Everyone must rethink their approach to the delivery of care. It is no longer a viable option to maintain the fee-for- service (FFS) mindset. New measures from CMS will push healthcare to the next level of reform where the patient is increasingly at the center of care and care payment.

1. 1
The Imminent Restructuring of
Medicare Reimbursements
Driven by MACRA
Under
Pressure
PHYSICIANS, GET
READY. HEALTHCARE
CHANGES YOU CAN’T
AFFORD TO IGNORE.

2. 2© Geneia LLC
Under Pressure

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Content
Abstract ..............................................................................................4
Introduction .......................................................................................5
Medicare Payment Goals .................................................................6
A New Way to Measure Quality ......................................................9
Huge Annual Payment Adjustments.............................................10
MACRA Rewards .............................................................................12
Innovation & Technology................................................................16
Geneia...............................................................................................18

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Abstract
There is a new timeline for change in healthcare reform. Leaders of
healthcare delivery systems cannot afford to ignore this accelerated
pace. The Centers for Medicare & Medicaid Services (CMS) are
leading the charge with increased value and quality structures, and the
commercial sector will not be far behind.
Physicians and physician-led practices must make the time to
understand these seismic changes that fundamentally alter their
Medicare reimbursements or watch them dry up.
While the Medicare Access and CHIP Reauthorization Act of 2015
(MACRA) impacts a wide breadth of issues, this paper focuses on the
reimbursement structure changes that are impacting physician-led
delivery systems with 15 or more medical professionals. It is expected
that larger hospital systems and the commercial sector will soon face
similar adoptions.

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Introduction
Physicians and healthcare delivery system leaders are not prepared for the
accelerated pace of change, nor the depth of change, that is happening
right now in Medicare reimbursements. This year – 2016 – is the fulcrum,
the tipping point. Physicians need to pay attention and take action today
– and throughout this year – or be left wondering why their Medicare
reimbursements have dried up.
The Centers for Medicare & Medicaid Services (CMS) have reset the bar
for Medicare reimbursement and private payers will not be far behind. In
the words of Andy Slavitt, acting administrator at the Centers for Medicare
& Medicaid,
“Whether in ACOs, bundled payments, primary care, oncology or
soon to be specialty models we support as we implement MACRA, we
will reward for better care, higher quality care, more coordinated and
patient centered care – not simply more care. And our goal isn’t simply
to launch new models, but to support better outcomes and a simpler
delivery system.”1
What this means is that everyone must rethink their approach to the
delivery of care. It is no longer a viable option to maintain the fee-for-
service (FFS) mindset. New measures will push healthcare to the next level
of reform where the patient is increasingly at the center of care and
care payment.
The driving force behind all this is MACRA – Medicare Access and CHIPS
Reauthorization Act of 2015. MACRA is a complex and multi-year initiative
that steadily pushes healthcare to its next iteration of value-based care.
1 Slavitt, A., (Feb. 6, 2016). “Acting Administrator Slavitt Speech Before the National Rural Health
Association.” CMS.

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In January 2015, the U.S. Department of Health and Human Services
(DHHS) announced two new primary goals for value-based payments and
alternative payment models (APMs) in Medicare fee-for-service payments:
Medicare Payment Goals:
Shifting to value in three giant steps
Physician practice leaders need to understand how to become aligned
with these new measures to maintain and grow revenue streams.
Understanding the framework begins with the primary legislative driver,
MACRA. In addition to repealing the sustainable growth rate (SGR),
MACRA changes the way Medicare measures and rewards value over
volume. It combines, modifies and transitions several existing value
programs into something new, with the goal of putting the patient at the
center of care and care payment.
1. By the end of 2016, 30% of Medicare
payments tied to quality or value through
APMs (categories 3-4), and 50% by the
end of 2018.
2. By the end of 2016, 85% of Medicare
fee-for-service payments tied to quality
or value (categories 2-4), and 90% by the
end of 2018.
These figures are staggering. Stop for a
moment. Right now. Pause and estimate how
large your Medicare patient population is.
What would it mean to your practice to have
reimbursements calculated differently for such
a significant portion of your patients?
2018
2016
90%
Medicare
FFS
Payments
tied to
Value
85%
Medicare
FFS
Payments
tied to
Value

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Step One:
Transform existing quality measures
Step Two:
Establish tough objectives
Through MACRA, the DHHS has several objectives:
Provide several different pathways that have varying levels of risk and
reward for providers to more closely link their payments to value
Expand opportunities for participation in APMs by providers
Reduce and minimize the reporting burden for APM provider
participants
Increase transparency and understanding of each provider’s
standing with regards to MIPS and/or APMs
Support multi-payer initiatives and the development of APMs in
Medicaid, Medicare Advantage and other payer arrangements
Repeals sustainable growth rate (SGR)
Changes the way that Medicare measures and rewards value
over volume
Combines several existing value programs into the Merit-Based
Incentive Payment System (MIPS)
Establishes bonus payments for participation in qualified alternative
payment models (APMs)

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Step Three:
Drive real change, really fast
That is a significant amount of information to unpack. Let’s go back and
look at what it means to have repealed the SGR. The SGR was designed
to curtail a feared tendency that providers would increase services to
increase reimbursements based on FFS. However, in practice, the SGR
created an administrative scrambling that left providers and policy makers
frustrated and it obstructed true reform.
In its place, MACRA provides modest annual reimbursement increases to
allow delivery systems time to adjust from FFS to value-based measures:
June 2015: Fees increased by 0.5% automatically
2016 – 2019: Fees increase by 0.5% automatically
2019 – 2026: No automatic fee increases (path to increasing
reimbursement via APMs or high performance)
Recall that the overall objective is to transform healthcare and to reward
providers who give better care, not just more care. Better care is ultimately
a good result for the healthcare system as a whole. This new fee schedule
sends the message that providers who embrace value-based care delivery
models and act toward value will have their successes rewarded. Those
that do not will find their Medicare reimbursements virtually frozen in time
for the next decade.

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A New Way to Measure Quality
Merit-Based Incentive Payment System (MIPS)
Understanding how value will be measured is critical to making
viable decisions for your practice to be ready for measurement
year 2017.
To streamline measuring value, MACRA modifies and
incorporates three existing value measurements into the
new Merit-Based Incentive Payment System (MIPS). The
measurements being modified are:
Physician Quality Reporting Program (PQRS)
Value-Based Payment Modifier
Medicare EHR Incentive Program
Beginning in performance year 2019, physicians who are rated
via MIPS will receive a single composite score that factors in
performance in four weighted categories:
Quality
Resource use
Clinical practice improvement activities
Meaningful use of certified EHR technology
Physician MIPS scores depend on meeting quality
benchmarks, managing resource use, continuously improving
clinical practices and using EHR technology in a way that
improves outcomes.
2017
2019

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Huge Annual Payment
Adjustments
Up to 9% — up or down
Physician reimbursement rates
will be altered according to their
MIPS score. Providers will either
receive positive, negative or neutral
adjustments on an increasing
scale beginning with +/- 4% in
performance year 2019 (as measured
in measurement year 2017). This rate
will incrimentally grow until +/- 9% in
2022. This means that low-scoring
providers may see their Medicare
payments cut by up to 9%.
MIPS scores are crafty. Providers
who neither improve nor get worse
will not be able to easily maintain
their status quo. Even a single point
above or below the MIPS threshold
will result in a positive or negative
reimbursement rate alteration.
$
Measurement
Year
MIPS
Payment
Year
2022
2019
2017
Payments
adjusted
up to
9%
Payments
adjusted
up to
4%
10

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1
2
3
Three Exceptions to MIPS
Adjustments
Not everyone faces the same risk
Not every physician-led practice will be evaluated via MIPS. There
are three exceptions:
Providers in their first year participating as a
Medicare provider
Providers in eligible alternative payment models who
qualify for the bonus payment
Providers whose practices are below the low-volume
threshold (15 or fewer medical professionals)

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MACRA Rewards:
Up to 5% annual lump sum for APMs
Alternative payment models represent a new way to structure Medicare
payments. They focus reimbursement on quality and value. According to
MACRA, APMs include:
CMS Innovation Center Model (other than a Health Care
Innovation Award)
Medicare Shared Savings Program (MSSP)
Demonstration under the Healthcare Quality Demonstration
Program
Demonstration required by federal law
Physicians already participating in APMs are clearly on the preferred path.
The top tier – the providers considered ‘high performing’ or participating
in ‘qualifying’ alternative payment models – will yield the greatest
reimbursement bonuses. However, all providers participating in APMs will
receive favorable MIPS scores and APM-specific rewards, even if they are
not rated as high performing or participate in qualifying APMs.

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5% annual lump sum bonus payment 2019 – 2024
Higher fee schedule updates 2026+
APM-specific rewards
Excluded from MIPS adjustments
MACRA Rewards:
For qualifying APM participants
1
2
3
4

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MACRA Rewards:
Qualify for bonus payments
Eligible APMs are those practices with quality performance and value-
based care systems already in place. The systems in place are comparable
to MIPS. Therefore, CMS acknowledges that these systems are satisfactory
and meet the overarching objectives of transforming healthcare. These
types of systems:
Base payments on quality
Use certified EHR technology
Bear more than a nominal amount of financial risk OR be a medical
home model expanded under Center for Medicare & Medicaid
Innovation (CMMI) authority
To be qualified, a physician must have a certain percentage of
Medicare patients or payments through a qualifying APM. In 2021, this
percentage can be reached through a combination of Medicare and
non-Medicare payer arrangements.
Earn favorable MIPS scores & APM-
specific rewards for participating in
APMs -- even if those APMs are not
high performing or qualified.

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MACRA Rewards:
For non-qualifying APM participants
It is worthwhile to repeat that providers participating in APMs that are not
high performing or do not meet the criteria for ‘qualified participant’ will
still receive favorable MIPS scoring in the ‘clinical practice improvement
category’ and still receive APM-specific rewards. This means that all
APM participants earn rewards and are on the path to maximizing those
rewards while minimizing their risks.
Alternative payment models and eligible APMs are the paths that offer the
greatest potential risk and reward going forward.
MACRA is the vehicle that will drive Medicare and, eventually non-
Medicare payment arrangements, to be based on value. The goal is to put
the patient at the center of care and care payment. By offering the classic
combination of carrots – in the form of attractive incentives – and sticks –
in the form of stringent consequences – physicians and physician practices
are being strongly steered down the path of alternative payment models.
The time to act is now. Physicians must carefully (but quickly) consider their
path to value and get busy making it happen. Measurement year 2017 is
nearly upon us. Providers with substantial Medicare patient populations
must embrace innovation and the quality measures that provide the best
opportunity for maintaining and growing their reimbursement structures.
MACRA:
Looking ahead

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Innovation & Technology
Making it work for you
One of the goals of MACRA is to spur innovation – to encourage delivery
systems to work with technology providers to develop platforms that
take into consideration the unique needs of their providers, their patient
communities and the larger communities in which they reside. The CMS
has stated its belief that the transformational process will,
“be most successful when physicians and innovators can work together
directly to create the best tools to care for patients.”1
Now that technology is available within virtually all care and cost settings,
it is time to take everything to a new level of functionality, one that works
within the natural clinical workflow, one that reconnects physicians to their
patients without undue administrative burden, one that accurately predicts
illnesses before they occur to avert and treat conditions and disease early.
2 Slavitt, A., & DeSalvo, K., (Jan. 19, 2016). “EHR Incentive Programs: Where we go Next.” CMS.
2

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*

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Geneia
About us
Geneia is a healthcare technology company that helps healthcare
organizations, physicians, payers and employers better understand,
evaluate and manage the health of patients, members and employees.
Using our advanced analytics platform, remote patient monitoring tool,
and education and research institute, we improve outcomes, lower cost
and restore the Joy of Medicine throughout the healthcare landscape.
Sources
American Medical Association (2015). A Guide to Physician-Focused Alternative Payment Models.
Center for Healthcare Quality and Payment Reform.
CMS (2015). The MACRA Path to Value.
CMS (2015). CMS Quality Measure Development Plan: Supporting the Transition to the Merit-Based
Incentive Payment System (MIPS) and Alternative Payment Models (APMs).
CMS (2015). The Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models
(APMs): Delivery System Reform, Medicare Payment Reform, and the MACRA.
Slavitt, A., (Feb. 6, 2016). Acting Administrator Slavitt Speech Before National Rural Association
CMS.
Slavitt, A., & DeSalvo, K., (Jan. 19, 2016). EHR Incentive Programs: Where We Go Next. CMS

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