Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. MACRA: Next steps toward value-based payment in Medicare

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. THE BASICS The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA):

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. What MACRA does Permanently eliminates the SGR (and its annual physician payment cuts) Consolidates Medicare quality reporting programs Establishes a path for alternative payment models (APMs)

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Practices will have choices under MACRA Statutory updates Consolidated reporting Reduced penalty risk Fee-for-Service under a “Merit- based Incentive Payment System” (MIPS) Higher updates Exempt from MIPS Preferred treatment for medical homes Specialty models encouraged Alternative Payment Models

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Medicare payments under MACRA Baseline PFS Updates MIPS* APMs %0% 0.25% ±4% ±5% ±7%±9% 5% lump sum bonus +0.5% PFS 0% * Additional bonus available for exceptional performance

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. MACRA milestones 2016 Likely last performance year for PQRS, meaningful use, and VBPM Proposed rule outlining MIPS and APM criteria expected in the spring 2017 Likely first performance measurement year for MIPS APM criteria set, proposals accepted for review on an ongoing basis 2018 Likely first performance measurement year for APMs and second for MIPS Separate PQRS, meaningful use, and VBPM programs / penalties sunset on Dec First MIPS payment adjustments applied, maximum +4% (phases up to + 9% in 2022) First APM performance assessed, 5% bonus payments made to qualifying participants

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. WHAT WE KNOW MIPS and APMs:

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. MIPS In 2019, Meaningful Use, PQRS, and VBPM will be streamlined into one program: the Merit-Based Incentive Payment System (MIPS) MIPS will calculate a single composite score based on performance in four categories: −Quality −Resource Use −Use of EHR technology −Clinical Practice Improvement Activities

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Exemptions from MIPS The following providers will be exempt: −First-year Medicare providers −Providers with a low volume of Medicare patients −Qualifying participants in eligible APMs

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Prior Law2019 adjustments PQRS-2% MU-5% VBPM-4% or more* Total penalty risk-11% or more* Bonus potential (VBPM only) Unknown (budget neutral)* MIPS factors2019 scoring Quality measurement50% of score MU25% of score Resource use10% of score Clinical improvement activities 15% of score Total penalty riskMax of -4% Bonus potentialMax of 4%, plus potential 10% for high performers *VBPM was in effect for 3 years before MACRA passed, and penalty risk was increased in each of these years; there were no ceilings or floors on penalties and bonuses, only a budget neutrality requirement (first year) penalty risks compared

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. APMs APM is a generic term describing a payment model in which providers take responsibility for cost and quality performance and receive payments to support the services and activities designed to achieve high value According to MACRA, APMs include: −Medicare Shared Savings Program ACOs −Patient-centered medical homes −CMS Innovation Center Models −Other federal demonstrations

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Incentives to participate in APMs APMs offer greater potential inherent risks and rewards than MIPS Under MACRA, qualifying APM participants in “eligible” APMs: −Are exempt from MIPS −Receive annual 5% lump sum bonus payments from −Receive a higher fee schedule update for 2026 and onward

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. What makes an APM “eligible”? Under MACRA, “eligible” APMs must: Base payment on quality measures that are comparable to MIPS Require use of certified EHRs Bear more than “nominal financial risk” or be a medical home model

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. LOOKING AHEAD MACRA:

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. MACRA details TBD MACRA is just a framework Many details will be determined through rulemaking, including: –Definition of “nominal financial risk” for qualification as an APM –Eligible APM criteria –MIPS scoring methodology –Threshold for low-volume exemption from MIPS –Definition for “exceptional” performance in MIPS, which qualifies for additional bonuses –Frequency of MIPS feedback (MACRA suggests quarterly)

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. MGMA’s immediate goals Shape MACRA regulations so all medical group practices can succeed under the practice model of their choice – Approve “qualified APMs” for all practice specialties and sizes – Current (rather than additional) burdens must be reduced for MIPS – Incorporate flexibility in both MIPS and APMs – Provide consistent and clear feedback to support ongoing practice improvement Enable practice transformation – Develop decision-making and planning tools, educational programs for medical group practices

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Positioning practices for the future Fee for service payment methods are blurring and morphing into new payment models Increasing focus on accountability for total cost of care, while maintaining quality Growing emphasis on care coordination, health IT and patient satisfaction Practices with a sophisticated understanding of financial and clinical analytics will be best positioned for evolving payment models Stay ahead of the curve and thoughtfully consider if certain voluntary programs are right for your practice Be aware of the changing landscape by engaging with MGMA

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. What physician practices can do now  Expect MACRA implementation to proceed −Elections estimated to have limited impact o MACRA passed House ; passed Senate 92-8  Assess your performance under current programs −How did your group perform in PQRS and MU? Have you downloaded your 2014 Quality and Resource Use Report?  Engage in ongoing learning about MACRA −Visit mgma.com/MACRA for more information and resources −Subscribe to the Washington Connection for updates about MACRA implementationWashington Connection  Consider participating in a public or private value-based payment initiative

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Appendix

Copyright Medical Group Management Association ® (MGMA ® ). All rights reserved. Acronyms reference guide ACO – accountable care organization APM – alternative payment model CMS – Centers for Medicare & Medicaid Services CPCI – Comprehensive Primary Care Initiative EHR – electronic health record EP – eligible professional HHS – U.S. Department of Health & Human Services MACRA – The Medicare Access and CHIP Reauthorization Act of 2015 MIPS – Merit-Based Incentive Payment System PFS – physician fee schedule PQRS – Physician Quality Reporting System QRUR – quality and resource use report VBPM – Value-Based Payment Modifier