1. Thomas Gustafson, Ph.D. Senior Policy Advisor March 2016
Post-SGR: Basics of MACRA Webinar for the Missouri Hospital Association
Thomas Gustafson, Ph.D.
Senior Policy Advisor
March 2016
Privileged & Confidential/Attorney-Client Privileged

2. Starting in 2019, Two New Pathways
New Pathway for
Alternate Pathway for
Merit-Based Incentive Program (MIPS)
Physician Quality Reporting System (PQRS)*
Value Based Modifier (VBM)*
Meaningful Use of E.H.R.*
Alternative
Payment
Model
(APM)
*3 Current Programs Sunset in 2018

3. MACRA Intended to Change Incentives Toward Value
Merit Based Incentive Payment Model (MIPS)
Scoring system based on quality measures and utilization measures
Bonus or Penalty can be as much as 4% in 2018, increasing to 9% in 2022
Alternative Payment Model (APM)
5% bonus each year (through 2024) if physicians derive a specified minimum amount of income from services furnished in APM entities
Different updates beginning in 2026: MIPS = 0.25%, APM = 0.75%
Accelerates creation of episodes of care

4. MACRA Incentive Timeline
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Fee Schedule
Update
0.5% 0%
0.75%
APM
0.25%
Non-APM
MIPS 4% 5% 7%
APMs
MIPS adjustment + or - 9%
PQRS, VM, EHR
Bonus Payment

5. Merit-based incentive payment system (MIPS)

6. Merit-Based Incentive Payment System (MIPS)
As a general rule, all physicians are eligible for MIPS.
MIPS has four performance categories:
quality,
resource use,
EHR meaningful use, and
clinical practice improvement activities.
Physicians who do not report MIPS measures will receive low performance scores and negative payment updates.
Scores will be reported on CMS’ “Physician Compare” website

7. Performance-Based Financial Risk Increases from +/-4% to +/-9%
Jan 1, 2019 – Dec 31, 2024
Phase-In of New System
Risk Corridors of +/- 4 to 9% Budget Neutral (Sum = 0)
Jan 1 – Jun 30
0% Update
Jul 1, 2015 – Dec 31, 2018
0.5% Update

8. Components of MIPS Scoring
CMS May Adjust Weights of Each Category Based on Consultation with Specialties

9. MIPS Composite Scoring System
Individual Performance in 4 Domains
Individual Composite Score Compared With
Performance Threshold
Mean / Median Composite Score from Prior Year For All Physicians
Single Composite Score
0 to 100

10. MIPS Provider Eligibility
In years 1 and 2
Physicians
Physician assistants
Nurse practitioners
Clinical nurse specialists
Nurse anesthetists
In years 3 and beyond, add:
Occupational therapists
Speech-language pathologists
Audiologists
Nurse midwives
Clinical social workers
Clinical psychologists
Dieticians/nutrition professionals

11. Alternative payment models

12. What are “Eligible” APMs?
Specified categories in the law:
CMS Innovation Center programs/demonstrations, including new “Physician Focused Payment Models”
Medicare Shared Savings Program (ACOs)
Health Care Quality Demonstration
Patient-Centered Medical Home
Eligible APMs must bear “more than nominal financial risk” (except for Patient Centered Medical Homes); use quality measures and EHRs

13. MDs Will Have Significant Incentives to Join APMs
MACRA includes a $500 million annual bonus pool, 2019 – 2024
Highest performers in MIPS (~top 12.5%) can receive a bonus of up to 10% from the pool
All “qualifying APM participants” will receive a bonus of 5% of total Medicare Part B payments in the prior year (with no performance requirement)
Bonus will be paid directly to the physician, even if the Medicare Part B payments were made to another entity
The bonus will be paid “in a lump sum, on an annual basis, as soon as practicable”

14. Long-Term Advantage of APMs (2025 – 2045)
Annual Medicare Income
2045
$526K / $581K
2035
$513K / $539K
APM
MIPS
2025
$500K
Year

15. May Be Difficult for Specialists to Participate in APMs
Only certain projects eligible (i.e., ACOs, CMS Innovation Center programs)
Must use certified EHR technology and quality measures “comparable” to MIPS
Bear more than nominal financial risk OR be a “medical home Phase II expansion model”
Eligible APM
In 2019, must receive at least 25% of Medicare payments through an APM; increases over time
Qualifies for bonus equal to 5% of Part B Medicare allowed charges in prior year
Qualifying APM Participant

16. APM Bonus Requires Minimum Share of Revenue
25%
50%
75%
Medicare
Revenue from APMs
Medicare Revenue from APMs OR
(Medicare + Other Payers) Revenue from APMs
2023+

17. Where will physicians land?

18. Qualifying APM participant?
CMS decides whether an MD is a “Qualifying APM Participant” and receives a bonus payment
Qualifying APM participant? 1
RECEIVE 5% BONUS
CMS will determine whether an MD is “MIPS-eligible,” a “qualifying APM participant,” or a “partially qualifying APM participant”
Physicians will not necessarily be able to “choose,” especially if they have few eligible APMs because of their specialties or where they practice

19. What happens if the MD doesn’t earn the APM bonus
What happens if the MD doesn’t earn the APM bonus? She’s eligible for MIPS!
MIPS Eligible? 2
No APM Bonus?
Almost Met Threshold for Qualifying APM
(Partially Qualifying APM Participant)
“Hold Harmless” if You Did Not Report MIPS Measures
Didn’t Come Close to Threshold
No Relief from MIPS Penalty

20. What happens if the MD doesn’t report MIPS measures?
Not Sure?
Do Both? 3
A physician who almost meets the qualifying APM participant definition and does not report MIPS measures is a “partially qualifying APM participant” who is held harmless -- does not receive either a 5% APM bonus or a MIPS downward adjustment
Any other physician is “MIPS-eligible” (thus will receive downward MIPS adjustment if he or she fails to report MIPS measures)

21. Improving the mips measures

22. New Category for Incentives: Clinical Practice Improvement Activities
Defined as “Activity that relevant eligible professional organizations identify as improving clinical practice or care delivery and the Secretary determines likely to result in improved outcomes
The Secretary must solicit recommendations from stakeholders to identify such activities 
Physicians in patient-centered medical homes or comparable specialty practices receive the highest CPIA scores
Those in APMs receive a minimum score of 50% of that amount

23. Clinical Practice Improvement Activities
One of the core competencies of the American Board of Medical Specialties (ABMS) Maintenance of Certification (MOC) Programs, defined as follows:
Practice-based Learning and Improvement: Show an ability to investigate and evaluate patient care practices, appraise and assimilate scientific evidence, and improve the practice of medicine.
Part I: Professionalism and Professional Standing
Behave in a professional manner
Act in the patients’ best interest
Hold a valid, unrestricted medical license
Part II: Lifelong Learning and Self-Assessment
Participate in high quality, unbiased educational and self-assessment activities determined by each Member Board
Part III: Assessment of Knowledge, Judgment, and Skills
Pass a written examination and other evaluations
Part IV: Improvement in Medical Practice
Engage in ongoing assessment and improvement activities to improve patient outcomes
Demonstrate use of evidence and best practices compared to peers and national benchmarks

24. CMS to Collaborate with Physicians to Improve Resource Use Measurement
The Affordable Care Act required CMS to develop a publicly available episode grouper by Jan 1, 2012 – but slow progress to date due to concerns about methodology
“It may be difficult to define clinically meaningful and statistically reliable quality measures for some specialties…” (MedPAC)
Also difficult to measure for small practices:
AMA letter to CMS in 2012 “more than 40 percent of groups of 25 physicians or more did not have enough data to calculate reliable cost and quality measures… [and] physician groups with the highest risk patients were… four times more likely to have poor cost scores...”
MACRA requires CMS to post on its website, within 180 days of enactment, a list of the episode groups that have been developed to date
Specialty societies have 120 days to comment on this information

25. New Codes for Describing Physicians’ Relationships with Patients as Primary or Supportive
CMS must develop patient relationship categories and codes that define the relationship and responsibility of a physician with a patient at the time of service
The new law includes 4 examples of a physician-patient relationship:
Primary responsibility for general and ongoing care over extended period of time
Continuing basis during an acute episode of care but in a supportive rather than lead role
Furnishes care on an occasional basis usually at the request of another physician
Only as ordered by another physician
CMS must post a draft list of relationship codes, seek comments on it, and update it annually

26. What others will be doing

27. Specialty Society Steps to Prepare for New System
Understand how affected by MACRA based on how they practice and their current experience with quality programs (PQRS, VM and MU)
Consider development of quality measures and explore qualified clinical data registry
Identify clinical practice improvement activities that describe the specialty and advocate to CMS for their adoption
Defined as “Activity that relevant eligible professional organizations identify as improving clinical practice or care delivery and the Secretary determines likely to result in improved outcomes
Engage with CMS on the definitions of new codes for resource use, including “care episode groups,” “patient condition groups” and codes that define physician-patient relationships

28. Physician Practice MACRA To-Do List
Get educated, or get help.
Explore your local APM options; consider joining an APM
Be a Meaningful User.
Report PQRS Measures.
Review your QRUR.
Look yourself up on Physician Compare.
Stay tuned for more info on clinical practice improvement.

29. Key Take-Aways No more SGR roller-coaster for MD payments
Reforms emphasize “value” over volume
Future MD payments will vary significantly to reflect organization and performance
Current incentive programs will be expanded
Looks like “business as usual” for now
But lots of activity below the surface
CMS regulations this year
2017 will be the performance year for 2019 MIPS payment changes
“Smart money” will be positioning for the future

30. Questions? Thanks for listening Tom Gustafson Arnold & Porter LLP
Washington, DC