ARTICLE IN BRIEF
With health policy changes coming from the Centers for Medicare & Medicaid Services, AAN leaders encourage solo practitioners and small practices to hang tight as the Medicare Access and CHIP Reauthorization Act regulations, as currently proposed, include some provisions to support them. In addition, the AAN is working on tools to assist small practices with the new rules.
Most small physician practices may see their Medicare pay decrease under the Quality Payment Program, prompting concern among some solo practitioners and small practices that they will be unable to maintain their independence.
Elaine Jones, MD, FAAN, a solo practitioner in Bristol, RI and member of the AAN board of directors, said she is concerned about the potential impact on small neurology practices unless changes are made to the proposed Medicare Access and CHIP Reauthorization Act (MACRA) regulations.
That said, she and other AAN leaders encourage solo practitioners and small practices to hang tight for the time being because the Quality Payment Program may eventually become more tenable. The Centers for Medicare & Medicaid Services (CMS) maintains that it does not want to put solo- and small-practice physicians out of business and its MACRA regulations as currently proposed include some provisions to support them.
Indeed, physicians from many specialties will be urging CMS to make its new payment methods palatable for small and solo practices — and America's aging population will help make the case for neurologists.
“It's not like everything is going to come crashing down. People are still going to need neurologists,” said Gregory Esper, MD, MBA, a neurologist and director of new care models at Emory Healthcare and vice chair of the MEM Committee. “People are still going to have Alzheimer's and they are still going to have Parkinson's, and neurologists will be valued accordingly.”
MEM Committee Chair Orly Avitzur, MD, MBA, FAAN, added that members of the MEM Committee feel optimistic that market solutions will emerge to assist private independent practices of all sizes. She noted, for example, that her independent physician association formed an accountable care organization a year ago, which handles some of her reporting including measures for the Physician Quality Reporting System (PQRS).
“The Academy is working to support practices like mine through the small and solo task force chaired by James Stevens, MD, and through the AAN Axon Registry™,” she said. “And MEM is working on developing a variety of tools to assist small and solo practices with the policy changes.”
WHY MIPS MATTERS
MACRA replaces the sustainable growth rate formula with two payment tracks: Merit-based Incentive Payment System (MIPS) and advanced alternative payment models (APMs). Approved by Congress in 2015, MACRA has the broad goal of improving the value of health care services by holding physicians, hospitals, and other provider organizations accountable for the quality and cost of the care they deliver. CMS issued its proposed rule for the QPP in May; its final rule is expected in November.
In the long run, CMS wants to see physicians in what it calls advanced APMs such as the Medicare Accountable Care Organization (ACO) options in which physicians have considerable financial risk tied to their performance. Physicians who participate in advanced APMs will qualify for a 5 percent Medicare incentive payment in the years 2019 to 2024, and the incentive will increase after that; MIPS participants will not be eligible for the incentive.
But when the new pay models first go into effect in 2019, more than 90 percent of US physicians will be paid in the MIPS system because there will be few APMs approved by CMS by that time. An even higher percentage of neurologists will be paid through MIPS because there will be no neurology-specific APMs as of 2017 — the performance year that will determine physician payment in 2019. The AAN has developed draft APMs for headache care and treatment of epilepsy, but the Academy's Payment Alternatives Team does not expect them to be approved in the immediate future. [See the Neurology Today article, “Dollars and Sense: A Value-Based Payment System Proposed for Epilepsy and Headache Care,” http://bit.ly/NT_ValueBased.]
HOW MIPS WORKS
MIPS is the pay system for the foreseeable future, and here's how it works, according to the CMS proposed rule:
- Each physician's pay will be based on his or her composite score in four performance categories: quality, resource use, meaningful use of electronic health record (EHR) technology, and clinical practice improvement activities. This is essentially a roll-up of the CMS Physician Quality Reporting System (PQRS); its Value-Based Payment Modifier Program; its EHR Incentive Program; and practice improvement activities that have not yet been defined.
- Under MIPS, each physician's 2019 Medicare pay will be adjusted upward or downward by up to 4 percent to reflect his or her performance in the four categories in 2017. The maximum pay adjustments will increase incrementally to 9 percent in 2022 and beyond.
- MIPS is a zero-sum game, meaning that the upward adjustment for the best performers will come from physicians who do not do as well. In its proposed rule, CMS projected that 59 percent of neurologists will see a positive payment adjustment under MIPS, while 41 percent will take a hit.
WHAT MIPS COULD MEAN FOR YOU
The majority of practices with at least 25 clinicians are expected to see pay increases under MIPS, according to the government's projections. But for solo and small practices, the MIPS story is quite worrisome: CMS projects that 87 percent of solo practitioners and 70 percent of practices with two to nine clinicians will see a negative adjustment to their Medicare pay. (See the sidebar, “MACRA Ahead: What to Do Now.”)
Ingrid Lund, practice manager of research and insights at Advisory Board, which serves large independent physician organizations, thinks the new payment systems will prompt small practices to seek safety in size.
“We have seen a consolidation trend across the industry broadly for quite some time, and MACRA absolutely, in our estimate, will push that along,” she said. “I don't think it necessarily means the end of small practices, but we will see some small practices look to no longer be small practices.”
As of 2015, 35 percent of US physicians were in groups of nine or fewer, down from 40 percent in 2013, according to a recent analysis published in Health Affairs. Likewise, hospital employment has been a growing trend. American Hospital Association data show that community hospitals employed 249,191 physicians and dentists in 2014, a 20 percent increase from five years earlier.
Health care attorney Charles Buck, a partner in McDermott Will & Emery, forecasts that MACRA will accelerate those trends. “I think the fear of a 9 percent cut (in MIPS by the year 2022) is greater than the allure of the possibility of receiving a 9 percent gain,” he said. “And if you want to get into the advanced APM world, the competitive advantage is going to be with larger groups, or system-affiliated groups that have the capital, the infrastructure, and the expertise to not just survive, but thrive under this new environment.”
NO REASON FOR ‘GLOOMY PREDICTIONS’
A majority of AAN members work in groups of nine or fewer physicians; indeed, a nine-physician group is rather large in neurology.
James Stevens, MD, FAAN, vice president of the AAN board of directors and a partner in Fort Wayne Neurological Center in Indiana, recently chaired an Academy task force that defined a small neurology practice as five or fewer physicians. “Our task force was charged with identifying what the Academy can do to help sustain those practices,” he said. The task force report will be releasing a report on those recommendations.
On average, Medicare beneficiaries account for about 30 to 35 percent of a neurologist's patients, Dr. Stevens said. While MACRA's new payment methods may jeopardize small practices that rely that heavily on Medicare revenue, not all neurologists are in that situation.
Some neurologists may choose to exit the Medicare program entirely and rely on privately insured patients, he said. In some markets, private insurers may raise reimbursement rates to ensure a sufficient supply of neurologists for their members. Or small practices can embrace the MIPS requirements with the goal of being a financial winner in that system.
The AAN Axon Registry, which extracts data from many types of electronic health record (EHR) systems, makes submission of PQRS data easier than in the past. Depending on the final MACRA rules, the registry may also allow practices to submit other MIPS-required data to CMS, Dr. Stevens said.
Or small practices may choose to simply ignore MIPS for a few years and see what happens. Dr. Esper pointed out that that option may, in fact, work well for some practices.
Although the majority of neurology practices have participated in the CMS incentive programs, participation is not universal. More than 30 percent of eligible neurologists did not participate in PQRS in 2014, the most recent year for which data is available, and they are being assessed penalties for sitting on the sidelines.
If those practices are also eschewing the EHR incentive program and the value-based payment modifier program, they will be subject to financial penalties totaling 10 percent of their Medicare payments in 2018. However, when MIPS goes into effect in 2019, the maximum penalty for not participating in those programs will be only 4 percent of Medicare pay.
“If they are not doing any of the programs now, they stand to be losing more now than they would under MIPS,” Dr. Esper said.
Realistically, some neurologists are likely to respond to MACRA by seeking hospital employment or by merging their practice to become part of a larger entity. While Dr. Stevens supports the government's goal of using payment reform to improve the value of health care, he thinks CMS will come to regret any big increase in provider consolidation.
He pointed to recent research published in the New England Journal of Medicine that shows that independent primary care groups participating in the Medicare Shared Savings Program, an accountable care organization, generated more savings that hospital-integrated groups. Thus, he thinks independent physician practices that can ride out the next few years may see the CMS policy change again.
“As typically happens in life, the pendulum swung one way and so the percentage of physicians who ended up being employed (by health systems) grew significantly in the past five or six years,” he said. “Now several people are questioning the wisdom of that. We will see which way it swings four or five years from now.”
THE SOLO NEUROLOGIST'S VIEW
While MACRA's payment systems are new, the government's march toward paying for value instead of volume started years ago with PQRS, the EHR Incentive program, and other initiatives. Dr. Jones has been on board, participating in each initiative as it was launched and finding a way to make it work for her practice. But the proposed MACRA rule is giving her pause.
For one thing, although the MIPS performance period starts in 2017, some details involving participation will not be known until the final MACRA rule is published in November, giving her very little time to prepare. For another, MIPS put her practice in competition with every other neurology practice in the country for a fixed pool of money; good performance in the four domains — quality, resource use, EHR, use and clinical practice improvement activities — won't count for much if large practices do substantially better.
“My practice cannot handle less than I make now,” she said. “Every year I make less because my expenses go up but my payments go up maybe one-half percent, if I'm lucky. You just can't run a practice of my size on those kind of numbers forever.”
Dr. Jones thinks that, as currently proposed, MACRA will fuel consolidation, but CMS will eventually recognize that it is a problem. For the time being, she intends to supplement her income with other revenue streams — for example, contract work in teleneurology and EMG — rather than give up her independent practice.
“As some of these things roll out, people will realize the unintended consequences and fix them,” she said. “It's a matter of riding through the storm until that relief comes.”
MACRA AHEAD: WHAT TO DO NOW
Small and solo practices that wish to survive MACRA must be proactive, starting immediately, Ingrid Lund, practice manager of research and insights at Advisory Board, told Neurology Today. Step 1 is learning how MIPS will affect your practice financially.
“My advice would be to look at your Medicare population and do some estimates on how much MACRA could potentially hurt you,” said Elaine Jones, MD, FAAN, a member of the AAN Board. “The payment won't come until 2019, but it is based on performance starting next year.”
Following are some next steps to consider:
- Independent practices that are in a clinically integrated network or other alignment model should inquire about reporting tools and other MACRA supports.
- When CMS issues its final MACRA rule later this year, check out the information about “virtual groups.” The proposed rule said very small practices will be allowed to partner into virtual groups for reporting purposes, but details were scanty. Depending on the final rule, this may be a good opportunity for solo practitioners and other small practices, Lund said.
- Keep an eye out to see what CMS will do to help small practices adjust to MACRA. It allocated $100 million to support small practices, but details on how that money will be used have not yet been revealed.
- If you don't yet use an electronic health record system, get started immediately. “There are EHRs that will help you with billing and other things,” said Gregory Esper, MD, MBA, a neurologist at Emory Healthcare and vice chair of the AAN's Medical Economics and Management Committee. “They are not great, but you are going to need one, and you're going to have to learn how to use it.”
- Consider participating in the AAN's Axon Registry to submit data for the Physician Quality Reporting System.
- Make sure that each of your Medicare patients is being seen by a primary care doctor. This is key to good resource use, Dr. Esper said, and that is one of the performance domains on which your practice will be evaluated.
- While the newly announced flexible reporting options for 2017 offer some relief, do no let them delay your efforts altogether. Providers can face penalties if they fail to report. “The payment change in 2019 is written into the law, so Congress alone can change that; CMS cannot,” Lund said. “Further, the full performance period is set to start in 2018 and there is a clear first mover advantage.”
- Be vigilant in learning about MIPS. Dr. Jones encourages neurologists to look to the AAN to stay abreast of new information and make adjustments to their practices in response to it. “You have to stay on top of things because, if you don't, you could get into trouble quickly,” she said. “I do think over the next few years, there will be some relief and we can continue to practice in these smaller practices. It's going to get tough, but hang in there.”
GET READY FOR THE QUALITY PAYMENT PROGRAM
The Quality Payment Program (QPP) kicks in on Jan. 1, 2017, but physicians will have options for reporting their performance in the first year.
“In recognition of the wide diversity of physician practices, we intend for the Quality Payment Program to allow physicians to pick their pace of participation for the first performance period,” the Centers for Medicare & Medicaid Services said in a prepared statement. “Choosing one of these options would ensure you do not receive a negative payment adjustment in 2019.”
Option 1: Test the QPP.
As long as a physician submits some data to the QPP reflecting performance after Jan. 1, 2017, he or she will avoid a negative payment adjustment. This option is designed to allow physicians to make sure their reporting system is working and to prepare for broader participation in subsequent years.
Option 2: Participate for part of the calendar year.
A practice's performance period could begin later than January 1, 2017, and still qualify for a small positive payment adjustment. For example, if a practice submits data for part of the calendar year for quality measures, technology use and improvement activities being implemented, a small positive payment adjustment is possible.
Option 3: Participate for the full calendar year.
Practices that start their performance period on January 1 and submit data for the entire year could qualify for a modest positive payment adjustment.
Option 4: Participate in an Advanced Alternative Payment Model.
A small percentage of physician practices are positioned to participate in the QPP by joining an advanced Alternative Payment Model, such as Medicare Shared Savings Track 2 or 3 in 2017. Those practices would potentially qualify for a 5 percent incentive payment in 2019.