What every dermatologist needs to know about MACRA


By Sabra Sullivan, MD, PhD, chair of the AADA’s Council on Government Affairs, Health Policy and Practice and the Congressional Policy Committee

As you know, CMS recently released the draft rule on the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), a new Medicare physician payment system that will transition clinicians from payments based on volume to payments based on value. You can find the specifics of the rule below, and the Academy is working to respond to CMS, demanding changes that protect our practices and patients.

We have already heard from a number of Academy members that dermatologists are overwhelmed and uneasy about the changes coming. You should know that our Academy is prepared to fight provisions within the proposal, advocate for a delay in implementation, and demand flexibility for reporting. We’re already in talks with leaders on Capitol Hill and at CMS about our concerns.

There are a host of opportunities before us to try and change this proposal – Congressional hearings, coalition work, AMA House of Delegates resolutions, regulatory comments, and potentially even legislative action. The appetite for full MACRA repeal is a non-starter among leaders in Congress and CMS (remember this is the law that erased the perennial sustainable growth rate (SGR) formula headache and preserved global codes). However, these advocacy opportunities allow us to protect dermatologists and ensure that the onerous requirements do not swallow our practices and disrupt patient care.

Our advocacy path runs parallel to preparation. Should the final rule fail to address our unique needs and concerns, our Academy is working diligently to set us up for success. This means that we are preparing a host of tools and resources so that your practice can be prepared, regardless of whether you’re on the Merit-based Incentive Program (MIPS) path, the Alternative Payment Model (APM) path, or choosing not to participate in either. In fact, we’ve been working to prepare for the shift to value-based payments:

  • We launched DataDerm™, the tool that will help dermatologists report quality measures in the future – ensuring that dermatology-specific measures will be considered in any new value-based payment systems.
  • We’ve been aggressively developing dermatology-specific alternative payment models to help ensure you have the option of eligibility under this alternative.

The wholesale change before us is unnerving. But our Academy is going to fight for you, your practice and your patients. Our two-punch approach of advocacy and preparation will ensure the viability of your practice for years to come. 

MACRA rule summary

The basics

CMS’ proposed rule combines existing quality and reimbursement programs – Physician Quality Reporting System (PQRS), Value Based Modifier (VBM), Alternative Payment Models (APMs), and Meaningful Use (MU) – into ONE program called the Medicare Quality Payment Program.

Under the new Medicare Quality Payment Program you have TWO options to obtain reimbursement:

1. Participate in the Merit-Based Incentive Payment System (MIPS)
This is basically a fee-for-service program with bonuses and penalties for how your practice performs in four categories. It encompasses many aspects that you have already been doing – such as MU and PQRS. If you participate in an alternative payment model that does not meet the criteria to be an Advanced APM, you may be able to improve your MIPS score.

2. Participate in an “Advanced” Alternative Payment Model (APM)
Most dermatologists will NOT participate in the APM pathway, initially, because CMS has made it extremely difficult to be considered an Advanced APM. We hope that will change over time, in fact, we will be advocating for it. To help dermatologists prepare for APM adoption, we are looking at APMs for several conditions – cellulitis, acne, actinic keratosis, and psoriasis.

MIPS and your score

CMS proposes to begin tracking your score in 2017 – for payment beginning in 2019. Different score categories are provided different weights. Each eligible professional in the MIPS program will receive a composite performance score of 0‐100. The composite is based on four categories: Quality, Resource Use, Advancing Care Information, and Clinical Improvement (CPIA).

50 percent of total score in year 1. Replaces PQRS and the quality component of the VBM.
Resource Use
10 percent of total score in year 1. Replaces the cost component of the VBM.
Clinical Practice
Improvement Activities
15 percent of total score in year 1.
Advancing Care

25 percent of total score in year 1. Replaces Meaningful Use.


Bonuses and penalties under MIPS

Remember, your first payment will be made in 2019 for data collected in 2017, unless CMS changes this in November when they publish the final rule. Payments allow for adjustments to the Medicare Physician Fee Schedule plus bonuses for top performers. Bonuses and penalties are based on whether the physician’s composite score is above an annual threshold. CMS can increase the positive adjustments by 3 times to maintain budget neutrality.

Practice example: Based on an average Medicare Part B specialty payment of $228,000

  Minimum reimbursement
Maximum reimbursement 
2019 (+/-4%) $218,880 $237,120

2022 (+/-9%)



MACRA concerns for dermatology

Here are some of the Academy’s initial concerns, and some points that we will be advocating to change:

  • CMS estimates that 87% of solo practices and 70% of small practices will face a penalty in the first year. The Academy believes that the threshold for exemption should be revisited in order to avoid the penalty and allow small/solo clinicians more time to migrate onto MIPS.
  • The Advancing Care Information component is worth 25% of one’s MIPS score. With 73% of dermatologists using EHRs, we are concerned that the threshold may be too high for the small and solo practices that have to make a major initial investment in the technology.
  • Providers must attest to CMS that they are not only sharing information with other providers, but also not willfully trying to block data from others. However, there is no mention of EHR vendors blocking data. The Academy will urge CMS to hold vendors accountable as well.
  • Physicians must attest that they cooperated with ONC surveillance requirements. The Academy is concerned that the surveillance requirement could deter physicians from participating in EHR technology.
  • The amount of risk required to qualify as an Advanced APM is complex and highly unattainable for most alternative payment models. Further, the scheduled participation thresholds in Advanced APMs are a steep bar that will prevent the majority of physicians from qualifying for the bonus payments associated with Advanced APM participation.
  • CMS proposes a two-year look back period for both MIPS and APMs. The Academy is concerned that this unduly delays feedback for physicians.
  • Appeals will be very limited. We advocate for expanded opportunities for appeals.
  • Under MIPS, dermatologists are required to report on 6 quality measures – while that’s down from 9 under PQRS, physicians now have to report on 90% of all Medicare part B patients – a potentially impossible threshold as PQRS required only 50%.

Potential MACRA upsides for dermatology

  • CMS included a new measure on dermatopathology.
  • In the future, the Academy’s DataDerm™ clinical data registry platform could serve as the qualified registry for reporting MIPS.
  • Telemedicine encounters count as patient-facing encounters for purposes of quality reporting.
  • Small practices of 15 or fewer providers will get partial or full credit for submitting any two of the 90 CPIAs.
  • Providers (physicians, PAs, NPs, et al) can team up to form new “Virtual Groups” which will then be registered with CMS to be able to report data based on all four MIPS performance criteria.
  • It could become easier to get support for a Physician-Focused APM through a new body, the Physician-Focused Payment Technical Advisory Committee (PTAC) which Congress expects to make APM recommendations to CMS.

Start preparing nowMIPs_payment_schedule.png

It’s essential that you begin to prepare for the eventual implementation of MACRA even before the final rule is announced. Dermatologists who want to avoid penalties under MIPS should:

  • Attest to meaningful use for 2016.
  • Participate in the PQRS in 2016. Dermatologists and their non-physician clinicians can report PQRS quality measures with AAD's DataDerm™.
  • Review Quality and Resource Use Reports (QRUR).
  • Assure that your certified electronic health records technology can collect quality data appropriate to you, so that you can collect data and report on those measures. I recommend that you enroll in the Academy’s clinical data registry, DataDerm™.

What's next

Over the coming months, the Academy will continue to provide more detailed information and resources to help practices prepare for the upcoming policy and delivery changes.

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