MACRA, MIPS, and APM’sUnderstanding Medicare’s Quality Payment Program (QPP)

John Patrick Yeatts, M.D., M.P.H.Division of Hospital MedicineOffice of the Vice President for Medical Affairs / CMODuke University Health System

None

Disclosures

CurrentHospitalist at Duke University HospitalMedical Director within the Office of the Health System VPMA / CMO

Strategic initiatives related to Payer Strategy, Network Development

EducationUNC-Chapel Hill - Economics and Politics, Morehead ScholarGoldman Sachs International, London - AnalystBryn Mawr College – Post Bac Pre MedUNC Chapel Hill – M.D. / M.P.H.Duke University Hospital – Internal Medicine / Management & Leadership

My Background

1. Appreciate the historical context for the current state of health care payment reform

2. Understand the essential elements of the Quality Payment Program (QPP) created by MACRA

3. Identify the potential implications of the QPP on provider practice

Learning Objectives

Historical Context for Payment Reform

Understanding the Quality Payment Program

Implications and Insights

Agenda

Why we’re here today

Deloitte’s2016SurveyofUSPhysiciansn =523physicians(non-pediatricgeneralistsandspecialists)

Why we’re here today

Deloitte’s2016SurveyofUSPhysiciansn =523physicians(non-pediatricgeneralistsandspecialists)

Ignore at your own risk!

Historical Context for Payment Reform

Understanding the Quality Payment Program

Implications and Insights

Agenda

The U.S. spends a lot on healthcare

10.0

12.0

14.0

16.0

18.0

20.0

1990 1994 1998 2002 2006 2010 2014 2018 2022

ShareofGDP

(%)

Source:CucklerGetal.,“NationalHealthExpenditureProjections,2012–22:SlowGrowthuntilCoverageExpandsandEconomyImproves”HealthAffairs 32,no.10(2013).

U.S. Healthcare Spending, as a share of GDP

The U.S. spends more than other countries

U.S. health care spending is variable

Average Life Expectancy, 1970 & 2011

Relatively poor return on spending

Thereisanunclearreturnonourspending

And it’s not just life expectancy

ToErrisHumanInstituteofMedicine,1998

98,000peopledieannuallyintheU.S.frommedicalerror

Medicalerrorsareprimarilyasystemproblem

Increasing Attention to Quality

CrossingtheQualityChasmInstituteofMedicine,2001

Outlinespathforimprovingqualityinhealthcaredelivery

Healthcareshouldbe:- Safe- Effective- Patient-centered- Timely- Efficient- Equitable

Past:Volume- Based Future:Value- Based

Careforindividuals Managepopulations

Specialtycarefocus Primarycarefocus

Facilitatingthistransitionisamajorundertakingforpayers,providersandpatients

Feeforservice Value/Riskbasedreimbursement

A New Paradigm: Value-Based Care

Nobody Knew Health Care Could Be So Complicated

Whatis“value”inhealthcare?Whogetstodefineit?

• Pharmaceuticals:– Should we pay $$$$ for drugs to treat XYZ disease?

• Technology:– Should we start using the newest “ABC” implant or device?

• Providers– Should we pay “inefficient” or “low quality” hospitals and doctors less?

• Population health: – Should we pay for population based outcomes?

Brief Historical Context for Payment Reform

Understanding the Quality Payment Program

Implications and Insights

Agenda

The QPP was formed by MACRA

MACRA:MedicareAccessandCHIPReauthorizationActof2015

MedicareSustainableGrowthRate(SGR)

MedicareQualityPaymentProgram(QPP)

Repealed Created

MIPS:Merit-basedIncentivePaymentSystem

APMs:AdvancedPracticeModels

a pieceoflegislation

A Word about the SGR

MedicareSustainableGrowthRate(1997– 2015)

• LegislativemechanismtoensureannualincreasesinMedicareexpensedidnotexceedgrowthinGDP

• Regulatedproviderexpenseandsomeexpensesincidentaltoprovidervisits(labtests,imaging,physician-administereddrugs)

• Medicarebudgetdeterminedannually• Actualspendingcomparedwithbudget

Ø Ifspendinghigher,providerpaymentsdecreasedthefollowingyear

Ø Ifspendinglower,providerpaymentsincreasedthefollowingyear

The SGR: In practice

1997– 2001:Actualexpenditures<budgeted,paymentsincreased

2002:Actualexpenditures>budgeted,-4.8%paymentadjustment

2003 - 2015:Actualexpenditures>budgeted,multiple“docfixes”toavoidfurthercuts

2015:MACRArepealstheSGR

M.E.I.=MedicareEconomicIndex(indexofthecosttooperateatypicalmedicalpractice)

MACRA has two tracks

MACRA:MedicareAccessandCHIPReauthorizationActof2015

MedicareQualityPaymentProgram(QPP)

Created

MIPS:Merit-basedIncentivePaymentSystem

CombinesCMS’existingqualityreportingprogramsintoonenewprogram

APMs:AdvancedPracticeModels

Createsnewframeworksforrewardinghealthcareproviderswhoprovidevalue-basedcare

MACRA appliestopaymenttoPROVIDERSonly,nottohospitalsorotherfacilities

2016 2018

NewCMSGoals:

30%

85%50%

90%

The Merit-based Incentive Payment System (MIPS) links

fee-for-service payments to quality and value.

\

MACRA also provides incentives for participation in Alternative Payment Models (APMs) and bonus payments to “eligible”

APMs

All Medicare fee-for-service (FFS) payments

Medicare FFS payments linked to quality and value

Medicare payments linked to quality and value via APMs

Medicare Payments to those in “eligible” (most highly advanced) APMs under MACRA

How MACRA Helps CMS Accomplish Its Goals

Which track will you belong to?

500,000providers

70,000– 120,000providers

What is “MIPS”?

The Merit-based Incentive Payment System or “MIPS” combines parts of the Physician Quality Reporting System (PQRS), the Value Modifier (VM or Value-based Payment Modifier), and the Medicare Electronic Health Record (EHR) incentive program into a single program.

A single MIPS composite performance score will factor in performance in 4 weighted performance categories:

MIPSCompositePerformance

ScoreQuality ResourceUse

:Advancing

CareInformation

2aImprovementActivities

ReplacesPQRS

New ReplacesMeaningfulUse

ReplacestheValue-BasedModifier

Weighted Performance Categories Under MIPS

Inanygivenyear,themajority(60%)ofscoreisbasedonQualityandResourceUse(a.k.a.,cost)

October2016– FinalRule– ResourceUse=0%andQuality=60%

Measures: A Closer Look

Quality

•RequiresdatasubmissiontoCMS

•Mostparticipantswillreportupto6measures

•Groupssubmittingelectronicallywillreport15measures

AdvancingCareInformation

•Attestcompletionofmeasures

• Fulfillasetof5requiredmeasures

• Submitupto9additionalmeasuresforextracredit

ClinicalPracticeImprovementActivities

•Attestcompletionofactivities

•Mostparticipantsattestthattheycompletedatleast4improvementactivities

ResourceUse

•Nodatasubmissionrequired

•Calculatedfromadjudicatedclaims

•WillNOTimpactpaymentadjustmentsin2019

Yougettoselectwhichmeasuresandactivitiestoreport

Measuresarespecialty-specific,butthereisoverlapofmeasuresbetweenspecialties

Examples of Quality Measures (Submit Data)

Diabetes:FootExam•Thepercentageofpatients18-75yearsofagewithdiabetes(type1andtype2)whoreceivedafootexam(visualinspectionandsensoryexamwithmonofilamentandapulseexam)duringthemeasurementyear

DocumentationofSignedOpioidTreatmentAgreement•Allpatients18andolderprescribedopiatesforlongerthansixweeksdurationwhosignedanopioidtreatmentagreementatleastonceduringOpioidTherapydocumentedinthemedicalrecord.

UseofImagingStudiesforLowBackPain•Percentageofpatients18-50yearsofagewithadiagnosisoflowbackpainwhodidnothaveanimagingstudy(plainX-ray,MRI,CTscan)within28daysofthediagnosis.

AvoidanceofAntibioticTreatmentinAdultswithAcuteBronchitis•Thepercentageofadults18-64yearsofagewithadiagnosisofacutebronchitiswhowerenotdispensedanantibioticprescription

Approximately55measureswhichmaptoGeneral/FamilyPractice

Advancing Care Information (Attest)

FiveRequiredMeasures• SecurityRiskAnalysis:Perform1• E-Prescribing:Transmitatleast1prescriptionelectronically• ProvidePatientAccess:Onlineaccessforatleast1patient• SendSummaryofCare:Createandsendforatleast1encounter• Request/AcceptSummaryofCare:Receiveandincorporateforatleast1newpatient

AdditionalMeasures(Examples)• SecureMessaging: Sendtoorreceivefromatleast1patient• ClinicalDataRegistryReporting: Haveanactiveengagementtosendclinicaldataelectronicallytoaclinicaldataregistry

• Patient-GeneratedHealthData: Incorporatepatient-generateddataintotheHERforatleast1patient

Examples of Improvement Activities (Attest)

Implementationoffallscreeningandassessmentprograms•Implementationoffallscreeningandassessmentprogramstoidentifypatientsatriskforfallsandaddressmodifiableriskfactors(e.g.,Clinicaldecisionsupport/promptsintheelectronichealthrecordthathelpmanagetheuseofmedications,suchasbenzodiazepines,thatincreasefallrisk).

Collectionandfollowuponpatientexperienceandsatisfactiondataonbeneficiaryengagement•Collectionandfollow-uponpatientexperienceandsatisfactiondataonbeneficiaryengagement,includingdevelopmentofimprovementplan.

Regulartrainingincarecoordination•Implementationofregularcarecoordinationtraining

Over90activitiestochoosefrom

• Based on the Composite Performance Score, providers will receive positive, negative or neutral adjustments

• Each provider will receive a quality score between 1 and 100

• Those above average will be eligible for incentives, those below average will receive penalties

MAXIMUMAdjustments

Adjustment to provider’s base rate of Medicare Part B payment

4% 5%7%9%

2019 2020 2021 2022 onward

-4%-5% -7%-9%

How Payment Works for Providers Under MIPS

Exceptions to MIPS:

What about APM’s?

ProvidersintheirfirstyearofMedicareparticipation

ProvidersbelowMedicare’slowvolumethreshold•Youbilllessthanorequalto$30,000inallowableMedicarePartBchargesperyearOR•Youseefewerthan100Medicarebeneficiariesperyear

Providerswhoaren’toneofthefollowing•MD•PA•NP•ClinicalNurseSpecialists• CertifiedRegisteredNurseAnesthetist

QualifyingParticipants(QP’s)inEligibleAPMs

What is an APM?

Mostarenot“eligible”orhighlyadvancedAPM’s

ProvidersinmostAPM’swillbesubjecttoMIPSbutwillreceivefavorablescoring

AlloftheseareAPM’sandconstitutenewapproachestopayingprovidersforvalue

CMSInnovationCenterModel(section1115A)

• AccountableCareOrganizations(ACO’s)

• Bundles• PatientCenteredMedicalhome

MSSP(MedicareSharedSavingsProgram)

• BasicallyACO’s

DemonstrationundertheHealthCareQuality

DemonstrationProject

• GundersonLutheranHealthSystem

• IndianaHealthInformationExchange(IHIE)

• MeridianHealthSystem• NorthCarolinaCommunityCareNetwork(NC-CCN)

DemonstrationrequiredbyFederalLaw

• Unclear

What is an “eligible” or advanced APM?

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) are a medical home model expanded under CMMIauthority

ProviderswhoreceivepaymentsfromaneligibleAPMaredefinedaseitherQualifyingParticipants(QP’s)orPartialQualifyingParticipantsbasedonmeetingeitherthePaymentor PatientRequirement

APM Participation Requirement

PaymentThreshold TotalPaymentsinEligibleAPM

TotalPartBPayments=

Determination of Qualifying Participants or Partial Qualifying Participants status is based onwhether or not a percentage of total Part B payments or Patients is derived from an eligible APM.

• Qualifying participants:• Meet the payment or patient threshold• Receive a 5% bonus on their total Part B payments• Do not have additional MIPS reporting• 0.75% payment adjustment in 2026

• Partial qualifying participants:• Fall short of revenue threshold• Do not receive a 5% bonus on their total Part B payments• 0.25% payment adjustment in 2026• Can choose whether to report MIPS*

• Choosing not to report will result in no payment adjustment for that year• Decision is made at the entity level and applies to all providers

PatientThreshold AttributionEligiblePatients

AttributedPatients=

*Unclearwhetherthiswillbeachoiceorimposed

Payment and Patient Thresholds

Boththresholdsincreaseovertime

List of Advanced APM’s

ComprehensiveESRDCare– TwoSidedRisk

ComprehensivePrimaryCarePlus(CPC+)

NextGenerationACOModel

SharedSavingsProgram– Track2

SharedSavingsProgram– Track3

OncologyCareModel(OCM)– Two-SidedRisk

ComprehensiveCareforJointReplacementPaymentModel(Track1)

CMSintendstoexpandlistofAdvancedAPMseachyear

Initial performance period: Jan 1, 2017 – Dec 31, 2017Can start collecting data anytime, but the more the betterMust submit data to CMS by March 31, 2018First payment adjustment on Jan 1, 2019

Timeline and Key Dates

Choices in 2017: Data Submission

If… Then… When?

Youdonot submitanydatatoCMS

Automatic4%negativeadjustment

2019

Yousubmita“minimum”ofdatatoCMS

Nodownwardadjustment,butnoincreaseeither

2019

Yousubmit90daysofdatatoCMS

Eligiblefora partialfeescheduleadjustment

2019

Yousubmitafullyear’sworth ofdata

Eligible forafullfeescheduleadjustment

2019

Feeschedule“adjustment”=positiveornegative

Agenda

Historical Background for Payment Reform

Overview of the Quality Payment Program

Implications and Insights

MACRA ≠ ACA

2009

“Obamacare”

AccesstoCare

Partisansupport

FutureTBD

2015

“MACRA”

ProviderPaymentReform

Bipartisansupport

Notgoingaway

Risk = cost of provider services

MACRA shifts risk to providers

ProvidersinMIPSwillbeheldincreasinglyaccountableforcostovertime

RemembertheFinalRule:ResourceUse=0%inYear1

Risk = cost of provider services

MACRA shifts risk to APM providers, too

ProvidersinAPMsbetterhavetheirmodelhonedby2025,whenthe5%bonusesend

5%bonusends

• MIPS is budget neutral• This differs from meaningful use, where

everyone who hits a threshold gets incentive

• Provider bonuses for some will be offset by penalties for others

• Competition among providers, but not in the traditional sense of just patients in the door

MIPS may foster competition

Budget neutrality will mean funds will flow from small group practices to larger group practices

Small practices will be adversely affected

TheburdensofMIPSwillbebetterabsorbedbylargerpractices

Help for smaller practices

ProvisioninMACRAtohelppracticeswith<15clinicians,includingthoseinrural,medicallyunderserved,andhealthprofessionalshortageareas

CMSnamesalocalorganizationto:- Assistpracticeswithqualityreportingmeasures- Engagepracticesincontinuousqualityimprovement- OptimizehealthITwithpractices- Evaluateapractice’soptionsforjoininganadvancedAPM

ForNC/SC/Georgia/FloridathisisAlliantGMCF(GeorgiaMedicaid),aMedicareQualityInnovationNetwork-QualityImprovementOrganization(QIN-QIO)

CMS wants you to become an APM

The5%bonusinyears2019– 2024ismeanttoentice:

1. ProviderstogravitatetowardsAPMsandbecomeQP’sinaneligible(or“advanced”)APM

2. ForexistingpracticestoseekalignmentwithaneligibleAPM

3. Fornon-eligibleAPM’stobecomeeligible

Justremember:

EligibleAPMsbearsignificantfinancialrisk

MIPS vs APM: Which is better?

Forhighperformingpractices,whichtrackmakesmoresense?

Itmaybedifficulttobeaconsistent“TopPerformer”inMIPSbecauseMIPSisbudgetneutral(e.g.,azerosumgame)

• Will CMS provide practices data-driven feedback in a timely manner to drive performance?

• How easy will it be to move between pathways?

• How will MACRA affect provider transitions and their value in the marketplace?

• How will MACRA affect physician productivity?

Outstanding questions

Questions?

Appendix

Summary:MIPSvsAPMMIPS v. APM

• Performance based on quality, resource use, clinical practice improvement activities and meaningful use of EHRs

• Significant reporting burden• 4-9% of total Part B Spending at risk over

time over future FFS rates

• Eligible for 5% bonus on Part B claims (2019-24)• Higher update starting in 2026• No MIPS reporting required

PQRS* MeaningfulUse*

Value-basedModifier*

Merit-BasedIncentivePaymentSystem(MIPS)

QualifyingParticipant(providermeetsthresholdfor“significant”participationinAPM)

PartiallyQualifyingParticipant(providerdoesnot meet“significantparticipation”inAPMthreshold)

• Not eligible for 5% bonus• Lower annual update • MIPS optional, but will receive no payment

adjustment for that year

• Bothoptionscontainsomelevelof“risk”• Bothmodelsrequireafocuson“efficiency”tosucceed• ParticipantsinaneligibleAPMqualifyforbonuseligibility(whichcanhelp

offsetsomerisk)

Government- ValueBasedPurchasing- Valuebasedmodifier- PhysicianQualityReportingSystem

(PQRS)- MeaningfulUse- MIPSandAPM- ACOs(MedicareandMedicaid)- HospitalReadmissionsReduction

Program- HospitalAcquiredConditionsProgram- MedicareAdvantage:STARratings- HospiceQualityInitiative- Manyothers

PrivateInsurers:- ACO- Narrownetwork- Highperformingnetworks

Providers- Internalqualitybenchmarkingfor

QIandcompensation- Transparencyofpatients

satisfactionandoutcomes

Many Value Based Initiatives

Paymentmechanismsfocusedonbothcostandquality

TheU.S.spendsalotofmoneyonhealthcare,bothinabsolutetermsandrelativetosimilarcountries

TheU.S.derivesquestionablevaluefromitshealthcarespending

Thereisincreasingfocusonenhancingvalueinhealthcare

Howonedefinesvalueisdebatable

Historical Context: Key Points