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MACRA: Charting the Future of Physician Payment
August 27, 2015
CAPG: Who We Are
• CAPG represents over 190 physician groups in 39 states, Puerto Rico, and Washington, DC
• The model – financial and clinical accountability– Payment is capitated to the multi-specialty physician group
(usually per-member, per-month)– Physician group is clinically responsible for defined patient
population– Robust internal and external quality reporting programs
2
Converging Forces on Advanced Risk Contracting
Advanced Alternative
Payment Models
SGR Replacement
HHS Value Goals & Learning Network
CMMI Initiatives
(Pioneer, Next Gen ACO)
Medicare Advantage Rate Notice
3
MACRA: The Future of Physician Payments in Medicare• MACRA creates two paths:
– MIPS: “fee-for-service plus quality link” path– APM: accountable care organization or other risk-bearing
organization path
• Which path will be more attractive for physicians and physician groups?
• Between now and 2019 when incentives begin:– Assessing existing options– Building and testing new options– It’s all about the regs!
4
Sustainable Growth Rate (SGR) Formula
5
MACRA: How did we get here?
Congress acts to prevent
cuts
Congress cuts health
industry to pay for “doc
fix”
CMS Proposed
Cuts to Part B Fee Schedule
• Rinse and repeat -- 17 times!
• At a cost of more than $169 billion
MACRA: How did we get here?
• Huge majority in both chambers of Congress agree, enough is a enough!– House passes MACRA by a vote of 392-37– Senate passes MACRA by a vote of 92-8– President signed MACRA into law in April 2015
• New framework for physician payments charts the course for the future in Traditional Medicare
7
MACRA: Where are we now? 8
• Immediately replaces the old cycle with a period of stable updates; then offers two paths
Jan. 2015-June 2015
July 2015-December 2015
2016-2019 2020-2025 2026 and beyond
0.0% 0.5% 0.5% 0% 0.75% APM
0.25% non-APM
APM Bonuses
2019-2024
MIPS Bonuses/PenaltiesTrack One:
Track Two:
MACRA: Where are we going? 9
Year Merit-Based Incentive Payment System (MIPS)*
Eligible Alternative Payment Models (APMs)
2019 +/- 4% +5%
2020 +/- 5% +5%
2021 +/- 7% +5%
2022 +/- 9%(and beyond)
+5%(to 2024)
*Additional potential bonus for exceptional performersMIPS bonus pool is budget neutral
Two Paths: MIPS or APMs
Before MACRA, Fragmented Approach to Measuring Value
Physician Quality Reporting System (PQRS) (previously PQRI)
Value-Based Payment Modifier (VBPM)
Meaningful Use/Electronic Health Records (EHR)
What is it? Quality reporting program in Medicare Part B established in 2007. 12 reporting options; select among 280 quality measures and over 20 measures groups
Budget neutralquality and resource measurement program in Medicare Part B. Applies to all physicians and groups in 2017
Incentives and penalties for physicians who are meaningful users of electronic health records technology.
Penalty 1.5% for 20152.0% for 2016-2018
1.0% for 20152.0% for 20164.0% for 2017-2018
1.0% for 20152.0% for 20163.0% for 20174.0% for 2018
10
Experience in Existing Programs
PQRS
• 470,000 physicians face 1.5% penalty
• 48,000 practices qualify for bonus
• $214M total bonus pool
• $443/clinician; $4531/practice
VBPM
• 1,010 practices participate in year 1
• 14 groups get bonuses
• ~11M in bonuses and ~11M in penalties
MU
• CMS estimates that 256,000 providers subject to penalty (percentage of claims in 2015)
• Eligible practices can receive up to $44,000 over 5 years
11
Path 1: Roll Up of Existing Part B Quality Reporting into MIPS
PQRS
Value Based
Payment Modifier
Meaningful Use
MIPS
12
Existing Medicare
Part B Quality
Reporting Programs
Quality, 30%
Resource Use, 30%
CPI, 15%
EHR, 25%
MIPS
*Percentage weights transition over first two years; chart shows percentages for 2021 and beyond
Path 1: MIPS Composite Score on a Scale of 0-100
Exceptional Performers (bonus up to +10%)
13
0 Performance threshold to be set by HHS 100
0% or Positive AdjustmentNegative Adjustment
2019 – capped at -4%2020 – capped at -5%2021 – capped at -7%2022 and beyond capped at -9%
2019 – capped at +4%2020 – capped at +5%2021 – capped at +7%2022 and beyond capped at +9%
Path 1: Summary Points
• MIPS replaces existing quality reporting programs in Medicare Part B
• MIPS bonus opportunity is potentially significant, especially for high performers
• Experience with existing quality programs and complexity of new programs may be roadblocks to achieving very high bonus potential
14
Path 2: APMs that Qualify for 5% Bonus
Qualifying Model• Innovation Center
Model• Shared Savings
Program• Demo required by
federal law
Quality Measures• Quality measures
comparable to MIPS; and
• Uses certified EHR technology
Financial Model• Bears financial risk
for monetary losses in excess of a nominal amount; OR
• Certain primary care medical homes
15
Path 2: APM Thresholds 16
Percentage of revenue that must be earned through APM to be considered an “Eligible APM”
2019-2020 2021-2022 2023 and beyond
25% Medicare Part B payments attributable to
APM entity
Option 1: 50% Medicare Part B Revenue
Option 1: 75% of Medicare Part B Revenue
Option 2: 50% of all-payer revenue including 25% of Medicare Part B Revenue
Option 2: 75% all-payer Revenue, including 25%
Medicare Part B Revenue
Path 2: What are Qualifying APMs?
• To hit the revenue threshold and meet risk-bearing requirements in Medicare Part B, do you have to be in an ACO?– Potential modifications required to make ACOs more attractive
between now and 2019
• What will the medical home model look like?
• Potential for developments of new alternative payment models between now and 2019
17
Path 2: Developing New APMs 18
• MACRA seems to anticipate the need for new APM options
• Establishes a Physician Focused Payment Model Technical Advisory Committee – 11 Members that will be appointed within 180 days of MACRA
enactment– Process similar to MedPAC process
Path 2: New APMsTechnical Advisory Committee
19
Notice and Comment
rulemaking to develop criteria for evaluation of
new models
Stakeholders submit models
for review
Technical advisory
committee will review and make recommendation
to Secretary of HHS
Secretary of HHS will respond
Path 2: Summary Points
• Potentially more certainty in the 5% APM track
• Unclear how CMS is going to define “beyond nominal financial risk”
• Bonus “cliff” in 2024
20
Medicare Advantage APMs
• By July 1, 2016, HHS is required to report to Congress on the feasibility of integrating the APM concept in Medicare Advantage
• Study must “include the feasibility of including a value-based modifier and whether such modifier should be budget neutral”
21
Medicare Advantage on a Trajectory Parallel to FFS but More Advanced
22
Shared Savings Track 1, 2 and 3
Fee-for-service
Fee-for-service plus quality link
Medical home
Next Gen ACO (2017)
Traditional (FFS) Medicare
Fee-for-service
Fee-for-service plus quality link
Medical home
ACO
Capitation
Medicare Advantage
RISK
Concluding Thoughts
• New, converging pressures will make risk-based coordinated care models more attractive
• Substantial regulatory work remains to define and articulate the technical aspects of MACRA
• Time before incentives and penalties begin allows physicians to define and test new models; assess the opportunities in their market
23