What does it mean for Physicians and other Medicare Part B Providers?

Caution: The following blog post is rife with acronyms. This humble author apologizes in advance, but also encourage readers to learn each three letter term and its significance. The concepts discussed herein are the building blocks of the most significant change in payment for healthcare services since the 1960s.

On April 27, 2016, HHS released its plan—in the form of a proposed Rule—for streamlining quality and performance measures for most Medicare Part B providers (i.e. physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists) and encouraging provider participation in value-based payment models. This rule establishes the new Quality Payment Program (QPP) framework, which consists of two new pathways for provider evaluation and payment—the Merit-based Incentive Payment System (MIPS) and participation in Advanced Alternative Payment Models (APMs). The QPP stems from the changes passed as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), passed in April of last year. Participation in one of the QPP pathways will form the new basis for the level of payment for services Medicare Part B providers will receive. CMS will begin collecting data beginning in 2017. They will analyze the data for one year, and then use the data to adjust Medicare payments for eligible providers starting January 1, 2019.

The biggest takeaway from this proposed Rule? Physicians should start planning for this change IMMEDIATELY to best position their practice for financial sustainability.

How does the MIPS Rule consolidate existing quality measure programs?

One of the primary goals of the QPP is to ease administrative burden on providers by eliminating reporting redundancies. CMS will collapse the three existing reporting mechanisms to track quality, cost and performance—the Physician Quality Reporting System (PQRS), the Meaningful Use/EHR Incentive Program (MU), the Value-based Payment Modifier (VBM)—into the MIPS. The purpose of MIPS, according to CMS Acting Administrator Andy Slavitt, is to enable providers to be "patient-centric, practice-driven and focused on connectivity." ALL eligible providers must report through MIPS in the first year (2017).

The MIPS score will determine whether there is an upward, neutral, or downward adjustment in Medicare reimbursement, and is made up of 4 key components: Cost, Quality, Clinical Practice Improvement Activities, and Use of EHR Technology. Here’s how it works:

  1. COST. In place of VBM, HHS will use Medicare data, including 40 episode-specific measures that account for differences among specialties, to evaluate cost savings—this measure will make up 10% of the MIPS score in the first year.

  2. QUALITY. In place of PQRS, MIPS will require that providers select six quality measures to report to HHS. Performance on these quality measures will account for 50% of the total MIPS score in the first year.

  3. USE OF EHR TECHNOLOGY. In place of Meaningful Use, MIPS will require that providers select quality measures that reflect how they use EHR technology in their practice. The focus of these measures is interoperability, compliance, and information exchange.

  4. CLINICAL PRACTICE IMPROVEMENT. 15% of the MIPS score will be based on provider adoption and implementation of clinical practice improvements (e.g., care coordination, patient safety programs). HHS will provide a list of more than 90 clinical practice improvement activities. Providers can choose what makes the most sense for their practices.

Which Advanced Alternative Payment Models (APMs) qualify for incentives?

The second purpose of the QPP is to incentivize participation in APMs. Providers participating in APMs will be exempt from the MIPS, and will quality for an additional incentive payment. To quality for incentive payments, providers must have a threshold amount of payments tied to the Alternative Payment Models.  APMs include limited CMS innovative payment and care delivery models, generally those that carry downside risk. In the first year, APMs will include:

  • Track 2 and Track 3 Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs)

  • Next Generation ACOs

  • Patient-Centered Medical Homes (PCMH)

  • Comprehensive Primary Care Plus (CPC+) Initiative

  • Certain bundled payment models

  • Comprehensive ESRD Care Model (Large Dialysis Organization Arrangement

New APMs will be added year over year. Starting in 2019, providers may be able to qualify for incentive payments based, in part, on participation in Advanced APMs developed by non-Medicare payers, such as private insurers or state Medicaid programs.

What do the financial incentives for physicians look like?

Both the MIPS and APM options carry potential downside risk. Providers who opt into APMs become eligible for a 5% Medicare Part B bonus from 2019-2024. These providers are exempt from MIPS. Providers who remain in MIPS remain in fee-for-service. Depending on the MIPS score (discussed above), providers will be eligible for a positive, negative, or neutral fee schedule adjustment.  Payment adjustments will range from a max of 4% in year one, to as much as 9% in 2022 and beyond. The highest performers will be eligible for additional bonuses.

What does this mean for physician practices RIGHT NOW?

Time is already running out for providers to opt into advance APMs. MSSP and Next Gen applications are due this spring, and CPC+ applications will only be accepted through this summer. In addition, providers that choose not to participate in APMs (most likely the majority) will need to prepare for MIPS reporting, which starts January 1, 2017, unless (1) they’re newly enrolled in Medicare or (2) have less than or equal to $10,000 in Medicare charges and less than or equal to 100 Medicare patients. The last reporting period for PQRS, MU, and VBM is January 1, 2016-December 31, 2016.

Note: Smaller eligible practices may be able to create a “virtual group” that can help solo and small practices spread out reporting—essentially, using a composite score from all practices. Contact Nixon Law Group for more details.

In the not-so-distant future of healthcare, both government and private payers will expect providers to take on more responsibility than ever for (1) managing the cost of the care delivered to their patients, and (2) managing the health outcomes for their patients. This requires a significant investment in technology, coordination with other providers to keep patients out of higher-than-necessary acuity settings, and care process improvement. For small practices, the burden will be heavy without creative thinking around partnerships and growth. In the category of good news, some models, including the new CPC+ initiative, provides up-front payments to facilitate the acquisition of technology and hiring of support staff, thereby easing some of the financial burden.

If your practice has not yet considered the impact of the 2017 changes and implementation of the QPP, or if you need help deciding whether the MIPS or APMs option is best for your practice, please reach out to Nixon Law Group.



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