Public Policy

Hospitalists prepare for MACRA, seek more changes


“We heard you and will continue listening.”

Those were the words that Andrew Slavitt, then-acting administrator of the Centers for Medicare and Medicaid Services, used in a blog post on Oct. 14, 2016.1 (Slavitt no longer maintains that title since the new federal administration took office on Jan. 20, 2017.)

Mr. Andy Slavitt

Mr. Andy Slavitt

Indeed, when it came to issuing its final rules for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS appears to have considered the input it received, including that from SHM and other physician societies.2

And, it seems they are still listening. Since issuing the final rule, CMS has continued to seek input from stakeholders. The SHM and other groups are working to clarify and pursue improvements to the bipartisan law. Reporting under MACRA begins this year and several changes that appeared in the final rule already may make living with the law less challenging for hospitalists.

Dr. Ron Greeno

Dr. Ron Greeno

“We think this will all end up fine, but we’re still working on it,” said Ron Greeno, MD, MHM, founding member of SHM and chair of SHM’s Public Policy Committee (PPC). “They’re very receptive to the feedback we give them.” Dr. Greeno met with CMS in January 2017 to continue advocating on behalf of the hospitalist community.

For instance, 13 specialty measures were required under the final rule in order for hospitalists to begin reporting under the Quality category of the Merit-based Incentive Payment System (MIPS), one of two pathways to reimbursement available to all physicians under MACRA’s Quality Payment Program. However, of these, Dr. Greeno said that just seven are relevant to the hospitalist practice. The CMS now requires six reported measures in the Quality category, reduced from the initial nine.3

The measures include:

  • Heart failure: ACE inhibitor/angiotensin receptor blocker for left ventricular systolic dysfunction
  • Heart failure: Beta-blocker for LVSD
  • Stroke: DC on antithrombotic therapy
  • Advance Care Plan
  • Prevention of catheter-related bloodstream infection: CVC (central venous catheter) Insertion Protocol
  • Documentation of current medications
  • Appropriate treatment of methicillin-susceptible Staphylococcus aureus bacteremia

“Of the seven available, not all will be reportable because hospitalist practices have a lot of variation, both in their practices and in their patient mix,” Dr. Greeno said. “Most hospitalists will only be able to successfully report on four measures, but we are seeking clarification on what they call a validation test and how that will function.”

In the final rule, CMS said that it will perform that “validation test” to evaluate physicians who cannot report the minimum number of measures to ensure they are not penalized for it.

In addition to Quality, the other reporting categories under the umbrella of MIPS include Advancing Care Information, Cost, and Improvement Activities. For 2017, CMS gave physicians the option to “pick your pace.”4 As long as doctors report just one quality measure, one improvement activity, or the required advancing care information measures (most hospitalists will be exempt from this category), they will avoid a penalty.1,5 Cost will not be included for 2017, the first performance year for MIPS. This year’s reporting will be used to determine payments in 2019, though all physicians will see a 0.5 percent fee increase between now and 2019.

Additionally, just for this year, physicians can choose to report for either a full or partial year (90 days). They will not be subject to the penalty and may be eligible for a positive payment adjustment. However, those who submit nothing are subject to a negative 4% adjustment penalty.

Dr. Suparna Dutta

Dr. Suparna Dutta

This gives hospitalists the opportunity to decide “how much to dip your toe in this year,” said Suparna Dutta, MD, a hospitalist at Rush Medical College in Chicago and a PPC member. “You can go all in and submit data in all categories, with the potential for a large positive payment adjustment no matter how you perform, or you can submit just one piece of data and avoid any negative adjustment. It gives you the chance to get feedback on your performance from CMS and play around with how to best integrate MACRA measurement and reporting into your practice.”

Additionally, CMS took steps to make MACRA easier on small and rural physician practices. The final rule exempts physicians who bill $30,000 or less in Medicare Part B or 100 or fewer Medicare patients, up from the previous $10,000 threshold.1

Dr. Robert Berenson

Dr. Robert Berenson

Mr. Slavitt “was very concerned about small practices and raised the threshold from $10,000 to $30,000 in Medicare revenue a year,” said Robert Berenson, MD, FACP, institute fellow of the Health Policy Center at the Urban Institute and former member of the Medicare Payment Advisory Committee.

However, this is unlikely to apply to the majority of – if any – hospitalists, Dr. Dutta said. “By virtue of being a hospitalist, you are seeing all comers to your institution. We don’t really have the choice to see fewer Medicare patients, to be honest, and, [for] most hospitalists – whether employed by a hospital or contracting – one of the main reasons we are in place is to help the hospital and take the patients nobody else will take.”

The CMS has also allotted $20 million each year for five years to support training and education for practices of 15 providers or fewer, for rural providers, and for those working in geographic health professional shortage areas.1,6 According to CMS, as of December 2016, experienced organizations (regional health collaboratives, quality improvement organizations, and others) began receiving funds to help these practices choose appropriate quality measures, train in improvement techniques, select the right health information technology, and more.

Under MACRA, small practices (10 clinicians or fewer) may also join “virtual groups” in order to combine their MIPS reporting into a composite score. However, this is not yet well defined, and the option is not available in 2017. The CMS said that it will continue to seek feedback on the structure and implementation of virtual groups in future years.1

Hospitalists may find themselves presented with another option for performance measurement, Dr. Greeno said. The SHM has asked CMS to consider allowing hospitalists to align with their hospital facility instead of being measured separately.

“Hospitalists are in the unique position of working at only one acute care hospital, for the most part, and we actually floated this idea around years ago, to give hospitalists the option for all their quality metrics – not as a standalone physician group – to be judged on hospital performance metrics,” he said, adding, “It would be easier if we could do this for everybody, but not all hospitalist groups that work for hospitals may want to do that.”

Dr. Dutta said that this would be “a great and efficient option,” especially since hospitalists oversee the bulk of quality improvement activities in their hospitals.

“Hospital-level data would be a reflection of what we’re involved in, as the bulk of hospitalists not only provide clinical care but also participate in a multitude of hospital activities,” she said, like: “helping to develop and promote practices around high-value care, to serving on groups like safe transitions in care. It’s hospitalists who are usually the hospital leaders around quality improvement.”

This includes coming up with ways to work with pharmacists at patient admission and on medication reconciliation upon discharge, as well as providing input on clinical protocols, such as what should be done when someone falls or when potassium is high, Dr. Dutta said.

“Performance should be tied to the performance of the hospital. It moves in the right direction to force more collaboration and a joint fate,” Dr. Berenson added.

Alternative payment models

While MIPS is the pathway most physicians expect to find themselves on in 2017, the other option is the Alternative Payment Models (APMs) pathway, which moves away from the pay-for-performance, semi-fee-for-service structure of MIPS and, instead, follows the rules established by the models themselves, which include select qualified accountable care organizations and patient-centered medical homes.7 Participating physicians are eligible for a 5% incentive payment in 2019. Many health experts say that it’s clear CMS would like to ultimately steer most physicians from MIPS to APMs.

However, very few – if any – hospitalists will find themselves on an APM track. This is, in part, because models considered APMs require the use of Certified Electronic Health Record Technology (CEHRT) and must present “more than nominal risk” to providers.

“Right now, the only alternative payment model where hospitalists can directly take risk is BPCI [Bundled Payments for Care Improvement], but it does not qualify as an APM,” Dr. Greeno said.

It will also be difficult because CMS requires patient and payer thresholds under APMs that hospitalists simply are not poised to meet. In 2019, this means 25% of Medicare payments must come from an Advanced APM in 2017, or 20% of providers’ Medicare patients must be seen through an Advanced APM.8

Advanced APMs are those with which, at least in 2019 and 2020, providers face the risk of losing the lesser of 8% of their revenue or repaying CMS up to 3% of their total Medicare expenditures, if expenditures are higher than expected.8,9

“It is going to be very difficult for hospitalists to qualify for APMs because we’re not in the position to hit the thresholds,” said Dr. Dutta.

However, SHM has urged CMS to consider other BPCI models for qualification as APMs, and Dr. Greeno said that CMS is currently looking into developing bundles that may be appropriate for hospitalists. For instance, Dr. Dutta said, “What we do often in medicine is chronic disease management, and the time is coming to get into chronic disease bundles, such as [those for] management of heart failure or kidney disease.”

In December, SHM submitted a letter to PTAC (the Physician-Focused Payment Model Technical Advisory Committee) to show support for a model created by the American College of Surgeons, called ACS-Brandeis, which they hope will be considered as an Advanced Alternative Payment Model. In the proposal that ACS submitted, the authors noted, “The core model is focused on procedure episodes but can easily be expanded to include acute and chronic conditions.”

The SHM notes in its letter that, while the initial proposal is intended for surgical patients, the term-based nature of surgical care provides a platform for expanding the model more broadly to hospitalists and other specialties.

Some skepticism remains

Even if BPCI or other models are accepted as APMs, hospitalists may still be challenged to meet the required payment or patient thresholds, Dr. Greeno said. Additionally, Dr. Berenson is skeptical of bundled payments, particularly for hospitalists.

“Are hospitalists the right organization to be held accountable for the total cost of care for 90 days of spending, any more than oncologists under Oncology Care Models should be accountable for the total cost of cancer where some patients are getting palliative care and that’s not a driver of healthcare costs?” he asked. “I could see that as problematic for hospitalists.”

While he believes there are many positive aspects to MACRA, in general, Dr. Berenson considers it bad policy. While he does not want to see the Sustainable Growth Rate return, he believes many physicians would have seen reimbursement reductions sooner without MACRA (under the prior quality measurement programs) and that the law provides some perverse incentives.

For one thing, the Quality Payment Program is budget neutral, which means that, for every winner, there is also a loser. Before CMS expanded exemptions for smaller and rural practices, Dr. Berenson said that some larger groups – which are often better equipped to pursue APMs – were planning to stay in MIPS because they figured they were more likely to be the winners when compared with smaller physician practices. And MIPS comes with a 9% payment boost by 2022 (or 9% penalty), plus the possibility of an extra bonus for top performers, compared with the 5% incentive of APMs that same year.7

“There were literally groups saying they were going to go for the MIPS pathway because it’s a bigger upside,” Dr. Berenson said. “When CMS said it was exempting those [smaller, rural] groups, the [larger] groups turned around and said [that the smaller, rural groups] were the downside. ... That kind of game theory is bad public policy.”

Dr. Berenson also believes MACRA will be detrimental to some small and independent practices. Others may decide not to bill Medicare altogether, though that is not an option open to most hospitalists who care to stay in practice. It could, however, drive more hospitalists to consolidate or to become employees of their hospitals.10

“I don’t think there is any doubt this is going to drive consolidation,” Dr. Greeno said, citing numbers released by CMS that show an inverse relationship between practice size and the negative impact of MACRA.11 “I think it’s going to be pretty tough unless you’re big enough to commit the resources you need to do it right.”

At TeamHealth, where Dr. Greeno is senior advisor of medical affairs, he said that they have invested in information technology compliance, developed systems and trained providers to ensure the creation of favorable metrics for the organization’ and built the infrastructure to gather, report, and validate data. These are steps that may be out of reach for most smaller practices.

As Dr. Greeno said, no one expected this to be easy. “You’re trying to get doctors to change the way they practice. Anybody who has ever worked with doctors knows that’s not an easy things to do,” he said. “CMS is changing things to create enough incentive so the pain of not changing becomes greater than the pain of changing.”

While hospitalists may bear more of the pressure than other physician specialties, by virtue of their role in improving the quality of care in hospitals, they were born from reform efforts of the past, Dr. Greeno adds.

“If there had never been an attempt to change the way that physicians were paid, hospitalists wouldn’t exist,” he said. “We were created by physician groups who took capitated payments from HMOs, who had to find more efficient ways to treat patients in the hospital or go out of business.”

“Hospitalists are a delivery system reform and people look to us to lead. We can create a tremendous amount of value for whomever we work for,” Dr. Greeno said.

This is also why SHM continues to work with CMS to advocate for all its members. Dr. Greeno is in Washington at least once a month, participating in critical meetings and helping to guide decisions.

“The Public Policy Committee has to get into the weeds and get involved in advocating for measures that truly get at the work we do and push back on metrics and categories that do not relate to the care we are delivering for our patients,” said Dr. Dutta. “The group worked hard to push back on having to comply with Meaningful Use standards for hospitalists, and now we’re exempt from that category. CMS does listen. It sometimes just takes a while.”


1. Slavitt A. (2016 Oct 14). A letter from CMS to Medicare clinicians in the Quality Payment Program: We heard you and will continue listening. The CMS Blog (archived). Retrieved from

2. Department of Health & Human Services and Centers for Medicare & Medicaid Services. (2016 Oct 14). Quality Payment Program executive summary. Retrieved from

3. American Medical Association. (2016 Oct 19). Medicare Access and CHIP Reauthorization Act (MACRA) Quality Payment Program final rule AMA summary. Retrieved from

4. Slavitt A. (2016 Sept 8). Plans for the Quality Payment Program in 2017: Pick your pace. The CMS Blog (archived). Retrieved from

5. The Society of Hospital Medicine. Medicare physician payments are changing. Retrieved from

6. Department of Health & Human Services and Centers for Medicare & Medicaid Services. (2016 Oct 14). Quality Payment Program fact sheet. Retrieved from

7. The Society of Hospital Medicine. (2017). MACRA and the Quality Payment Program. Retrieved from

8. Department of Health & Human Services and Centers for Medicare & Medicaid Services. Quality Payment Program: Modernizing Medicare to provide better care and smarter spending for a healthier America. Retrieved from

9. Wynne B. (2016 Oct 17). MACRA Final Rule: CMS strikes a balance; will docs hang on? Retrieved from

10. Quinn R. (2015 Aug). TeamHealth-IPC Deal Latest in consolidation trend. The Hospitalist. 2015(8). Retrieved from

11. Barkholz D. (2016 Jun 30). Potential MACRA byproduct: physician consolidation. Retrieved from

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