This blog post was originally published when CMS was considering delaying the new Quality Payment Program. The program has since begun as scheduled on January 1, 2017. Learn more by reading or FAQ and introduction to the new program here.

Let’s not be too quick to postpone the MACRA implementation.

First, there are problems with the proposed rule that are disastrous to small practices. they are problems that will not be fixed with a one, two, or even ten-year delay. And the problems can be fixed with some simple modifications to the proposed rules.

Second, the complex array of programs that MACRA will replace have significant dysfunctions. It will be beneficial to most of us to replace those programs as quickly as possible to alleviate those dysfunctions.

According to Medicare’s 2014 PQRS Experience Report published in April 2016, 45% of healthcare in the United States occurs in practices of 10 or fewer providers. There are 453,000 Providers in 256,000 Practices nationwide that share small practice barriers to delivering data about quality to Medicare.  Anything that is disastrous to those practices puts 45% of healthcare access at risk. Compared to their peers in larger practices, these small practices are less likely to have an Electronic Medical Record. If they have an Electronic Medical Record, they are unlikely to have affordable access to electronic reporting. And they are less likely to participate today in Medicare’s Physician Quality Reporting System.

There is nothing that can happen quickly that will correct this set of barriers for small practices to report. On the other hand, a few simple changes in the proposed rule can make the new program easier on small practices. Whether it is the lack of an Electronic Medical Record or the lack of access to affordable data extraction services, small practices typically need to manually score their charts to be able to make a quality data submission. Three elements of the MACRA rules as proposed make manual reporting an enormous burden for small practices. But those three elements are easily adjusted and disaster avoided.

First, the proposed rule would change the reporting requirement from Medicare-only to patients of all payers. For a typical general medical practice, about a third of patients are Medicare insured. This change to all payer eligibility will triple the burden of reporting for the typical practice. It would be easy to keep, for the foreseeable future, the reporting requirement at Medicare patients only.

Second, the proposed rule would increase the reporting rate requirement to 90% for most submission mechanisms. This proposal alone nearly doubles the reporting burden for most practices. It would be easy to keep the reporting requirement at 50%.

There is value to pushing through to all-payer data and higher reporting rates. But we could continue to “push the envelope” as we protect small practices if, instead of requiring 90% reporting of All-Payer data, CMS offered bonus points for this higher standard of completeness.

Third, and perhaps most important, the measures groups mechanism of reporting has been the only way that many small practices have been able to comply with reporting requirements. The proposed rule ends the measures groups reporting mechanism. With this mechanism, a practice sends a performance report to Medicare based on a sampling of 20 patient charts. It is a mechanism that makes reporting achievable for small practices. The mechanism could be improved, but let’s not take it away. It’s drifted away from random sampling over the years. We can take it back to a random sample. Too many specialty practices don’t have applicable measures groups. We should expand the selection of measures groups and even build some new ones based on Medicare’s new specialty measures sets.

With a few adjustments, like those described above, MACRA looks like it should be better than the systems currently in place. We should be impatient to get there. MACRA queues the end, as we now know them, of the Physician Quality Reporting System, the Value-Modifier Program, Quality Tiering, and the EHR Incentive Program. MACRA introduces a new construct, envisioned now as the Quality Payment Program with its two major elements, the Merit-based Incentive Payment System and Alternate Payment Mechanisms. With this new construct, we have the opportunity to eliminate awkward and dysfunctional elements of the prior programs, bring forward and improve useful elements of each, and coordinate them into a functional single program.

I have read the proposed rules and find them overall to be surprisingly solid, functional, and a significant step forward. To a great extent, the rules, as proposed, eliminate awkward and dysfunctional elements of the prior programs, bring forward and improve useful elements of each, and coordinate them into a functional single program. I extend my compliments to those whom I expect are an army of thinkers and authors that contributed to the document.

The first year of MACRA puts less money at risk. In the current complex of systems, there is 2% of Medicare revenues at risk on PQRS, there is another 2 or 4% at risk on Value-Modifier and Quality Tiering depending on the size of the practice, and there is yet another 3% at risk for Meaningful Use. The first year of MACRA reduces revenue at risk to 4%. The proposed schedule of adjustments are: ± 4% in the 2019 payment year, ± 5% in the 2020 payment year, ± 7% in the 2021 payment year, and ± 9% in the 2022 payment year and beyond. We can linger longer at 4% and take a longer time to work up to 9% and still encourage all of the changes we want to encourage with the new program.

The Physician Quality Reporting System is a pay-for-reporting-system that was designed to encourage us to report. It used first a carrot and then a stick to encourage participation and has brought the challenge and opportunity of Quality Reporting to the attention of everyone. I think its utility has passed. Those who are willing and able to report are reporting and those who are not yet reporting will start when it is of sufficient value to them. It seems a good time to move our focus on the content of the reports and take the next step toward Pay-for-Performance and Value-Based purchasing.

The Value-Based modifier (VM) with its Quality Tiering program has been our first foray into Pay-for-Performance and Value-Based purchasing. I’m sure most of you can come up with a longer list of complaints, but I see two major problems with VM that are queued to be fixed by the proposed rule. The first is that VM is too coarse. The second is that the VM is too coarse.

In the first case of being too coarse, VM has an awkward pass-fail nature. A single technical error or error of interpretation can render the entire submission invalid and subject the submitter to the full weight of the penalty. The proposed rule changes that. A missing measure, a poorly performing measure, or a technical error in the measure will reduce the score for a submitter but will not by itself cause a total catastrophic loss.

In the first case of being too coarse, Quality Tiering is a pass-fail analysis on each of two elements: Quality and Cost. The penalty or reward to which each participant is subject is the sum of those two pass-fail elements. The boundaries between performance levels are abrupt and there is, therefore, too little differentiation between winners and losers and too little reward for small units of improvement. The proposed rule changes that. It replaces the two pass-fail elements of Quality Tiering with a 100-point continuum called the Composite Performance Score that potentially gives users an incremental reward for each of 100 increments of performance.

Finally, the EHR Incentive Program has been a disappointment. It will be good to have it substantially rewritten as in the MACRA Proposed Rule. It has been over-reaching in its scope and with its provider-specific tracking and reporting burden, it is expensive and cumbersome to manage.

The EHR Incentive program, as currently configured, makes too many assumptions about how EHR should be implemented and used to improve quality and cost of care. It would be better if it had a lighter touch and allowed practices to innovate and to learn more naturally how to use the tool to achieve their practice goals. I would not personally today build a practice without an EHR. A great information system is part of the modern, highly efficient, effective, and affordable health delivery system of which I dream. But I want to proceed at the pace dictated by the priorities of my patients, the capabilities of my staff, and the availability of resources. The scope and pace of the current incentive program force resources to be wasted on dysfunctional elements in the system and the adoption of functions that most providers do not yet know how to use to improve cost and quality of care.

In the MACRA program as proposed, the “Advancing Care Information” performance category replaces the current EHR Incentive Program. Although several alternatives are described in the proposed rule, they all do two important things. First, the changes emphasize the importance of the exchange of data. And second, they deemphasize most other things. This is good. Most uses of EHR should be driven by the desire of a practice to improve Cost and Quality of care. They should not be forced to invest in functionality that they have not learned to envision as part of their cost and quality improvement program. The Federal Government should stop assuming which elements of EHR are valuable and let the marketplace and competition show the way.

On the other hand, incentives and penalties based on data exchange probably have value. Though it makes great sense for the health of our communities and the convenience of our patients to automatically share electronic health data, there are substantial business barriers for both EHR vendors and healthcare systems to cooperate. Being the first to share data puts and EHR vendor at a competitive disadvantage. If data is too readily shared, it becomes too easy to change EHR vendors.  Being the first to share data similarly puts a healthcare system at a competitive disadvantage. If data is too readily shared, it becomes too easy to change healthcare providers. Neither reason is a great reason to avoid sharing data. But I have come to understand a favorite truism I often hear from my friends in faith-based healthcare systems: “No Money – No Mission.” No matter how well intentioned an EHR Vendor or a Healthcare System is, by sharing data too readily they can put themselves out of business. Focusing our new “Advancing Care Information” performance category on data sharing makes great sense to help tip the balance of the business case toward more data sharing.

Finally, tracking and reporting for the EHR Incentive Program has simply been a nightmare. It has been set up to require tracking every provider individually across all of their past and multiple current practices. It creates the circumstances that each individual provider in a practice could be in a unique Meaningful Use status. The requirements are overly complex and burdensome without providing any extra value to the system.The functional unit of healthcare delivery is the practice. Each practice is defined by a unique market or community, a set of providers and staff, an array of tools and resources, and a set of written and unwritten policies and procedures. A provider who changes practices or works in multiple practices benefits or suffers from those unique elements that define each practice environment. As a provider changes practices they do not carry with them the functional elements that define quality and cost of care in those other practices. I applaud the elements of the MACRA/MIPS proposed

The functional unit of healthcare delivery is the practice. Each practice is defined by a unique market or community, a set of providers and staff, an array of tools and resources, and a set of written and unwritten policies and procedures. A provider who changes practices or works in multiple practices benefits or suffers from those unique elements that define each practice environment. As a provider changes practices they do not carry with them the functional elements that define quality and cost of care in those other practices.I applaud the elements of the MACRA/MIPS proposed

I applaud the elements of the MACRA/MIPS proposed rule that move to the PQRS standard that supports the billing TIN as the basic group identity and the TIN-NPI as the individual identity. In my opinion, we can’t move there fast enough.

Breaking Down the New Quality Payment Program

This eBook will help you prepare for the transition to MIPS and APMs.

Start Understanding MACRA