Rural Docs Move Into Value-Based Payment

By Maggie Van Dyke for H&HN

5 steps for hospitals to prepare for MACRA’s Quality Payment Program

The Jan. 1 launch of Medicare’s new clinician payment system under the MACRA law — the Quality Payment Program — promises to tie a greater percentage of payment to performance, and to accelerate health care’s shift to new value-based payment models. But many small rural hospitals have more immediate concerns.

“It’s been a struggle to know how this is going to affect us and determine how we move forward,” says Rebekah Mussman, president and CEO of the Crete (Neb.) Area Medical Center, a critical access hospital.

The Quality Payment Program — established by the Medicare Access and CHIP Reauthorization Act of 2015, the final rule of which was released by the Centers for Medicare & Medicaid Services in October — has two tracks. But most eligible clinicians at small rural facilities will be in the Merit-based Incentive Payment System, a pay-for-performance program. The other track offered by Medicare is limited to a handful of Advanced Alternative Payment Models.

To prepare for MIPS, health care experts and leaders recommend starting with these five steps:

1. Determine which clinicians are in and out

A sizable percentage of small rural providers have been given a reprieve in 2017 from MIPS, which focuses on Medicare Part B. Exempt providers include Rural Health Clinics, Federally Qualified Health Centers and clinicians with low Medicare volumes. Specifically, clinicians who see fewer than 100 Medicare patients, or who bill less than $30,000 worth of Medicare services, will be exempt from MIPS participation in 2017.

The MIPS may apply to critical access hospitals, but only if they are participating in an arrangement the CMS calls Method II billing, in which the CAH bills for both facility and professional services. For the MIPS to apply to the CAH, clinicians must have reassigned their billing rights to the hospital, says Akin Demehin, the American Hospital Association’s director of policy. “If they have not reassigned their billing rights, the critical access hospital is not subject to MIPS.”

Hospital leaders, however, need to double-check their assumptions about which clinicians are in or out of MIPS, says Lynn Barr, CEO of Caravan Health, based in Beaverton, Ore. For instance, hospital-employed specialists, including emergency department physicians and surgeons, are not exempt. “In the past, [the Physician Quality Reporting System] only affected ambulatory physicians. It’s natural to think employed specialists are automatically exempt, but they’re not unless they are excluded because of low volumes or other reasons,” Barr says.

In addition, the inclusion of nonphysician providers — physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists — may significantly affect rural providers. “They tend to employ a lot of nonphysician providers because of physician access issues in rural areas, says the AHA’s Priya Bathija, senior associate director of policy.

2. Identify who has to report what

In 2017, eligible clinicians will be assessed in three MIPS categories: quality, improvement activities and advancing health information. Clinicians will be assessed on cost measures starting in 2018. CMS has also loosened reporting requirements for certain providers. For instance, rural providers can report two rather than four improvement activities.

3. Avoid transition-year complacency

CMS is allowing providers to choose how much data they report in 2017. While providers will receive a 4 percent penalty in 2019 if they don’t submit any data, they can avoid this penalty by reporting a minimum amount (for example, one quality measure). While small rural hospitals may welcome this respite, they need to be careful not to procrastinate and fail to get ready for 2018, when providers might have to submit a year’s worth of data or risk a 5 percent penalty in 2020.

“There’s danger in knowing you’ve got this low bar to achieve for Year 1 to avoid downside risk,” says Steve Smith, a managing consultant for accounting and advisory firm BKD LLP. “Organizations need to make sure that doesn’t lead to a lack of preparation for future performance periods.”

4. Determine the cost of participation

Small rural hospitals should consider the costs and benefits associated with seeking MIPS bonuses, which will be at 4 percent or lower in 2017. “Organizations have to look at the exact dollar figure that’s on the line and weigh that against the costs to implement necessary processes and systems,” Smith says. “The cost could be more than the upside dollars organizations may potentially achieve.”

For example, a CAH with $40,000 in Part B billing under MIPS might have to spend $50,000 on information technology and data analytics to have the potential to earn a 4 percent bonus in 2017.

5. Engage clinicians

Only one of the 14 clinicians employed by the Crete Area Medical Center will be MIPS-eligible in 2017, according to Mussman’s estimate. But she is encouraging all of the hospital’s clinicians to prepare for a value-oriented future as well as the potential expansion of MIPS. “We’re approaching this like it doesn’t matter who falls in or out of MIPS right now. We can either keep our heads in the sand, or we can get ahead of the curve,” Mussman says.

In discussing MIPS with clinicians, Mussman has been stressing the program’s public reporting aspect. “MACRA is putting physicians and other clinicians on a scoring scale, and that score will essentially follow them the rest of their career because it will be tied to their [National Provider Identification]. That score very well may affect how they negotiate employment contracts and insurance compensation moving forward,” Mussman says.