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PART I: BASICS OF VALUE-BASED PAYMENTAdele Allison, Director of Provider Innovation StrategiesJuly 26, 2017

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© 2016 DST Systems, Inc. All rights reserved.

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AUDIENCE ENGAGEMENT

• Take out your smartphone

• Login to Pollev.com/adele

• On word clouds, please text answers in single responses (e.g., SingleResponses)

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• Value-Based Payment (VBP)• MACRA Final Rule• Merit-based Incentive Payment System• Advanced APMs• Questions

AGENDA

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Claims Data

Voluntary Clinical Reporting

Pay-for-Reporting

Pay for Higher “Value” Value = f (Quality + Efficiency)

MACRA – 2 Payment PathsAlternative Payment Model or MIPS

FEDERAL REFORM

Reform Paradigm Shifts• Delivery → Prevention, Health and Patient-

Centeredness

• Payment → Redesign Compensated

• Data → Distribute and Move Information

Affordable Quality Health Care

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“REPEAL OBAMACARE”

• President Donald Trump – FY2018 Proposed Budget –May 23, 2017

$69B in HHS discretionary authority

No direct Medicare cuts, but “streamline” appeals

Funding hits: State Medicaid funding (-$610B over 10 years), CHIP (-$19.7B over 10 years), NIH (-$5.7B and AHRQ would be rolled in), FDA (-$854B), CDC (-$222M), ONC (-$22M)

• Payment Innovations will continue

− Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) → Bipartisan, Bicameral

− Mandates traditional Medicare provider payment reform

− However, less prescriptive from federal government

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MACRA

• Enacted April, 2015

• Bipartisan, Bicameral Medicare Cost Containment law

• Mandates 2 Medicare VBP Provider Payment Paths:

‒ Merit-based Incentive Payment System (MIPS) – Payment differentially based on measures of Quality & Value

‒ Advanced Alternative Payment Models (APMs) – Risk-based contracting with Providers for defined services

• Performance begins 2017 for statutory effective date Jan. 2019

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1. Condition-Specific Population-Based Payment

2. Comprehensive Population-Based Payment

3. Integrated Finance & Delivery System

1. Alternative Payment Models (APMs) with Upside Gainsharing

2. APM with Upside Sharing & Downside Risk

1. Pay for Infrastructure & Operations

2. Pay-for-Reporting

3. Pay-for-Performance

4. Performance Rewards and Penalties

4 CATEGORIES OF VALUE-BASED PAYMENT (VBP)

Category 4Population-Based Payment (PBP)

Category 3Alternative Payment Built on FFS Architecture

Category 2FFS Linked to Quality & Value

Category 1FFS No Link to Quality & Value

Starting Point

Advancing Provider Alignment Creates Data and Operational ComplexitiesSource: HHS Health Care Payment Learning & Action Network, Financial Benchmarking White Paper, Feb. 2016

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PREDOMINANT PAYMENT REFORM MODELS

• Medical Home Incentives

• Care Management Fees

• Value-Based Payment Modifier (VBPM)

• Pay-for-Performance/Incentives

• Shared-Savings with PCMH / ACOs

• Accountable Care Organizations

• Bundled Payments

• Episode-Based Payment (e.g., OCM)

• Full/Partial Capitation + Performance

FFS

+ Q

ualit

y M

easu

res

Ris

k-B

earin

g

Category 2

Category 3

Category 4

Transform

ation from

Productivity M

gmt. to H

ealth-Value M

gmt.

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MACRA 2018 PROPOSED RULE

• 2018 proposed rule released June 20th

• Industry hoping for repeat transition year –

• CMS Rule theme → “Reduce the Burden”

• However, increased “low volume” threshold → 40% reduction in eligible clinicians

• CMS Fact Sheet: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/Proposed-rule-fact-sheet.pdf

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QPP HIGH-LEVEL 2018 PROPOSALQPP Area Flexibility Policy

Merit‐based Incentive Payment System (MIPS)

Strengthening Referral Paths “Virtual Group” option

Low‐Volume Thresholds Exemption if Medicare Part B volume is ≤ $90,000 or fewer than ≤ 200 patients (2018);

possibly adding # of billed services/items by 2019

EHR Allow 2014 CEHRT, Encourage 2015 CEHRT

Bonus Points Complex Patients, 2015 Edition CEHRT

Quality Scoring Incorporate performance improvement in calculation

Facility‐based Clinicians Facility‐based scoring option

Small Practice Clinicians Hardship exception under Advancing Care Information

Bonus point to the final score

3‐Points under quality performance when data completeness not met

Advanced Alternative Payment Model (A‐APM)

Nominal Amount of Risk Standard Extend the 2 year rate – 8% of Medicare A & B – for an additional 2 years until 2020

Slow the increasing of risk amount for Medical Homes 

All‐Payer Combination Option Additional details set forth for PY2019

APM Scoring Standard Reduced burden for MIPS APM participants

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• Value-Based Payment (VBP)

• 2017 MACRA Final Rule• Merit-based Incentive Payment System• Advanced APMs• Questions

AGENDA

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MACRA BY THE NUMBERS• 95 – Pages long

• 31 – “Reasonable Cost Reimbursement”

• 18 – Risk

• 27 – EHR or Technology to Manage, Measure and Report

• 8 – Meaningful Use

• 38 – Quality Measures

• 19 – Resource Use or Efficiency

• 171 – “Measures” or “Measurement”

• 103 – Data

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PREDOMINANT PAYMENT REFORM MODELS

FFS

+ Q

ualit

y M

easu

res

Ris

k-B

earin

g

Category 2

Category 3

Category 4

MA

CR

AQ

uality Payment Program

(QPP)

Merit-Based Incentive Payment System (MIPS)(2017 Perform, 2019 Payment)

Advanced APM (A-APM)

• Medical Home Incentives

• Care Management Fees

• Value-Based Payment Modifier (VBM)

• Pay-for-Performance/Incentives

• Shared-Savings with PCMH / ACOs

• Accountable Care Organizations

• Bundled Payments

• Episodes of Care Groupers

• Full/Partial Capitation + Performance

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FINAL RULE – 2017 TRANSITION YEAR

CMS, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, Final Rule, Released to Office of Federal Register, October 14, 2016

MIPS – Penalty Avoidance

MIPS – Delayed Start

MIPS – Ready to Go

Advanced Alternative Payment Model

Submit by Mar. 31, 2018− 90 days of data between

Jan. 1 and Oct. 2, 2017− 1 Quality Measure,− 1 Clinical Practice

Improvement Activity, or− 5 required Advancing

Care Information measuresR

equi

rem

ents

Submit by Mar. 31, 2018− 90 days of data between

Jan. 1 and Oct. 2, 2017− > 1 Quality Measure,− > 1 improvement activity,

and/or − > 5 required Advancing

Care Information measures

Submit by Mar. 31, 2018− “Full Year” of data− 6 Quality Measures (1

outcome) – MIPS APM Groups report 15;

− 4 improvement activities; or 2 for small, rural, HPSA or non-patient facing

−Required or up to 9 of advancing care information measures

Significant portion of Medicare patients or payments− Qualified Participant (QP)

determination “snapshot” and inclusive

− Driven by patient or pay thresholds

Opt

ions

APMs

MIPS APMs

Advanced APMs

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• Value-Based Payment (VBP)• MACRA Final Rule• Merit-based Incentive Payment System• Advanced APMs• Questions

AGENDA

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MIPS COMPOSITE PERFORMANCE SCORE

CMS, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, Final Rule, Released to Office of Federal Register, October 14, 2016.

Performance Year / 

Application Year

Quality MeasuresResource Use 

or CostImprovement Activities

Advancing Care Information

DescriptionReplaces CMS Physician Quality Reporting System (PQRS)

Replaces ACA Value‐based Payment Modifier

New category of measurement; Medical Homes and NCQA PCSR receive full credit; 93 activities available

Replaces CMS EHR Incentive Programs f/k/a Meaningful Use; 

Reporting Methods

Claims, CSV, Web Interface (for group reporting), EHR, Qualified Clinical Data Registry (QCDR)

ClaimsAttestation, QCDR, Qualified Registry, EHR Vendor 

Attestation, QCDR, Qualified Registry, EHR Vendor, Web Interface (groups only)

2017 / 2019 60% 0%* 15% 25%

2018 / 2020 50% 10% 15% 25%

2019 / 2021 30% 30% 15% 25%*Measured for feedback only in 2017

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MIPS – CPS PAYMENT ADJUSTMENTS• Positive / Negative adjustments are CMS budget neutral• Scoring → “Points” earned under each category, 0-100 points• Eligible Clinicians (ECs) → perform all or none of categories• ECs performing none → Composite Performance Score (CPS) of zero

and subject to maximum negative adjustmentFinal Score Points MIPS Adjustment

0.0 – 0.75 Negative 4 percent

0.76 – 2.9 Negative MIPS payment adjustment > ‐4.0% and < 0.0% on a linear sliding scale

3.0 0.0% adjustment

3.1 – 69.9Positive MIPS payment adjustment > 0.0% to 4.0% x a scaling factor to preserve budget neutrality, 

on a linear sliding scale

70.0 – 100Positive MIPS payment adjustment of 4.0% AND additional MIPS bonus for “exceptional 

performance” of 0.5 percent to 10.0% on a linear sliding scale x scaling facture 

CMS, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, Final Rule, Table 31, Released to Office of Federal Register, October 14, 2016

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MIPS ESTIMATED IMPACT YEAR 2019

Clinician Specialty or Type

Total MIPS Eligible TIN

/ NPIs

Total Allowed Charges

Estimated Aggregate +/-Adjustment

Per TIN / NPI Average MIPS

Negative Adjustment (Up To)

ALL SPECIALITIES 676,722 $78,454,000,000 ± $321,000,000 - $5,846.00

Cardiology 24,657 $5,172,000,000 ± $17,000,000 - $9,317.00Family Medicine 71,073 $5,802,000,000 ± $26,000,000 - $4,631.00General Surgery 18,118 $1,734,000,000 ± $8,000,000 - $5,134.00Geriatrics 3,044 $371,000,000 ± $2,000,000 - $7,717.00Internal Medicine 80,871 $9,320,000,000 ± $39,000,000 - $5,741.00Nurse Practitioner 51,004 $1,763,000,000 ± $11,000,000 - $7,379.00

Ob/Gyn 18,578 $487,000,000 ± $2,000,000 - $2,447.00Physician Assistant 42,402 $1,284,000,000 ± $6,000,000 - $8,589.00CMS, Medicare Program; Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule, and Criteria for Physician-Focused Payment Models, Final Rule, Table 61, Released to Office of Federal Register, October 14, 2016

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• Value-Based Payment (VBP)• MACRA Final Rule• Merit-based Incentive Payment System

• Advanced APMs• Questions

AGENDA

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27%

51%

22%

25% in APMs (Categories 3 & 4)

Commercial

Medicare Advantage

Managed Medicaid

PRIVATE APM ADOPTION & GROWTH

Sources: HHS Health Care Payment Learning and Action Network, 2016 Fall Summit, APM Measurement, October 25, 2016

• 2016 Public and Private National Health Plan Survey

• Participants→ > 128 million Americans, ~ 44% of Market− Commercial → 26 health plans, 90 million lives, 44% of market

− Medicare Advantage → 23 health plans, 10 million lives, 58% of MA market

− Managed Medicaid → 28 health plans and 2 states, 28 million lives, 39% of Medicaid

2015

62%15%

23%Legacy Payments(Category 1)

FFS linked to Quality(Category 2)

APMs (Category3 & 4)

2016

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CMS APM vs. A-APM

CMS Alternative Payment Model (APM)

CMS Advanced Alternative Payment Model (A‐APM)

There is a difference!

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2-PART QUALIFIER FOR A-APMs

Nominal Risk Standard

Volume Threshold

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VOLUME THRESHOLD

• Non-advanced APM− Volume threshold < 25% of Part B

payments; or < 20% of Medicare patients

• Advanced APM− Volume threshold ≥ 25% of Part B

payments; or ≥ 20% of Medicare patients

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FINANCIAL REWARDS

• Non-advanced APM or MIPS APM− APM-specific Rewards

− MIPS Opt-In – Collective Scoring

• Clinicians Scored Individually• Scores averaged across APM• Average score applied to all APM clinicians subject to MIPS

− MIPS Opt-Out – No Scoring

• Advanced APM− APM-specific Rewards− Lump sum incentive of 5% of Medicare payments− Qualified Participants (QPs) not subject to MIPS

• Not in APM− MIPS Rewards (or penalties)

Earning more than

 fee schedule

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JUST REMEMBER …

We’re all in this together –by ourselves!

‐ Lily Tomlin

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THANK YOU

Adele AllisonAMAllison@DSTHealthSolutions.com

@Adele_Allison

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