1. An Overview of Value-Based Payment Models & MACRA
Trudi Matthews,
Senior Policy Advisor, External Affairs, UKHC &
Managing Director, Kentucky Regional Extension Center
November 2016

2. Kentucky REC Description
Kentucky Regional Extension Center Overview
UK’s Kentucky REC is a trusted advisor and partner to healthcare organizations, supplying expert guidance to maximize quality, outcomes and financial performance
REC Service Lines
Kentucky REC Description
Physician Services
Meaningful Use
Privacy & Security Consulting
Patient Centered Medical Home (PCMH) Consulting
Value Based Payment & MACRA Preparation Support
Kentucky Medical Professions Placement Services (KMPPS)
Hospital Services
HIPAA Security Assessment
Electronic Quality Reporting Support
To date, the Kentucky REC’s activities include:
Helping bring over $100 million incentive dollars to providers throughout the Commonwealth
Assisting more than 3,400 individual providers across Kentucky, including primary care providers and specialists
Helping more than 95% of the Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) within Kentucky
Working with more than 1/3 of all Kentucky hospitals
Supporting dozens of practices and multiple health systems with meaningful use, practice transformation and preparation for value based payment

3. Kentucky REC & the Great Lakes PTN
CMS established the Transforming Clinical Practices Initiative (TCPI) to help clinicians achieve large-scale health transformations through collaborative and peer-based learning networks
Great Lakes PTN is one of 29 Practice Transformation Networks (PTNs)
GLPTN works with 10 Support and Alignment Networks (SANs)
GLPTN State Level Leadership:
Indiana University (primary grant recipient)
University of Kentucky (Kentucky)
Purdue Healthcare Advisors (Indiana)
Northwestern University (Illinois)
Altarum Institute (Michigan)
** For GLPTN network only

4. Moving to Value-Based Payment
Understanding the What & Why

5. What is Value Based Payment?
Quality
Cost
VALUE

6. Volume to Value Based Shift
Recent legislative, regulatory and marketplace developments suggest that the transition from volume to value-based payment is accelerating from a “testing” phase to a “scaling” phase
Pioneer ACO Program Launched
April 2013
Bundled Payments for Care Improvement (BPCI)
Medicare Access and CHIP Reauthorization Act (MACRA) Enacted
April 2015
July 2016
Cardiac & CJR Episode Payment NPRM Released
January 2012
October 2012
Hospital Value Based Purchasing Program
CMS Announces Value-Based Payment Goals; Value Modifier Program Begins
January 2015
April 2016
MACRA NPRM,
Medicaid Managed Care Final Rule Released
March 2010
October 2016
Affordable Care Act Enacted
MACRA Final Rule Released
Testing Phase
Scaling Phase

7. 2015: CMS Accelerates Shift to Value-Based Payment
In January 2015, the Department of Health and Human Services announced
new goals for value-based payment and APMs in Medicare
New acronym: APMs= Alternative payment models

8. April 2016 - Medicaid Managed Care Regulations
CMS & State Medicaid Agencies may require a Managed Care Organization to:
Implement value based purchasing models for provider reimbursement
Participate in multi-payer delivery system reform or performance improvement
Phase out of supplemental payments – with option to move payments into value-based payment models

9. Commercial Insurers Accelerate VBP
 “Our industry is in the midst of a profound shift from fee-for-service, or volume-based care, to value-based care. Aetna has successfully built more than 72 ACO relationships with providers, growing from very small numbers in 2011 to more than 2 billion dollars in revenue today. …We plan to maintain 75 percent of our medical spending in value-based contracts by 2020.”
Charles Kennedy, MD, chief population officer for Healthagen, Aetna
Source: Health Care Learning & Action Network

10. Overview of Medicare Access and CHIP Reauthorization Act (MACRA)
Final Rule
Released in October 2016

11. MACRA Final Rule: Creates QPP, a New Medicare Part B Payment Program
APM
MIPS
Merit-based Incentive Payment System
Alternative Payment Models

12. MACRA Glossary of New Terms
New program name for MACRA’s change in Medicare Part B payments
Quality Payment Program (QPP)
New pay for performance approach under Medicare
Merit-Based Incentive Payment System (MIPS)
New payment models (e.g., ACOs) that move away from fee-for-service reimbursement
Alternative Payment Models (APMs)
New term for Medicare eligible providers
Eligible Clinicians
Overall clinician score from calculated based on four weighted performance categories
Final Score
Category of activities that replaces the Medicare EHR Incentive Program for meaningful use
Advancing Care Information (ACI)
Category of activities under MIPS that affects 15% of score; includes activities aimed at improving care
Improvement Activities

13. MACRA Eligible Clinicians (ECs)
Physicians, PAs, NPs, CNS, CRNA
After 2020, CMS may expand to other clinicians in Medicare FFS: PT, OT, NMW, CSW, Clinical Psychologists, Dieticians and Nutrition professionals
5 Types of Eligible Clinicians (ECs)
Hospitals/Medicare Part A payments
FQHCs/RHCs and Medicaid Providers
Not covered by MACRA:
1st year ECs
“Non-patient facing” provider
Low volume providers who do not bill at least $30,000 under the Medicare Physician Fee Schedule or care for more than 100 Medicare patients yearly
Advanced APM Qualifying Provider not scored under MIPS
Exclusions:

14. MACRA Timeline October 14, 2016: Release of Final Rule Jan – Dec 2017:
1st Performance Period for MACRA
March 31, 2018: Reporting Deadline for First Year
Jan – Dec 2019:
1st Payment Year = +/- up to 4%

15. 2017 Transition Year: “Pick Your Pace” Options
QPP
Test Only
Option 1:
Partial Year
Option 2:
Full Year
Option 3:
Advanced APM
Option 4:

16. MIPS: A Consolidation of 3 Programs
MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS)
Physician Value-Based Modifier
Physician Quality Reporting System
EHR Incentive Program and Meaningful Use

17. Maximum MIPS Payment Adjustments
Notes:
Losers fund winners
Top performers: - Up to 3X more with scaling factor
- Additional bonus up to 10% from
$500 M funded separately
Source: Leavitt Partners - MACRA: Quality Incentives, Provider Considerations, and the Path Forward

18.  How will MIPS measure performance?
Providers will receive a MIPS final score based on 4 weighted performance categories: 
Improvement activities
Advancing Care Information
MIPS
Final Score
0-100
Quality
Cost
CY19
60% 0%
15%
25%
CY20
50%
10%
CY21
30%

19. Quality % CPS: Measures: Requirements Methods:
Makes up 60% of your final score for PY 2017
Replaces PQRS; # of measures from 9 down to 6 measures
200+ measures to choose from
6 Measures are reported
Except for:
Groups using CMS web interface report 15 quality measures
MIPS – APMS report via CMS web interface
1 measure must be:
Outcome measure OR
High-priority measure
Measures updated each year
Specialist sets available
Methods for reporting:
QCDR
EHR
Qualified Registry
Web interface (groups only)
Claims (individual only)

20. Cost % CPS: Measures: Requirements: Method:
Score is based off of Medicare claims, including:
Measure 1:
Spending per Beneficiary (MSPB)
Measure 2:
Total costs per capita for all attributed beneficiaries
Makes up 0% of your final score for PY 2017
In later years scored higher
ECs will get feedback on this category in Quality and Resource Use Report (QRUR)
New 10 episode-specific cost measures
When clinician bills Medicare for diagnosis code gets included in episode
Minimum # of patients sample. Typically 20 or > 35 for MSPB
No data submission required
Validation of data is important!

21. Improvement Activities
% CPS:
Measures:
Requirements:
Method:
Makes up 15% of your final score for PY 2017
Full points for:
Certified PCMH/PCSP
Medical Home Model or Certain APMS
MIPS - APMS get 50% of full pts
90+ Activities in 9 subcategories
Access
Population Management
Beneficiary Engagement
Care Coordination
Patient Safety
Equity
…among others!
2-4 Activities required:
Highly weighted = 20 pts
Medium weighted = 10 pts
Medical home, transformation or public health activities have higher weight
Simple attestation suffices for reporting
Must be performed for a 90 consecutive day period

22. Advancing Care Information
% CPS:
Measures:
Requirements:
Reporting:
Makes up 25% of your final score
Replaces Medicare EHR Incentive Program
5 requirements in base score, can report more in for additional points
Flexible Scoring:
Base Score
Performance Score
Bonus
New Data Blocking Requirements
Group/TIN Level reporting like PQRS

23. How does MIPS Affect FQHCs & RHCs?
Page 185 of the Final Rule:
[CMS is] finalizing our proposal that services rendered by an eligible clinician under the RHC or FQHC methodology, will not be subject to the MIPS payments adjustments.
However, these eligible clinicians have the option to voluntarily report on applicable measures and activities for MIPS, in which the data received will not be used to assess their performance for the purpose of the MIPS payment adjustment.
Note:
RHC= all-inclusive rate methodology
FQHC =prospective payment system methodology
BUT!

24. IT DEPENDS ON HOW RHCs & FQHCs BILL!
RHCs must look at how much you bill traditional Medicare Part B using a 1500 claim form (versus using UB-04 claim form for the all-inclusive rate)
Determine: How much do we bill Medicare Part B?
If < $30K or 100 pts = no MIPS – meet low volume exemption
If more than > $30K, non-participation could mean a penalty
Determine how volume applies as individual ECs or as a group
How many eligible clinicians are billing Medicare Part B?
Need to exclude non-patient facing, first year providers, etc.
When in doubt, use Option 1: report something!
Scenario:
Five RHC eligible clinicians are a part of the same TIN and each bills $10,000 in Medicare Part B charges. Group has the option to report as a group and be subject to MIPS as a group (meaning they all get one group quality score) or to report as individual eligible clinicians and take the low-volume exemption.

25. MACRA Final Rule: Creates QPP, a New Medicare Part B Payment Program
APM
MIPS
Merit-based Incentive Payment System
Alternative Payment Models

26. What’s the big deal about APMs?
Stated intention of CMS that more and more of its $ will be spent in APMs over time
5% Annual Participation Bonus for Advanced APM participants from
Favorable scoring under MIPS for all APM participants
Annual update after 2025 is 0.75% for APM entities versus 0.25% for MIPS entities

27. Advanced Alternative Payment Models
Advanced APM participants are eligible for 5% bonus payment.
But, only some APMs are risk-bearing Medicare payment models that qualify for this bonus payment.
Next Generation ACO Model
Medicare Shared Savings Program – Tracks 2 & 3
Comprehensive Primary Care Plus (CPC+)
Comprehensive ESRD Care Model
Oncology Care Model Two-Sided Risk Arrangement (in 2018)
Cardiac & CJR Episode Model (in 2018)
In new MACRA
NPRM, Advanced APMs include:
MACRA does not change how any particular APM rewards value.
APM participants who are not “Qualifying Providers” (QPs) will receive favorable scoring under MIPS.

28. Not Every APM Will Qualify for 5% APM Bonus
Most physicians and practitioners who participate in APMs will be subject to MIPS and will receive favorable scoring under the MIPS clinical practice improvement activities performance category.
All APM
Participants
QPs in Advanced APMs
Only providers in Advanced APMs will be deemed qualifying APM participants (“QPs”):
Report APM quality measures
Use of Certified EHR
Meet Advanced APM criteria (risk-bearing or medical home model)
Must meet APM thresholds for payment and patient volumes
Have to be a qualifying physician in an eligible APM to get 5% bonus.
Eligible APMs are the most advanced APMs that meet the following criteria according to the MACRA law:
Base payment on quality measures comparable to those in MIPS
Require use of certified EHR technology
Either (1) bear more than nominal financial risk for monetary losses OR (2) be a medical home model expanded under CMMI authority
Have to meet thresholds to qualify:
More than 25% of Medicare payments in APM in 2019, 2020
More than 50% of Medicare payments in APM in 2021, 2022
More than 75% of Medicare payments in APM in 2023
Option for combined all payer APM thresholds: Beginning in 2021, this threshold % may be reached through a combination of Medicare and other non-Medicare payer arrangements, such as private payers and Medicaid.

29. How does QP status affect RHCs & FQHCs in APMs?
Excerpt of Pgs :
CMS proposed that beneficiaries in RHCs and FQHCs that participate in ACOs, and that are reimbursed under the RHC AIR or FQHC PPS be counted towards the QP determination calculations under the patient count method but not under the payment amount method.
Beneficiary will be included in the numerator of the Threshold Score for the patient count method if the beneficiary receives…professional services furnished by eligible clinicians in an Advanced APM Entity at RHCs and FQHCs.

30. Physician Compare
Coming Soon – Your MACRA performance score!

31. Impact of MACRA on Medicare Providers
Financial & Strategy Implications
Reputational Status
MACRA moves Medicare payment from one size fits all to a meritocracy
Market share will shift from low performers to high performers over time
Delay means disaster; exponential leaps in value will be needed to catch up with those that perform better as thresholds increase over time
Publicly available scores on quality and value that compare organizations/professionals will affect:
Health plan negotiations
Talent recruitment
Consumer choice

32. How can clinicians and staff prepare?
"People's lives can be absolutely transformed by being nudged along a slightly altered route.“
- Dr. Ben Fletcher

33. Case Study: Is your organization ready for new payment models?
Under the new payment models, you can’t get paid more unless you are here.
Your practice is here.
What do you do?

34. Some clinicians think MACRA means…
Stop seeing sick, non-compliant patients
Start accepting only patients who are healthy
But successful VBP/APM leaders understand
the 5-50 Rule.
5% of patients are responsible for 50% of costs.

35. Immediate Actions to Consider
Engage leadership & key clinicians
Medical home recognition a critical first step
Dominate your quality data
Analyze QRUR and other payer feedback
Review compensation models

36. Focus on Common Elements on the Payment Innovation Journey
Culture of Continuous Quality Improvement & Team Based Care
Patient Attribution & Empanelment
Performance Measurement, Data Analysis and Identification of Gaps in Care
Identification of Higher Risk, High Cost Patients & Targeted Care Management
Care Coordination across the Medical Neighborhood
Patient Engagement & Experience of Care

37. Thank you!
Questions?