1. Michael Schweitz, MD President Coalition of State Rheumatology Organizations THE QUALITY AND VALUE MOVEMENT: ACOS AND VALUE BASED PAYMENT SYSTEMS

2.  Accountable Care Organizations (ACOs)  Value-Based Payment Modifier (VBM)/Physician Feedback Program  Physician Quality Reporting System (PQRS)  Medicare and Medicaid EHR Incentive Program  Physician Compare  Emerging Payment and Care Delivery Models AGENDA

3. ACCOUNTABLE CARE ORGANIZATIONS

4.  Section 3022 of the Affordable Care Act requires HHS to establish the Medicare Shared Savings Program (MSSP) (i.e., Accountable Care Organizations (ACOs))  ACOs  ACOs are groups of physicians, hospitals, and other health care providers who come together voluntarily to give coordinated high quality care to the Medicare patients they serve  Coordinated care helps ensure that patients, especially the chronically ill, get the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors  When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program  More than 280 Medicare ACOs in operation to date  Approx. 220 “Traditional” Medicare ACOs; More than 60 other ACO models  Innovation Center ACOs: Pioneer and Advanced Payment Model ACCOUNTABLE CARE ORGANIZATIONS

5.  October 2011 – CMS issues final rules on Medicare ACOs  Highlights  Eligible Organizations  Physicians/professionals in group practice arrangements  Networks of individual practices of physicians/professionals  Joint ventures/partnerships of hospitals, physicians, professionals  Hospitals employing physicians/professional  Other providers/suppliers may participate but would not be used to assign patients  Beneficiary Assignment  Two-step method based on plurality of “primary care services” (i.e., E/M or “office visits”)  Assignment based on preliminary prospective assignment w/retrospective reconciliation ACO HIGHLIGHTS

6.  Highlights  Quality Measurement and Performance  33 measures (used in existing programs – PQRS)  100% reporting required to be eligible for shared savings  Quality domains assessed by CMS  Patient/caregiver experience (7 measures) (CG-CAHPS Survey)  Care coordination/patient safety (6 measures) (CMS, AHRQ, NQF measures)  Preventive health (8 measures) (NQF, NCQA, AMA-PCPI, CMS measures)  At-risk population/frail elderly health (NQF, NCQA, CMS measures)  Data Sharing  Aggregate data reports provided at the start of the agreement period, quarterly aggregate data reports thereafter and in conjunction with year end performance reports  Aggregate data reports will contain a list of the beneficiaries used to generate the report.  Beneficiary identifiable claims data provided for patients seen by ACO primary care providers who have been notified and have not declined to share data ACO HIGHLIGHTS

7. One-sided Model  Share in savings (50%) during each of the three years in the agreement period  This option is available during an ACO’s initial 3- year agreement period Two-sided Model  Share in risk and savings (60%) during each of the three years in the agreement period ACO PAYMENT: ONE-SIDED VS. TWO-SIDED Other ACO Payment Notes  ACOs share on “first dollar” once minimum savings threshold is achieved  Shared savings distributed by CMS to the ACO (not directly to ACO participants) during an ACO’s initial 3-year agreement period

8.  Innovation Center ACOs (ACA Section 3021) Pioneer ACO Model (32 in operation)  Designed to support organizations with experience operating as ACOs or in similar arrangements in providing more coordinated care to beneficiaries at a lower cost to Medicare  Will test the impact of different payment arrangements in helping these organizations achieve the goals of providing better care to patients and reducing Medicare costs Advance Payment ACO Model (35 in operation)  Will provide additional support to physician-owned and rural providers participating in the Shared Savings Program who would benefit from additional start-up resources to build the necessary infrastructure, such as hiring new staff or improving information technology systems INNOVATION CENTER ACOS

9.  Relatively unclear how specialists fit into the ACO framework, but we know the following:  Specialists will likely be exclusive to one ACO under the “two- step” assignment process  Step 1: Beneficiaries first will be assigned to an ACO on the basis of utilization of primary care services provided by PCPs  Step 2: Beneficiaries not seeing a PCP may be assigned to an ACO on the basis of primary care services provided by other physicians (such as specialists)  No NPI/TIN combination that has been used for purposes of patient assignment to an ACO can be associated with more than one ACO  CMS included an “Access to Specialists” module with the required CG-CAHPS Survey to monitor beneficiary access to specialists  Most specialists taking a “watch and see” approach ACOS AND SPECIALISTS

10.  ACO final regulation widely interpreted as allowing non-primary care physicians to practice in multiple ACOs  CMS clarified that it would apply exclusivity more broadly in recent FAQ document  Pertinent FAQs QUESTION: I’m a medical specialist in solo practice and I bill for office evaluation and management services that are included in the definition of primary care services. Is it true that I must keep my TIN exclusive to only one ACO? ANSWER: Yes, an ACO participant TIN that bills for primary care services must be exclusive to a single MSSP ACO. Exclusivity under the MSSP is governed by the types of services that are furnished by the ACO providers/suppliers that bill under the ACO participant TIN, not by whether the TIN bills for services furnished by primary care physicians, specialists, or a mix of providers. ACO EXCLUSIVITY

11.  Pertinent FAQs QUESTION: I’m a specialist and bill for office evaluation and management services (which CMS defines as being “primary care”) under a single TIN. Can my TIN be a participant in more than one ACO if I make sure all my patients see a primary care physician who’s not participating in my ACO? By doing this I’d make sure that no patients are assigned to my ACO based on my services. ANSWER: No. An ACO participant TIN that bills for primary care services must be exclusive to a single Medicare Shared Savings Program ACO. TIN exclusivity under the Medicare Shared Savings Program is not affected by whether or not non-ACO physicians also treat beneficiaries that receive primary care services billed by the ACO participant TIN. Read more of CMS’ FAQs at: http://www.cms.gov/Medicare/Medicare-Fee-for- Service-Payment/sharedsavingsprogram/Downloads/MSSP-FAQs.pdfhttp://www.cms.gov/Medicare/Medicare-Fee-for- Service-Payment/sharedsavingsprogram/Downloads/MSSP-FAQs.pdf ACO EXCLUSIVITY

12.  Analytics: Medicare & Medicaid Research Review (MMRR) 2012 Volume 2, Number 4 “Statistical Uncertainty in the Medicare Shared Savings Program”  Report indicates there may be greater statistical uncertainty in the MSSP than previously recognized  “The probability of an incorrect outcome is heavily dependent on ACO enrollment size…[t]he probability of inappropriate payment denial declines as real ACO savings increase...CMS and ACOs will have to consider this uncertainty in their financial, administrative, and care management planning.”  Authors suggest analytic strategies that can be used to refine ACO payment formulas in the longer term to ensure that the MSSP (and other ACO initiatives that will be influenced by it) work as efficiently as possible. Read the report on CMS’ website: http://www.cms.gov/mmrr/Articles/A2012/mmrr-2012-002-04-a04.html http://www.cms.gov/mmrr/Articles/A2012/mmrr-2012-002-04-a04.html ACO CONCERNS

13.  Exclusivity: Regardless of specialty, ACO participants that bill for PC services must be exclusive to a single ACO since they are the basis for assigning beneficiaries, computation of the benchmark, and quality assessment  Access to care: Patients not limited to ACO providers, but intra-ACO referrals and gatekeeper models may limit access to specialists  Distribution of shared savings: Specialty physicians continue to have doubts that shared savings will be distributed fairly among all ACO participants ACO CONCERNS

14.  Watch the Pioneer ACOs  Letter to CMS from 32 Pioneer ACOs expressing concerns (February 2013)  Insufficient data for quality measures  Benchmarks higher than commercial contracts  Use of Medicare Advantage data in setting benchmarks  CMS rejected Pioneer’s concerns  Expect additional CMS regulations to modify ACOs  Analytics, Exclusivity, Distribution of Shared Savings?  Physicians should…  Closely review ACO agreements  Educate their Medicare patients about ACOs THE FUTURE OF ACOS

15. VALUE-BASED PAYMENT MODIFIER AND PHYSICIAN FEEDBACK PROGRAM

16.  Affordable Care Act (ACA) requires CMS to apply a value-based modifier (VBM) to physician services billed under the Medicare Fee Schedule  Modifier must be based on physician quality AND cost  Modifier must be applied beginning Jan. 1, 2015 to select physicians and to all physicians no later than Jan. 1, 2017  Modifier must be applied in a budget neutral manner (i.e., cuts to low performers will finance bonuses to high performers)  CMS must provide confidential Physician Feedback Reports reflecting physician resource use and quality VALUE-BASED PAYMENT MODIFIER: STATUTORY AUTHORITY

17.  Alignment with other federal quality programs (PQRS, ACOs, etc.)  Encourage shared responsibility and systems-based care  Offer choice of quality measures and reporting mechanisms  Provide actionable information VALUE-BASED PAYMENT MODIFIER: IMPLEMENTATION PRINCIPLES

18.  Only LARGE GROUP PRACTICES (>100 eligible professionals) will be held accountable under VBM in 2015  EP = physicians (MD, DO, DOPM, DC, etc.), PAs, NPs, dieticians, social workers, PT/OTs  VBM applies to items/services billed by physicians under a single tax-identification number (TIN)  Performance period for 2015 adjustment is CY2013  0% adjustment for satisfying PQRS requirements  1.0% penalty for inaction   /  adjustment for voluntary quality-tiering calculation VALUE-BASED PAYMENT MODIFIER: INITIAL IMPLEMENTATION

19.  Group Practice Reporting Options (GPRO) to avoid penalty:  GPRO Web Interface: pre-selected set of 22 measures focusing on preventive and chronic care that align with Shared Savings Program; must report at least one measure  GPRO Using CMS-Qualified Registry: groups select relevant quality measures to report through a PQRS-qualified registry; must report at least one measure  Administrative Claims Option:* 17 pre-selected measures focusing on preventive and chronic care; calculated automatically by CMS based on claims *Only available for 2013 VALUE-BASED PAYMENT MODIFIER: REPORTING OPTIONS

20.  Only groups that voluntary opt for the “quality-tiering approach” will be held accountable for quality and cost performance based on: Quality measures  Measures reported through selected PQRS reporting mechanism  Three outcome measures: All Cause Readmission, Composite of Acute Prevention Quality Indicators (bacterial pneumonia, UTI, dehydration), Composite of Chronic Prevention Quality Indicators (COPD, HF, diabetes) Cost measures  Total per capita costs measures (Parts A & B)  Total per capita costs for beneficiaries with four chronic conditions: COPD, HF, CAD, Diabetes *Cost measures are payment standardized and risk adjusted. Patients are attributed to group practices that billed largest share of E/M services (“plurality of care” method) VALUE-BASED PAYMENT MODIFIER: QUALITY TIERING APPROACH

21. VALUE-BASED PAYMENT MODIFIER Group practices w/ > 100 EPs PQRS Reporters Groups self-nominating for PQRS GPRO web-interface, registries or administrative claims reporting Non-PQRS Reporters Groups NOT self-nominating to participate in PQRS GPRO and not reporting at least one measure , , or No Adjustment Based on Quality/Cost Measure Composite 0.0% No Adjustment Elect Quality- Tiering No Election -1.0%  Adjustment

22.  CMS has provided confidential feedback reports (“Quality and Resource Use Reports” or QRURs) to select physicians since 2010. Reports quantify and compare quality and costs of physicians relative to their peers.  Fall 2013: CMS will send reports to all group practices with >25 EPs to preview methodologies used to determine the VBM and help larger practices decide whether to choose quality-tiering approach  Fall 2014: CMS will send reports to all group practices with >25 EPs based on 2013 data. Reports will specify modifier amount and will be the basis for its determination in 2015 (for practices with >100 EPs only)  CMS continues to work with specialties to improve the content and format of these reports QUALITY AND RESOURCE USE REPORTS

23. 2012 Confidential feedback reports distributed to successful PQRS participants and demonstrate the type of information that will be used to calculate modifier 2013 Initial performance period (i.e., services provided during CY 2013 will be used to calculate 2015 payment) 2015 Beginning in 2015, modifier will apply only to large group practices (100+ eligible professionals) 2016 As modifier is phased in over 2-year period, CMS will continue to apply modifier to specific physicians 2017 Modifier will apply to most or all physicians who submit claims under Medicare fee schedule VALUE-BASED PAYMENT MODIFIER: TIMELINE

24.  Continuing concerns  Rushed timeline  Inaccurate risk adjustment/attribution methodologies for cost measures  Confusing feedback reports  CMS continues to seek public feedback on implementation strategies and methodologies  Important for physicians to familiarize themselves with the PQRS and to pay attention to CMS feedback reports, regardless of whether they qualify for VBM during initial roll out VALUE-BASED PAYMENT MODIFIER: ONGOING CONCERNS

25.  May 16, 2012 – CSRO met with CMS senior staff to discuss concerns and offer suggestions specific to the VBM and the QRURs.  Limited provider education on the VBM/Physician Feedback Program  How to measure quality for providers not participating in the PQRS  Conditions being measured frequently fall outside the specialty  Validity of the QRUR data  Cost measurement may prompt negative behavior  Need to highlight data relevant to specialty  Reduce the size and simplify the QRURs CSRO MEETS WITH CMS STAFF

26.  CSRO, as members of the Alliance of Specialty Medicine, is engaged in an ongoing, bi- directional dialogue with senior CMS staff to improve elements of the VBM, QRURs  Face-to-face meetings (Dec. 2012/March 2013) at CMS Headquarters  User Access Training & Alliance/CMS Webinar on new QRURs (Sept 2013) ALLIANCE OF SPECIALTY MEDICINE: SUPER USER NETWORK

27. PHYSICIAN QUALITY REPORTING SYSTEM

28.  Bonus payment for reporting quality data via claims, registry, EHR  up to 1.0% in 2013  Penalties in 2015 based on 2013 reporting  -1.5% in 2015, -2.0% in 2016  Improvements to the program:  More measures, more reporting options  Less stringent reporting criteria to avoid penalty  American Taxpayer Relief Act of 2012 (P.L.112-240) permits participation in clinical data registries in lieu of traditional PQRS reporting for 2014 and beyond  CMS interested in recognizing registry reporting and other innovative, non-federal QI activities as a substitute for PQRS criteria PHYSICIAN QUALITY REPORTING SYSTEM

29. BONUS/PENALTY STRUCTURE YearPQRS 20092.0% 20102.0% 20111.0%-1.5% 20120.5%-1.0% 20130.5%-1.0% 20140.5%-1.0% 2015No bonus (-1.5% penalty) 2016No bonus (-2.0% penalty) **Range in incentive payment depends on whether EP qualifies for MOC bonus

30. EHR INCENTIVE PROGRAM

31.  Incentives for “meaningful use” of certified EHR system  Medicare: Up to $44,000 over 4 years  Medicaid: Up to $63,750 NOTE: EHR incentive payments subject to 2% sequestration reduction  Phased approach  Final Stage 2 (2014): More advanced clinical processes; more data exchange; increased requirements for e-Rx and incorporating lab-results; e-transmission of patient care summaries; and enhanced patient engagement  Proposed Stage 3 (2016): Emphasis on core vs. menu options; 2x measures; higher reporting thresholds (100% compliance in some cases); testing of innovative, locally generated measures  Participation  226K physicians registered to participate in Medicare EHR Incentive Program; still, fewer than 1 in 10 physicians used electronic records last year that met federal standards  Challenges  Irrelevant measures; lack of interoperability/info exchange infrastructure; cost; unintended coding/safety issues; rushed implementation MEDICARE AND MEDICAID EHR INCENTIVE PROGRAM

32. BONUS/PENALTY STRUCTURE YearEHR 2009None 2010None 2011$18,000 2012$12,000-$18,000 2013$8,000-$15,000 2014$4,000-$12,000 2015 $2,000-$8,000 (-1.0% penalty) 2016 $2,000-$4,000 (-2.0% penalty) *Depending on total # of meaningful users after 2018, the maximum cumulative EHR penalty can reach as high as 5%; EHR incentive payments subject to 2% sequestration reduction

33. PHYSICIAN COMPARE

34.  CMS Physician Compare Website  http://www.medicare.gov/find-a-doctor/provider-search.aspx http://www.medicare.gov/find-a-doctor/provider-search.aspx  2014:  2013 PQRS quality measures reported by group practices (>25) and ACOs  2013 patient experience data for group practices (>100)/ACOs  Recognition of physicians who earned a PQRS MOC Incentive  2015: Individual physician 2014 PQRS performance data  Ongoing concerns with accuracy of data  Physicians should review the accuracy of their data and report problems to CMS PHYSICIAN COMPARE

35. EMERGING MODELS

36.  CMS’ Innovation Center develops new payment and service delivery models in accordance with statutory requirements  Focus Areas  Accountable Care  Bundled Payment for Care Improvement  Primary Care Transformation  Innovations for Medicaid and Dual-Eligibles  Innovation Center recently announced it would accept proposals for “specialty” focused demos  CSRO, as part of the Alliance of Specialty Medicine, engaged in a dialogue with Innovation Center staff on ways to encourage/facilitate the development of specialty-focused payment and delivery models CMS INNOVATION CENTER

37. QUESTIONS?