Medicare Compliance & Reimbursement

Three incentive programs to be consolidated.

Now that the Medicare Access and CHIP Reauthorization Act (MACRA) has been signed into law, you need to know what’s ahead for your practice in the coming years.

Watch for a Pay Boost Next Year

MACRA eliminates the SGR formula for Medicare physician payment once and for all. Congress has passed 17 SGR “patches” since 2002, which has made both legislators and physicians wary about simply moving the problem forward yet again.

The bill gives 0.5 percent annual boosts to Medicare pay for five years, after which practitioners would get bonuses based on quality of care rather than the number of procedures they administer. The cost of the plan would reportedly amount to about $200 billion over the next decade, and some of that cost could be passed on to higher-earning Medicare beneficiaries.

“As written, we would see annual physician payment updates of 0.5 percent from 2015 through 2019 and zero percent updates from 2020 through 2025,” explains Michael A Granovsky MD, FACEP, CPC, President of LogixHealth, a national ED coding and billing company. “Starting in 2026, we would see two conversion factors, one that applies to providers that participate in advanced payment models such as an ACO, with a 0.75 percent annual update. A second conversion factor with a 0.25 percent yearly increase would apply to providers who do not participate in advance payment models,” he adds.

Know the Other MACRA Details

The bill calls for consolidation of three current incentive programs: PQRS, EHR meaningful use, and the value-based modifier program into the new Merit-Based Incentive Payment System (MIPS).

MIPS will assess performance of eligible professionals in four categories (quality, resource use, meaningful use of EHRs, and clinical practice) and provide a payment adjustment, which could be positive or negative depending on your composite performance score.

The current penalties in play for meaningful use, PQRS, and value-based modifier would be replaced by MIPS, which rapidly escalates from 4 percent in 2019 to 9 percent in 2022, Granovsky explains.

Additionally: MACRA contains other provisions important to your practice, including:

• Extension of work Geographic Practice Cost Index (GPCI) floor: This provision extends the existing 1.0 floor on the “physician work” cost index work component of physician fees in areas where labor cost is lower than the national average until Jan. 1, 2018.

• Two-year extension of CHIP: The Children’s Health insurance program (CHIP) covers more than 8 million children and pregnant women in families that earn income above Medicaid eligibility levels. While the CHIP program is authorized through 2019, no new funding is available after fiscal year 2015. This provision preserves and extends CHIP, funding the program through fiscal year 2017.

• Income-related premium adjustment for Parts B and D: This provision increased means testing for the portion of the Medicare Part B premium that a beneficiary pays based on the beneficiary’s income. Beginning in 2018, it would increase the percentage for Medicare beneficiaries with modified adjusted gross income (MAGI) between $133,501 and $160,000 ($267,001-$320,000 for a couple) from 50 percent to 65 percent. Beneficiaries that earn $160,001 and above ($320,001 and above for a couple) would pay 80 percent. This provision would also apply to Part D premiums, meaning that beneficiaries who have income above the set thresholds are assessed an income-related monthly adjustment amount in addition the base Part D monthly premium.

• Delay of the two-midnight rule: Current CMS regulation requires a patient stay of two midnights in a hospital to qualify for inpatient status in most instances. Stays that are less than that will be paid as an outpatient visit such as observation. This provision allows CMS to continue use of the Medicare Administrative Contractor (MAC) “probe and educate” program to assess provider understanding and compliance with the “two-midnight rule,” on a pre-payment basis, through Sept. 30, 2015.

• Delay in elimination of the global surgical packages: This provision reverses the CMS 2015 final rule decision to eliminate the bundled payment for surgical services that span a 10- and 90-day period. It requires CMS to periodically collect information on the services that surgeons furnish during these global periods beginning no later than 2017 and use that information to ensure that the bundled payment amounts for surgical services are accurate. The Secretary of HHS has the authority to delay a portion of payment for services with a 10-and 90-day global period to incentivize reporting of information. The Secretary can stop the collection of information from surgeons if the needed information can be obtained through other mechanisms, such as clinical data registries and electronic medical records.

Be ready: There is no further ICD-10 delay stipulations in the legislation this year, which means your practice needs to be ready for the Oct. 1, 2015 implementation deadline.