Medicare Compliance & Reimbursement

What will happen to claims you submitted before Congress passed MACRA?

Congress has given you a gift — lawmakers have finally permanently repealed the Sustainable Growth Rate (SGR) formula, averting a staggering 21-percent payment rate cut. But will the new law be a bed of roses?

On March 26, the U.S. House of Representatives overwhelmingly supported the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), also known as H.R. 2, voting 393 to 37. After considering a series of amendments, the U.S. Senate then passed the bill on April 14 with a vote of 92 to 8. President Barak Obama then signed the bill into law on April 16. 

Look Forward to Steady Pay Rates

Impact: “Physicians and their patients no longer will have to be concerned with impending yearly payment cuts as a result of the flawed SGR formula and no longer will this burden of uncertainty be hanging over physician practices,” American College of Physicians president David Fleming, MD, MA, MACP said in an April 14 statement.

Background: Since SGR adoption in 1997, the threatened SGR-mandated Medicare reimbursement cuts have prompted Congress to pass “doc fixes” at least annually since 2003, and as many as five times in 2010 alone, noted attorneys Florence Wang and Vinay Bhupathy of Sheppard, Mullin, Richter & Hampton LLP in an April 20 analysis published in The National Law Review.

“The chief stumbling block to earlier repeal had been disagreement over how to pay for the repeal, with conservatives pushing for a package that was fully offset in the federal budget, Wang and Bhupathy wrote. “However, this year there was bipartisan support for only partial financing of an SGR repeal. [MACRA] is estimated to cost approximately $210 billion, with extenders for certain programs accounting for about $70 billion of the package.”

When You’ll Feel the Effects

Healthcare providers will feel the effects of the SGR repeal beginning in April, with no 21-percent cut going into effect as previously scheduled, says Blase Polite, MD, MPH, chair of the American Society of Clinical Oncology’s (ASCO) Government Relations Committee. Thereafter, you’ll see a general 0.5-percent base payment increase.

Instead of a big annual or semiannual pay cut, you’ll have small but stable pay increases each year, Polite tells Medicare Compliance & Reimbursement Alert. The big effects on Medicare payments will occur in 2019, however.

Nuts & Bolts: What MACRA Says

The 262-page bill covers far more than simply repealing the SGR system and averting the 21-percent reimbursement cut. MACRA provides for:

• Positive annual payment updates of 0.5 percent for four-and-a-half years, through 2019;

• Consolidated current quality incentive and payment programs — the Physician Quality Reporting System (PQRS), Value-Based Modifier and the “meaningful use” program for electronic health records (EHRs) — streamlined into a new Merit-based Incentive Payment Program (MIPS);

• All EHRs must be interoperable by 2017;

• Mitigated aggregate level of financial risk to practices from penalties;

• A 5-percent bonus to physicians in alternative payment models (APMs) from 2019 through 2024;

• Strong incentives for physicians to participate in qualified Patient Centered Medical Homes (PCMHs) — physicians in qualified PCMHs will receive the highest possible score for the practice improvement category in the new MIPS program;

• Technical support for smaller practices to help them participate in APMs or the new MIPS program (funded at $20 million per year from 2016 to 2020);

• Funding for quality measure development, at $15 million per year from 2015 to 2019;

• Continued funding of the National Health Services Corps, Community Health Centers, Teaching Health Centers, and the Children’s Health Insurance Program (CHIP); and

• Medicare must reimburse, under at least one payment code, monthly care management services for individuals with chronic care needs.

Also up for debate as part of MACRA was the therapy cap repeal amendment. Unfortunately, the Senate failed to pass this amendment, although the vote was a close one of 58 to 42 — just shy of the 60 votes needed for passage (see on page 75).

Will You Lose Reimbursement in the Long Run?

Although the healthcare industry overall agrees that the SGR repeal is a positive step and long overdue, not everyone is pleased with the rest of the provisions in MACRA. “The passage of H.R. 2 finally ends the annual uncertainty for Medicare beneficiaries and providers, but the bill is by no means ‘ideal,’” lamented the American Association of Neuromuscular & Electrodiagnostic Medicine (AANEM) in an April 21 announcement.

AANEM and some other healthcare organizations are pointing to an April 9 CMS Office of the Actuary report, which states that it anticipates “that physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter.”

But many industry experts aren’t paying much credence to the report’s findings.

“Physician payments in 2048 won’t be anything like they are today,” Polite notes. Instead of looking so far ahead, look at the 10-year horizon — there will likely be another discussion in 10 years and the debate will be renewed again.

Advantages: In the meantime, the MACRA offers a lot of opportunities for physicians to have extra revenue with quality incentives, Polite explains. And the law allows for alternative payment models to cut excess spending and improve care quality, for example, by reducing emergency room visits and rehospitalizations. 

Healthcare providers have the opportunity to be more efficient, reap some savings, and do the right thing for patients — which was not possible under the old payment system, Polite adds.

Watch Out for Erroneous Payments

Although CMS instructed Medicare Administrative Contractors (MACs) to pay Medicare claims according to the rates provided in MACRA, which avoided the 21-percent reimbursement cut, CMS has noted that “a small volume” of claims may be initially paid with the rate cut. MACs “will automatically reprocess claims paid at the reduced rate with the new payment rates,” CMS states.

CMS had instituted a 10-business-day hold on the claims that would have been impacted by the 21-percent cut on April 1, ASCO says. This hold would have bought Congress enough time to pass the MACRA legislation and repeal the SGR formula to avoid the across-the-board reimbursement cuts. 

What to do: So is there anything you need to do if you have claims in this small pool? Experts say you can rest easy. “No action is necessary by providers who have submitted claims for the impacted dates of service,” ASCO says. More information on these claims is available at www.cms.gov/Outreach-and-Education/Outreach/FFSProvPartProg/Downloads/2015-04-15-standalone.pdf. 

Resources: To read MACRA, go to www.gpo.gov/fdsys/pkg/BILLS-114hr2rds/pdf/BILLS-114hr2rds.pdf. The CMS Office of the Actuary report, “Estimated Financial Effects of the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2), is available at www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/2015HR2a.pdf.