SCGhealth Blog


CMS Flexibility on MACRA MIPS Requirements Means They’re Bending Over Backwards to Assure Participation

Tuesday, September 27, 2016

By: Ben Regalado, contributing writer

After considering a delay to the start of the new MACRA payment reform initiatives, CMS recently announced it has decided instead to allow providers to determine the speed that they will be able to implement the new requirements, lessening the potential penalties (and benefits) in exchange for breathing room to begin full participation.

Most physicians, it is believed, will opt for the Merit-based Incentive Payment System (MIPS) methodology over the riskier, though more integrated, Alternative Payment Models (APM) such as Accountable Care Organizations (ACOs) and Patient Centered Medical Homes (PCMH). (That is approaching a record for number of acronyms in a sentence.) Although unstated, it is believed that the new “flexibilities” were made to give consideration to smaller practices who still wish to remain independent.

Although final regulations are not expected until November 1, the MIPS program is on track to begin January 1, 2017, with the impact on payments to be up to +/- 4% in 2019. Those providers who are ready - most likely medium sized to large practices - can jump right in through one of the two original options:

1. Begin with complete reporting on January 1, 2017, participating fully and potentially reaping the full reward.
2. Participate through an Advanced APM.

The new “flexibility” is found with two additional options. These options are graduated to allow for providers to ease into MIPS at a pace best suited for them, while keeping the incentives (or penalties) higher for those who are ready to begin. In these new options:

3. Eligible providers may elect to simply report any data to avoid a negative payment adjustment. This transitional approach is basically a “test the waters” approach to assure systems and process are ready to go for 2018 and 2019, or

4. Eligible providers may choose to report measures over a “reduced” number of days, meaning data reporting begins after January 1, creating an opportunity to earn at least a small bonus payment.

As reported on this site before <http://www.scghealth.com/news/take-on-mips-and-pqrs-from-searfoss>, meeting MIPS threshholds should not be an issue so long as practices are ready with their processes to meet the four aspects of MACRA MIPS reporting. Per CMS <http://www.hhs.gov/about/news/2016/04/27/administration-takes-first-step-implement-legislation-modernizing-how-medicare-pays-physicians.html>, the relative achievements within these four pieces of the puzzle will be given various weights (to change over time), which then will be used to calculate an overall “score”. This score will then determine the amount of increase or decrease in payments that providers could see.

For 2017, eligible providers participating fully will need to focus on these objectives:

A. Reporting and meeting performance thresholds on 6 of more than 200 Quality measures (formerly “PQRS”) - 50% of year 1 score.
B. Cost Control (based on claims data) - 10% of year 1 score.
C. Reporting on participation in some of the more than 90 Clinical Practice Improvement activities - 15% of year 1 score.
D. Reporting on activities related to Advancing Care Information (formerly “Meaningful Use”) - 25% of year 1 score.

To be clear once again - this is not a delay like ICD-10. To avoid penalties you should plan to report quality data beginning at some point in 2017. Continue to watch this site for more information once the final rule is released.


JW Modifier Postponed Until January 2017

Monday, June 27, 2016

By: Angela Little, Client Services Specialist

Who is JW?
Do you know if your Medicare Administrative Contractor (MAC) requires the modifier JW on claims with discarded drugs or biologicals? If not, you now have time to check your policy because, if it doesn’t now, it soon will. The change goes into effect with all MACs on January 1, 2017. However, you still might be wondering what exactly this means and how these changes affect you and your practice.  

The nitty gritty
The JW requirement is the agency’s latest attempt to rein in, or at least chart, Medicare drug costs and waste. The policy change requires standardization among all MACs regarding the use of the JW modifier Drug amount discarded/not administered to any patient. Therefore, effective January 1, 2017, physicians and hospitals will be required to use the JW modifier to identify discarded drugs and biologicals when processing Part B claims for drugs and biologicals. Providers will also be required to record the discarded amounts of drugs and biologicals in the patient’s medical chart.

This policy change and uniform use of the JW modifier allows CMS to effectively track billing and payments for discarded drugs and biologicals. The JW modifier is only applicable to single dose vials, it does not however apply to multi-dose vials nor to drugs purchased under the Competitive Acquisition Program (CAP).

Additionally, the modifier itself does not apply if the actual drug administered is less than one billing unit of the drug. An example of this would be if the unit is 10mg and only 7mg’s are administered, you would not be required nor would you bill a second line for the unused amount. In addition, the requirement for appending modifier JW is applicable in the hospital outpatient setting and physician offices. The modifier however is not required on inpatient claims.

Currently it is up to your MAC to enforce or require use of the JW modifier. The current policy for appropriate use of the JW modifier can be found in the Medicare Claims Processing Manual (100-04), chapter 17, section 40, which was last updated in 2010.

JW in practice
When considering the use of a single dose vial in a procedure which contains 100 billable units and only 95 units are administered to the patient, the remaining 5 units of the single dose vial are now to be discarded, recorded into the patient’s chart and billed on two claim lines. The first line will be for 95 units, the second claim line will include a JW modifier and 5 units. Both claim lines will be paid. You would then record the discarded amounts of drugs and biologicals in the patient’s medical record.

The grey area
While the Centers for Medicare & Medicaid Services' (CMS) plans have yet to include drug manufacturers, push back has begun after findings from a recent major study concluded that Medicare and private insurers waste nearly 3 billion on cancer drugs alone each year. This waste would drastically decrease if drug manufactures began offering smaller doses in the US as is done in international markets. What is not yet clear is whether an unused drug or biological should appear on claims in all situations with modifier JW, even if there is no reimbursement expected. So while the many stakeholders are pleased by CMS’s decision to delay the change in policy, the agency can use this time (hopefully) to close up any loop holes.

What now?
MAC policies have varied since 2003 – not all required the use of modifier JW to record billing discarded drug or biological. The new policy however makes this requirement universal across all MACs, and also added to the requirements. In the interim be certain that your billing team knows about this new policy, (especially if your MAC did not previously require the use of Modifier JW). Also it will become good practice to make sure you are documenting in the patient’s record any drug and biological that is left unused or discarded form a single dose vial.


Digital Reality: X-Ray payment changing to push tech

Thursday, April 07, 2016

In an effort to create a faster and more efficient workflow among physicians and their ability to view and share x-rays, the Medicare rate on computed radiography (CR) will be reduced to encourage providers to begin to use digital radiography (DR). Payment reductions will also be made on analog equipment but that is not expected to have nearly the impact that the CR reductions will. Many facilities upgraded to CR before DR was an option, and therefore today there are thousands of CR equipment being used in the United States.

What made the change come about?
Officially the reductions will come from provisions that were inserted into the Consolidated Appropriations Act of 2016, which was enacted into law in December 2015. The idea comes with the promise that the use of CR will speed workflow and create an environment that is more efficient for providers and patients alike. 

How will the reductions work?
Beginning in 2017 reductions will be made on payments for any imaging done on analog machines. Starting in 2018, payments for imaging studies performed on CR equipment would be reduced by 7% for the next five years, and 10% after that. Imaging facilities will therefore have to decide whether to:

1. Spend the money to upgrade their CR equipment to DR (with integration into your certified EMR system) or

2. Not get paid as much. The anticipated reductions are between 7-10% in Medicare payments for x-ray studies beginning January 1, 2017. The proposed changes in the relative value units will be published in the proposed rule due out on or about July 1, 2016.

What about the patients?
The move to CR not only enables the patient to have quicker, more effective access to images, but it also exposes patients to less radiation then its counterparts. The biggest effect the new pay rates will have on patients is the ripple effect the lower pay rates from Medicare will have on providers and facilities already relying on slim resources.

What does this mean?
What it means is that the medical industry is making another step in the direction of efficiency as an unfunded mandate. What it also means is that a large number of facilities will have an expensive decision to make. Digital is clearly where medicine is headed, so the payment penalties could force some to bite the bullet quicker then they might have and invest in the latest and greatest the x-ray industry is offered. However, for those who cannot simply cannot afford to upgrade at this time, they will have to bear the brunt of the penalties until they are able to switch. For facilities that already struggle for funding these penalties could add up quickly and affect their ability to function.


Expect verification if you try to get quality reporting bonus with fewer measures than required

Wednesday, August 27, 2014

There is one exception to the onerous new reporting requirements for the Physician Quality Reporting System (PQRS) program in 2014 – but don’t expect to use it without CMS verifying eligibility.

As you may know, there’s a lot more on line now for the PQRS program. Those who report successfully in 2014 will not only earn a 0.5 percent bonus payment in 2015, those with 100 or more providers will avoid a 2 percent payment penalty in 2016 for not successfully reporting.

But PQRS became more difficult in 2014, especially for practices attempting to do it successfully via the claims-based reporting approach. Successful reporting in 2014 requires a practice to report nine or more PQRS measures across three different measures domains for at least 50 percent of all eligible patients.

Previously, practices were required only to report on three measures overall, regardless of measures domain, for 80 percent of the patient population.

The one valid reason that you have to not report on nine different measures across three different measures domains is that you can’t – if you don’t have enough of a diverse patient population for it to be possible to report nine measures across three groupings, you’ll still get the full bonus for reporting all of those measures and groupings that you are able to report.

Before you take this step, do your due diligence to make sure you’re not missing anything. First, there is a lot of money at stake, especially for those practices that may see payments cut in 2016 for failure to successfully report. 

Second, CMS has a comprehensive data analysis program in place to do its own verification of whether it believes you could have reported on more measures. 

Measure Applicability Validation – and how it works
The program CMS uses is called the Measure Applicability Validation, or MAV, program.  What that essentially means is that CMS will use a data analysis system to determine whether it believes that there were more measures that your practice could have chosen to report, but didn't report.

For those practices that report successfully on nine measures across three measures domains, MAV doesn’t apply. Even if you could report on more measures, you still have the latitude to choose the measures you wish to report within the new parameters set as part of 2014 PQRS.

When the MAV analysis determines that the provider could not have reported on additional measures or measures domains beyond what was reported, then that provider would receive a 2014 PQRS incentive and avoid a 2016 penalty, regardless of the total number of measures reported. 

MAV applies to claims-based and registry reporting – though in most instances, a registry that automatically collects and submits batch data is a more efficient way to report, even if it comes at a nominal cost. 

MAV does not apply to measures groups, EHR, Group Practice Reporting Option (GPRO), Web Interface and Certified Survey or Qualified Clinical Data Registry reporting. These systems are generally considered to be less error-prone than claims-based reporting and even registry-based reporting.

Time to change how you are reporting?
Perhaps the biggest takeaway from the MAV and its potential analysis and validation is that if you are claims or registry reporting fewer than nine measures across three measures groups, you better have a high degree of confidence you are doing it correctly. 

When you make a mistake, and neglect to report measures that could have been reported, expect CMS analysis to suss it out and potentially cost your practice thousands of dollars in lost bonuses and potential penalties. 

When the PQRS was first established, claims-based reporting was pretty much the only way to do it, and many practices rightly objected to what was considered to be a major time investment for a minimal return. As it was, the only thing at stake were bonus payments from CMS that were unlikely to cover the cost of collecting and submitting the claims data.

Those days are over – and the days of claims-based reporting even being an option may not be too far behind. In its 2015 proposed Medicare Physician Fee Schedule, CMS raises the specter of eventually not allowing claims-based reporting, given its high error rates and the potential that has for delivering unreliable quality data. 

In addition, a good number of practices have access to data delivery mechanisms that have a higher level of reliability without the drain on productivity of claims-based reporting. Registry-reporting, while also subject to the MAV, typically involves submitting claims batches to the registry, which extracts the data needed to establish the PQRS reporting and submits it on the practice’s behalf.

Many EHR systems also have the capability to extract the necessary data across all patient encounters and batch report to the Medicare Administrative Contractor. Much like the CMS computer, expect your EHR to be thorough and not miss reporting opportunities. As a result, if you are reporting on fewer than nine measures across three domains, it is far more likely your reporting information is accurate. 

Penalties to add up, worsen
The last thing not to do is thumb your nose at the PQRS program and accept that you’ll be penalized a few percentage points of reimbursement as a result. The penalties will only worsen. As it stands now, larger practices that fail to demonstrate that they are delivering value – defined as higher costs and low outcomes – could see payments cut by as much as 4 percent in 2017.


That’s only for starters. It may take 2-3 more years, but CMS and private payers are widely expected to baseline quality data to determine how much to pay for services, leaving the potential for practices unaware of their own quality data to face permanent pay cuts. 


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