MACRA timeline Source: Centers for Medicare & Medicaid Services


Published 8/1/2016
Shreyasi Deb, PhD, MBA

AAOS Comments on the MACRA Proposed Rule

Implementation timeline will be challenging for physicians
On April 27, 2016, the Centers for Medicare & Medicaid Services (CMS) released its proposed rule on the Medicare Access and CHIP Reauthorization Act (MACRA) and established the Quality Payment Program (QPP). In response, the American Association of Orthopaedic Surgeons (AAOS) and 13 orthopaedic specialty organizations submitted their comments to CMS on June 24, 2016. The letter is available on the AAOS website (

MACRA made the following three important changes in the way Medicare pays for care provided to Medicare beneficiaries:

  • It ended the use of the Sustainable Growth Rate (SGR) formula.
  • It created a system to reward healthcare providers for giving better—not just more—care.
  • It combined Medicare's existing quality reporting programs into one new system.

Time frame
Although the AAOS supports streamlining multiple Medicare physician quality reporting programs into a single system (under the Merit-based Incentive Payment System or MIPS), it noted that the proposed implementation time line is too tight. "Given that these regulations will not be finalized until the fall of 2016, it will be burdensome, if not impossible, for surgeons to get ready for the first performance year of 2017," wrote AAOS President Gerald R. Williams Jr, MD.

AAOS requested that 2017 be treated as a "transition year," when clinicians can start gathering data but would not be required to report them. This would delay the first performance year until 2018.

Further, AAOS requested that the 2-year lag between the performance and payment years be removed. It also asked that CMS release concrete guidelines to clinicians participating in the Alternative Payment Models (APM) program on steps they can take if they realize they may not qualify for an APM bonus payment in mid-2018, when it would be too late to prepare for participating in the MIPS program.

Impact on practices
According to CMS estimates, specialty physicians are more likely than primary care physicians to be penalized under the proposed rule for the MIPS program, in part because they have higher charges than primary care physicians. Moreover, the proposed rule excludes "low-volume" physicians—those with $10,000 or less in Medicare charges and 100 or fewer Medicare patients—from certain MIPS reporting requirements. Because specialty physicians have higher charges than primary care providers, AAOS suggested that they have a different low-volume threshold—$20,000 or less in Medicare charges and 200 or fewer patients. AAOS also noted that CMS could consider using a practice's percentage of Medicare patients to define the threshold levels.

The MIPS program, as currently proposed, is also more likely to have an adverse effect on small and medium-sized practices, according to CMS estimates. AAOS expressed concern over these actuarial estimates and requested that small and rural practitioners have the option to not participate in MIPS.

The MIPS program is proposed to have the following four performance categories.

1. Quality
CMS proposed combining the current Physician Quality Reporting System (PQRS) with other quality reporting mechanisms under Medicare to reduce the reporting burden—an encouraging note. However, some physician specialties such as orthopaedics are likely to be at a disadvantage under this category because no currently validated outcome measures exist in these fields. Until such measures are developed, AAOS suggested using nonvalidated measures, developed by a consensus process between CMS and specialty societies, for reporting purposes.

AAOS requested that CMS keep the current threshold for successfully submitting claims-based measures at 50 percent for the first performance year. Afterward, a stepped increase in threshold level could be implemented as more individual clinician-level measures are developed.

2. Advancing care information
The AAOS commended CMS for reducing the number of required measures and for introducing greater flexibility in the advancing care information performance category. However, the proposed rule changes the scoring methodology without changing the actual measures.

AAOS expressed further concern that there continues to be a pass/fail element in the base performance score and that the reporting period is expanded to a full calendar year, stating that "continuing a 'pass/fail' scoring contradicts the overall aim of removing the 'all or nothing' approach" and the "expansion of the 90-day reporting period to a full calendar year is problematic for new participants."

AAOS commented that the measurement should not be limited to the defined "meaningful Electronic Health Records (EHR) users" and that the populations and measures should be consistent with the Office of the National Coordinator for Health Information Technology's (ONC) plans to measure interoperability under its Interoperability Roadmap.

AAOS is also concerned that it is not yet possible for most private practitioners or even many employed physicians to achieve true interoperability. In part this is due to the current state of installed technology. To meet the goal of interoperability, vendors must be encouraged to develop open application programming interfaces to support the free flow of data among providers and programs.

Until such metrics and prerequisites are developed, AAOS suggested that CMS consider using a single data source for consistency. The only data source shared by all providers is claims data, based on ICD-10 (International Classification of Diseases, 10th Edition, Clinical Modification and Procedure Coding Systems) and CPT (Current Procedural Terminology) coding. This is also the most granular source. Because ICD-10 and CPT specifics are required for billing, these claims data are ubiquitous among all providers in all settings. In addition, wider use by providers of the Z-code section (reasons for encounters) would enable better risk assessment. AAOS has already provided the ONC with additional, more detailed comments on interoperability.

3. Resource use
The performance category "resource use" does not have any reporting requirements for clinicians, which further reduces their burden. However, because physicians do not have complete and ready access to the resource use/cost data, the AAOS argued it is unfair for their use to be rated. In its comments, AAOS also asked for more clarification on how resource use would be scored (at least for performance year 2017) for orthopaedic surgeons who provide services that do not have such measures. For example, total joint arthroplasty and spinal fusion have measures; foot and ankle surgery or shoulder treatments do not.

CMS noted that it would base resource use on condition- and episode-based measures and AAOS offered to collaborate with the Center for Medicare and Medicaid Innovation to develop more musculoskeletal care bundles that would qualify as Advanced APMs.

Another aspect of resource use depends on the relationship and responsibility of clinicians to patients with multiple healthcare providers. The AAOS is preparing comments in response to the CMS Request for Information on patient relationship categories; it has urged CMS to publish the patient relationship codes as early as possible so that physicians can have a better idea of how their resource use will be scored. The AAOS also noted that sophisticated risk-adjustment and detailed attribution methods would be required to fully implement this performance category without disproportionately penalizing physicians who care for higher-risk patients.

4. Clinical practice improvement activities
AAOS urged CMS to expand a proposed study of these activities, to extend the application period, and to use "a bigger pool of participants randomized on the basis of their practice characteristics, clinical specialty, and geographic location."

The second pathway for participating in the QPP is via qualifying for the APMs. The AAOS has been involved with several demonstration projects, but is very disappointed to note that the proposed rule did not list either the Bundled Payments for Care Improvement (BPCI) models or the Comprehensive Care for Joint Replacement (CJR) model as Advanced APMs which provide the potential for higher (than MIPS) rewards and risks for clinicians.

Currently, more than 3,000 orthopaedic surgeons are participating in BPCI models—managing episodes of care at full risk, being reimbursed based on quality, and using certified EHR technology (the three statutory criteria required to be considered an "eligible alternative payment entity"). These groups, contends AAOS, should have a pathway for qualification as Advanced APMs, and it urged CMS to develop one.

AAOS also strongly urged CMS to include CJR, which is mandatory in many areas across the country, as a designated Advanced APM for fiscal year 2019 and to automatically qualify all participating physicians under the Advanced APMs pathway for the "Quality" performance category. AAOS is currently communicating with CMS on refining CJR.

Given that clinicians have little, if any, control over cost and resource use by other partners within an Advanced APM, AAOS requested CMS to reconsider the definition of total risk as required to be borne by an Advanced APM (the maximum amount of losses possible under the Advanced APM track). Rather than base the risk on a percentage of the APM spending target, AAOS proposed limiting the maximum amount of losses to 4 percent of professional services directly attributable to the physician, at least for performance year 1.

Impact on specialty physicians
Based on the actuarial estimates accompanying the proposed rule, AAOS argued that this initiative seems to be a reallocation of resources—away from surgical and other specialty physicians and toward enhanced primary care services. For example, the definition of Medical Home Models (which are designated as Advanced APMs) focuses on primary care. AAOS urged CMS to consider surgical homes and other alternative definitions of Medical Home Models. When specialty physicians and clinicians play the role of the primary physician consultant, they should receive incentives accordingly.

"Although many provisions in the proposed rule are improvements over the current system, a number of steps would better protect specialty physicians, along with small and solo practices, so that Medicare patients have access to the timely, high-quality, affordable specialty care that they need," wrote Dr. Williams. "We are hopeful that CMS will take seriously these concerns and we will continue working to improve care delivery for all Americans."

Shreyasi Deb, PhD, MBA, is senior manager, health policy, in the AAOS office of government relations. She can be reached at

Bottom Line

  • CMS has issued a proposed rule on how it plans to implement the requirements and provisions of MACRA (Medicare Access and CHIP Reauthorization Act); AAOS has commented on the rule, suggesting several changes.
  • As proposed, the rule would reduce some reporting requirements, but other requirements might make it difficult for orthopaedic surgeons to qualify for incentive payments.
  • As proposed, the rule seems to reallocate resources away from surgical and other specialty physicians and toward primary care.
  • AAOS plans to engage with CMS on developing outcome-based measures for musculoskeletal care and redesigning innovative payments models.

Additional information: