MACRA Final Rule Released – Actions You Should Take Now

With the release on October 14, 2016 of the Final Rule with Comment Period (Final Rule) for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), titled Merit-based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models [CMS-5517-FC], the healthcare industry received some much-awaited clarity around the May 9 Proposed Rule.

There are many things to discuss in the way of finalized proposals in the Final Rule; we will periodically pick a topic of interest—especially a change from the Proposed Rule—and summarize the decision highlighted in the Final Rule.

One notable change in the final rule is the revised weighting assigned to the former Resource Use Category, now known in the Final Rule as the Cost Performance Category. Section 1848(q)(2)(E)(i)(I)(bb) of MACRA stipulated that for the first and second years of MIPS not more than 10 percent of the final score would be based on performance to the Cost Performance Category. Thus, the Secretary of HHS has the discretion to reduce the rate below the 10 percent proposed for the Resource Use Category in the Proposed Rule. In the Final Rule, this has been set at zero percent for 2019, the transitional payment year, measured by the 2017 performance year. The Cost Performance Category will increase to 10 percent in 2020 and 30 percent in 2021 in future MIPS payment years.

This is significant in several ways. First, this will permit CMS and providers to focus primarily on quality, for which alignment of quality and payment has been a focus since the passage of the law. Second, even though the Cost Performance Category will not be weighted in the transition year of 2019, limited information will be gathered by CMS on cost performance for provider feedback, providing MIPS eligible clinicians and groups the opportunity to better understand the cost measures in MIPS without an effect on their payments, especially the impact of adjustments and performance based on the MIPS decile scoring system. Third, cost performance will become of greater importance in the weighted scoring as it will be gradually increased. Fourth and importantly, cost performance data will still not require self-reporting by providers, but will be gathered by CMS from claims data, thereby not increasing the administrative burden for providers. 

Even with this change delaying the impact of cost performance on MIPS scoring, there are steps you can take now to get ready for the Cost Performance Category if you expect to be paid in the MIPS system. Your Quality and Cost Reports (QRURs) report data from the VM system. Understanding current cost outliers and taking steps now to address those can put you ahead when the MIPS performance period begins in 2017 and when the Cost Performance Category is weighted based on 2018 performance. 

For weekly insights into healthcare, please sign up here: