Because of MIPS (a section of Medicare’s MACRA law), in coming years pathologists who participate will receive a bonus of as much as 9%, while those who do not participate will be penalizing up to 9%

If you are an anatomic pathologist, are you prepared to be paid more by Medicare starting on January 1, 2017? Do you and your pathology practice administrator know that, if you and your pathology group do nothing in 2017, Medicare could pay you significantly less in 2019 and the years beyond?

Answer no to either question and you have money at risk. In 2017, Medicare introduces a new payment program called the Merit-based Incentive Performance System (MIPS). This was authorized as part of the Medicare Access and CHIP Reauthorization Act (MACRA), which was passed in 2015.

Pathologists Have Opportunity to Earn 4% Medicare Incentive

Under the proposed final rule released by CMS on April 27, 2016, pathologists have the opportunity to earn an additional 4% from Medicare in 2019—but only if they participate in MIPS and report certain performance data.

On the other hand, failure to participate in MIPS during 2017, which Medicare officials describe as “noncompliance,” means that Medicare will deduct 4% from a pathologist’s total Medicare payments, beginning in 2019.

“This may not sound like much money,” stated Robert L. Michel, Editor-in-Chief of The Dark Report, sister publication to the Dark Daily. “After all, if a surgical pathologist bills, say, $500,000 during 2019, and 40% of that was Medicare, then the year-end bonus would be $8,000. Alternatively, the penalty for non-participation in MIPS would be a deduction of $8,000.

“However, 2017 is simply the baseline year for MIPS, and the percent paid as a bonus or penalty will be increased each year from 2019 through 2022,” Michel continued. “The highest bonus will end up at 9%, or $13,500, and the most severe penalty is scheduled to be 9%, or $13,500, per the example above.”

CAP Estimates Impact of MACRA on Pathology to Be $1.5 Billion

The financial consequences on pathologists will be significant. In its own study of MACRA, the College of American Pathologists states that “the MIPS program is estimated to have a $1.5 billion overall impact on the pathology specialty beginning in 2019.”

This MIPS timeline (above) was prepared by the Centers for Medicare & Medicaid Services. Pathologists and pathology practice administrators should take note of two items presented in this table. First, under ‘FEE’, CMS is showing that the 0.5% annual update to the physician fee schedule stops at 2019. There will be no more inflation adjustments after that date. Second, under ‘MIPS’, the amount of the maximum annual incentive that can be earned by compliant physicians is shown. It starts at 4% in 2019 and increases to 9% by 2022. (Graphic by CMS.)

This MIPS timeline (above) was prepared by the Centers for Medicare & Medicaid Services. Pathologists and pathology practice administrators should take note of two items presented in this table. First, under ‘FEE’, CMS is showing that the 0.5% annual update to the physician fee schedule stops at 2019. There will be no more inflation adjustments after that date. Second, under ‘MIPS’, the amount of the maximum annual incentive that can be earned by compliant physicians is shown. It starts at 4% in 2019 and increases to 9% by 2022. (Graphic by CMS.)

However, Michel says that the incentives and penalties are only part of this important story about Medicare payments to physicians—including pathologists. “In their analysis of MIPS, most experts have omitted an important additional factor that will cause a decrease in the Medicare earnings of individual pathologists,” he noted. “The MACRA law ended the sustainable growth rate (SGR) formula that Congress used to set the physician fee schedule. Thus, MACRA establishes an annual fee schedule update of 0.5% for each year from 2016 through 2019. After that date, the yearly increases to the physician fee schedule that were based on inflation will cease.

“In its place, MACRA gives those physicians who participate in MIPS an increase in the bonus they earn every year,” explained Michel. “The only way a pathologist is going to see their Medicare payments increase at a rate proportional to inflation each year is to report the data in compliance with MIPS and improve their outcomes.”

Some Non-compliant Pathologists Will Lose Money in Two Ways

“Look at it from the opposite perspective,” Michel continued. “Pathologists who choose not to participate in MIPS from one year to the next will lose income in two ways. First, they will have the Medicare penalty percentage deducted from their total Medicare payments for the year. Second, inflation will reduce the purchasing power of the Medicare fees paid to those pathologists each year, starting in 2019.”

CMS-MACRA-LAN-PPT-400w@72ppi

This graphic was prepared by the Centers for Medicare & Medicaid Services. It shows how physicians, including pathologists, who participate in the MIPS program will be incentivized or penalized. Between the years 2019 through 2022, the incentives and penalties start at 4% and grow to 9%. The amount of the incentive and penalty will be based on the total Medicare payments to individual physicians each year. (Graphic by CMS.)

The bad news for pathologists—and all physicians—is that few of them even know about the MACRA law. And even fewer understand how this new federal statute is designed to accelerate the Medicare program’s transition away from fee-for-service payments to providers. The “average doctor on the street can barely tell you what MACRA is,” declared Lisa Bielamowicz, MD, Chief Medical Officer of the Advisory Board Company in an article published in Modern Healthcare. The story also states that, “a survey released in July by Deloitte found that about half of non-pediatric physicians had never even heard of MACRA, much less understood its implications.”

MACRA Webinar Tailored to Needs of Pathologists, Practice Administrators

Recognizing the serious financial consequences that could befall pathologists and pathology groups that fail to comply with the requirements of MACRA, Dark Daily is producing a special webinar on Thursday, August 25, 2016.

Titled, “Are You Ready for MACRA? What You Need to Know, What Your Pathology Lab Must Do,” this information packed 90-minute session will provide you, your pathology group administrator, and your group’s financial advisors, with a focused understanding of MACRA and what is in the law, including:

• Why Medicare is changing how it pays physicians; and

• The essential steps pathologists must take to maximize the money Medicare will pay them for their pathology professional services in coming years.

Insights about How MACRA and MIPS will Affect Pathologists’ Incomes

Information will be presented by nationally-recognized pathologists who are actively preparing their own large pathology groups to comply with MACRA and MIPS, as well as another important section of the law—Alternative Payment Models (APMs). The speakers are:

F. Michael Walsh, MD, MBA, Chief Medical Officer, Aurora Diagnostics, Palm Beach Gardens, Fla.

Jonathan Myles, MD, Anatomic Pathologist, Cleveland Clinic, Cleveland, Ohio

Randy Eckert, MD, Owner and Partner, Austin Pathology Associates, Austin, Texas

The Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) is comprehensive legislation. One goal of the law was to replace the SGR formula that established payment rates for the physician fee schedule. To do this, MACRA rolls up several existing physician incentive programs and replaces them with MIPS and APMs.

The three “performance to payment” programs that will be replaced by MIPS are the:

Physician Quality Reporting System (PQRS);

Value-Based Payment Modifier; and

Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs.

MACRA’s Merit-Based Incentive Payment System (MIPS) will use a composite performance score that is calculated from four weighted performance categories:

• Quality;

• Resource use;

• Clinical practice improvement activities; and

Meaningful use of certified EHR technology.

Because Medicare launches the MIPS program on January 2, 2017, pathologists and their practice administrators don’t have much time to study the new law and decide how they will comply with the requirements of MIPS. The upcoming August 25, 2016, webinar is specifically designed to provide participants with a working knowledge of MACRA, MIPS, and APMs. More importantly, it identifies the most crucial options available to pathologists who would like to act in a timely basis to comply with MIPS and maximize their Medicare incentive payments each year.

Act now to guarantee your place at this important webinar. You can register by clicking here (or copy and paste this URL into your browser: https://ddaily.wpengine.com/audio-conferences/webinar-everything-you-need-to-know-about-macra-82516.)

—Michael McBride

Related Information:

Webinar: Are You Ready for MACRA? What You Need to Know, What Your Pathology Lab Must Do

MACRA, What’s That? Half of Doctors Don’t Know, Deloitte Says

MACRA: Disrupting the Health Care System at Every Level

CMS Publishes Proposal to Overhaul the Medicare Payment System

How MACRA Will Decimate the Private Practice Physician

Few Docs Ready for Risk under MACRA