% of eligible practices failed to report quality data during the first year of a Medicare pay-for-performance program—the Value-Based Payment Modifier Program—that was the predecessor of MIPS.

If the 2017 data shows physicians and practices are not participating in MIPS, it will be important to look intently into why the program isn’t working for doctors, Barbe said.

Geting doctors on board

The AMA and other physician organizations campaigned to urge doctors to make the minimum steps to participate in MIPS and also to make them aware of the payment program. Among doctors in decision-making roles, fewer than 1 in 4 said they were well prepared to meet quality reporting requirements under MACRA in an AMA survey last summer.

“We are seeing improved understanding,” Barbe said. “We want physicians to understand what’s required and to be able to succeed.”

While MIPS has been challenging for many doctors, it is much better than the programs that proceeded it, which had become all-or-nothing programs. "This is a much more favorable approach,” Barbe said, one that gives physicians flexibility.

Physicians should choose quality measures and performance improvement activities that make sense for them and their patients, he added.