1. The Impact of MACRA on America’s Hospitals Alliance for Health Reform MACRA Briefing May 20, 2016 © American Hospital Association

2. What MACRA Does Replaces flawed SGR formula with specified payment updates Creates new “quality payment system” for professionals paid under the physician fee schedule (PFS) Rewards participation in alternative payment models (APM) and ties a greater percentage of payment to value -21%

3. Why MACRA Matters to Hospitals Physicians and hospitals must partner in moving to value Hospitals employ and contract with many physicians ~250,000 employed ~289,000 contract Alignment of incentives (both opportunity and challenge)

4. Annual Payment Updates 4/1/157/1/1520162020 2017 20182019 0.0% 0.5% 0.5% annually MIPSAPM Sunsets penalties for MU, PQRS, VBM

5. Payment Under APMs 0.0% annual update APM: Bonus of 5% of PFS payments annually 20202026 MIPS 0.25% annually, PLUS penalties/bonus up to ± 9% APM 0.75% annually; no bonus payments MIPS OR APM 202120222024202520232019 ±4%±5%±7%±9%

6. Operational and Strategic Impact Cost of compliance for employed physicians Hospital-physician relationships –More employed physicians? –Physician retirements? Pressure to participate in risk-bearing arrangements Strategy determination: MIPS or APMs?

7. Hospital Reaction to MIPS Adopt a system that is fair, focused on important issues, and sustainable Streamline and focus measures; Risk adjustment – including sociodemographic adjustment where appropriate Hospital-based physician measure reporting option Flexibility and alignment on Meaningful Use

8. Hospital Reaction to APMs CMS should be as inclusive as possible in defining APMs Recognize investment risk Capture risk-sharing arrangements in MA Consider and mitigate impact of overly restrictive fraud and abuse laws/regulations

9. MACRA Rule Outlook (so far) Fewer required MIPS measures Steps to align public/private measures Moving away from all-or-none scoring in Advancing Care Information Right Direction No MIPS hospital measure reporting option yet (but CMS considering it) Need more alignment and focus of measures across continuum Is Advancing Care Information category flexible enough? Narrow definition of financial risk for APMs Misalignment of Hospital Meaningful Use with Advancing Care Information No SDS adjustment yet ConcernedWork in Progress

10. AHA MACRA Resources Webinars Presentations FAQs Timeline Comment Letters Advisories http://www.aha.org/MACRA

11. The Impact of MACRA on America’s Hospitals Alliance for Health Reform MACRA Briefing May 20, 2016 © American Hospital Association