The Coming Alphabet Soup

What will it mean for optometrists?

By Thomas R. Cheezum, OD, CPC

Over the past several years, the US Centers for Medicare and Medicaid Services (CMS) has been gradually transitioning to a payment system based upon paying for quality of care, rather than volume of care. Programs such as meaningful use (MU) requirements, electronic prescribing (eRX), and the Physician Quality Reporting System (PQRS) are designed either to reward or penalize providers based on their behavior and patterns of care. Providers who have not participated in any of these programs by 2018 will see Medicare fee reductions of approximately 13%.

In 2017, the next phase of this project will begin. This phase will have more significant effects on provider reimbursement and will result in multi-tiered fee schedules. This new phase was put into place when the Medicare Access & CHIP Reauthorization Act (MACRA) of 2015 was enacted.1

MACRA does three things:

• It repeals the sustainable growth rate, or SGR, the formula used for many years to calculate Medicare fee changes; the SGR resulted in annual fee reductions of up to 20%, which Congress generally reversed each year.

• It consolidates several quality reporting programs, including MU and PQRS, into the Merit-Based Incentive Payment System (MIPS).

• It provides incentive payments to providers who participate in alternative payment models (APM) such as accountable care organizations and Medicare Advantage plans.


Beginning in 2017, providers will be divided into two categories: MIPS providers and advanced APM providers.

The majority of providers will be included in the MIPS group in 2017. However, CMS has a goal to transition 50% of Medicare patients into APM programs by 2018, and this process is currently ahead of schedule. This will mean that the number of patients seen by MIPS providers will decrease over time. The only way providers may be excluded from the MIPS program in 2017 is if it is the first year they are filing claims for Medicare Part B or if their Medicare billings are less than $10,000 and they see fewer than 100 Medicare patients in 2017.

MIPS will require providers to report in four different categories, which are outlined below. A provider’s score on the MIPS scoring system will determine whether that provider’s fees are increased or decreased in 2019 and subsequent years. Potential fee increases or reductions will be up to 4% in 2019, 5% in 2020, 7% in 2021, and 9% in 2022.

The fee changes are intended to be budget-neutral. That is, if a certain number of providers do not meet the necessary reporting criteria, thereby subjecting them to a 4% fee reduction, then those who score in the highest reporting category will receive a 4% fee increase.

Depending on the number of providers who do not meet the reporting criteria, the fee increases for those who do could be multiplied by up to three times. CMS has also allocated an additional $500 million per year, beginning in 2019, to pay up to a 10% bonus to providers with the highest reporting scores. Therefore, in 2022, a provider with a high score could potentially receive a 27% fee increase plus 10% bonus, while a low scoring provider receives a 9% fee reduction. This amounts to a 46% fee differential! Based upon past reporting history, CMS estimates that 80% of optometrists will incur fee cuts in 2019.


The four MIPS reporting categories will be as follows:

• Quality (50% of overall score): This will be similar to the PQRS program now in place, except there will be only six reporting categories instead of the current nine.

• Resource use (10% of overall score): There are no reporting requirements for this. CMS will determine this score based upon information it extracts from claims submitted.

• Clinical practice improvement activities (15% of overall score): Providers will choose from a list of 90 practice improvement activities and report on their progress in completing them.

• Advancing care information (25% of overall score): This is the new version of MU of electronic health records technology and eRX; it will require the provider to choose six reporting measures from several categories.

A formula will combine these measures to yield a composite performance score that will be used to determine whether a provider should receive a fee increase or decrease.


What does all of this mean for optometrists? How will MACRA and MIPS affect us?

First, it is important to understand that major medical insurers other than CMS will be likely to adopt these same programs and develop their own multi-tiered fee schedules. Any optometrists believing that they can afford to have their Medicare fees reduced because their fees from other major medical payers will remain stable are fooling themselves.

Second, as more Medicare patients are covered under APMs, it will be crucial that optometrists become members of these provider panels. APMs may be excluded from “any willing provider” provisions. As a result, if optometrists do not get on these panels, they may see their patient pools dwindle significantly as more patients transition to APMs.

The reality is that, if you do not participate in these programs, your practice’s financial well-being may be relegated to depending almost completely on patients in vision care plans, with their constantly decreasing reimbursement schemes. n

1. Centers for Medicare & Medicaid Services. Quality Payment Program: Delivery System Reform, Medicare Payment Reform, & MACRA. Accessed August 8, 2016.

Thomas R. Cheezum, OD, CPC
• Multispecialty medical practice, Norfolk, Virginia
• Consultant on record keeping, billing, coding, and compliance and AAPC Certified Professional Coder; (757) 572-9547