The Impact of MACRA on Your Future Revenue

What is MACRA? Presently providers are reimbursed on a fee for service basis. Fees that are determined by the SGR formula or Sustainable Growth Rate. MACRA (Medicare Access and CHIP Reauthorization Act) CHIP (Children’s Health Insurance Program) bottom line is the government wanting to reimburse providers based on their quality of care, not quantity. Physicians will no longer be reimbursed based on volume of patients but on the value of care.

MACRA’s implementation will begin in 2019 but will be based on the reporting year 2017. So, even though implementation is a few years down the road the data used to determine a providers fee schedule will be based on what is reported in 2017 which is only a few months away. MACRA will allow each provider to have an individual fee schedule based on performance. Under MACRA providers will have two options:

Option 1: MIPS or Merit Based Incentive Payment System. MIPS combines parts of PQRS, VM, and HER incentive program into one program. Most physicians will be reimbursed based on MIPS.

Option 2: APM or Alternative Payment Model. APM provides ways to pay health care providers for the care they give to Medicare beneficiaries by sharing the risk. Accountable Care Organizations (ACO’s), and bundled payment models are examples of APMs. From 2019-2024 health care providers that qualify for APMs will receive a lump-sum incentive payment.

There are four components of MIPS:

1. Quality – PQRS (50%)
2. Advancing Care Information (ACI previously known as HER/meaningful use) (25%)
3. Clinical Practice Improvement Activities (CPIA) (15%)
4. Resource Use (10%)

MIPS defines the financial impact on providers by creating a composite score for each provider. The composite score will be between 1 and 100 and based on the 4 components above. Composite scores will be posted on a CMS public website known as Physician Compare.

Providers not reporting PQRS measures now receive a 2% penalty. Once MACRA is implemented PQRS could have a big impact on a providers reimbursement as the PQRS portion of the score is 50%.

Currently meaningful use is an all or nothing program. Under MACRA, MU or ACI it will no longer be all or nothing. Under MACRA ACI will account for up to 25% of a providers composite score, the provider will receive credit for the amount of MU they demonstrate. The higher the providers composite score the more they will be reimbursed for services provided to Medicare beneficiaries.

It is important for providers to prepare NOW so that their reported information in 2017 will not hurt their income in 2019. Many providers are still not reporting through the PQRS system or demonstrating MU. The current penalty does not impact them enough to make a difference. With MACRA PQRS and MU will count for up to 75% of the composite score and won’t be as easily ignored.

It is imperative for providers to exercise financial prudence and start preparing now so that you’re not surprised in 2019 when revenues are harshly impacted.

And…as always Take Advantage for all your medical billing needs call 877.666.5279

Leave a Reply

Your email address will not be published. Required fields are marked *