MACRA and the Quality Payment Program

1. May 17, 2017
Aaron Elias
Consulting Senior
HEALTHCARE PAYMENT TRANSFORMATION
MACRA and the Quality Payment Program

2. Prepared for KYSCPA Health Care Conference Page 1
Agenda
1
2
3
Introduction to MACRA and the Quality Payment Program (QPP)
Advanced Alternative Payment Models (APMs)
Merit-Based Incentive Payment System (MIPS)
4 Strategic Considerations for QPP

3. MACRA and the QPP

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Value-Based Reimbursement
FEE-FOR-SERVICE
(FFS) PAYMENTS
POPULATION-BASED
APMs
ADJUSTED FFS
PAYMENTS
APMs INCORPORATING
FFS PAYMENTS
$
$
Bank
A Pay for
Reporting
B Pay for
Performance
C Pay/Penalty
for
Performance
A Total Cost of
Care Shared
Savings
B Total Cost of
Care Shared
Risk
C Retrospective
Bundled
Payment
D Prospective
Bundled
Payment
A Condition-Specific
Population-
Based
Payments
B Primary Care
Population-
Based
Payments
C Comprehensive
Population-
Based
Payments
A Traditional FFS
B Infrastructure
Incentives
C Care
Management
Payments

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CMS VBR Goals*
By December 31, 2016: By December 31, 2018:
85% of Medicare fee-
for-service payments
tied to scores
on quality and
efficiency measures
30% of traditional
Medicare payments
through APMs
90% of Medicare fee-
for-service payments
tied to scores
on quality and
efficiency measures
50% of traditional
Medicare payments
through APMs
*The new administration and leadership of HHS may set new goals for CMS going forward,
however, MACRA and value-based reimbursement generally has strong bipartisan support.

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New Framework for Physician Payments
APMs MIPS
QPP
Medicare Access and CHIP Reauthorization Act of 2015
CMS Goal: Adjusted FFS Payments CMS Goal: APMs Incorporating FFS Payments 

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Transition Period
Through
December 31, 2018
Starting
January 1, 2019
 0.5% annual Medicare Physician Fee
Schedule (MPFS) update (2016-2019)
 Payment adjustments
• Potential 2% PQRS reporting penalty
• Potential 3% EHR meaningful use penalty
• Up to +/- 4% Value-Based Modifier
bonus/penalty
 Annual MPFS update:
• 0% in 2020 through 2025
• 0.25% thereafter (0.75% for Advanced
APM participants)
 Payment Adjustments
• 5% bonus for participation in advanced
APMs thru 2024
• Up to +/- 9% MIPS bonus/penalty

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Years 1 and 2 Years 3+
Physicians (MD/DO, DPM, OD, DC, DMD/DDS)
PAs, APRNs, CNSs, CRNA
Physical or occupational therapists, speech-
language pathologists, audiologists, nurse
midwives, clinical social workers, clinical
psychologists, dieticians/nutritional
professionals
Eligible Clinicians

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QPP By the Numbers
Quality Payment Program Participation
All Medicare Clinicians 1,380,209
Qualifying APM Participants 70,000 – 120,000
Ineligible Clinician Types 199,308
Newly Enrolled Clinicians 85,268
Low-Volume Clinicians 383,514
Total Excluded Clinicians from MIPS 738,090 – 788,090
Total MIPS Participating Clinicians 592,119 – 642,119

10. Advanced APMs

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Advanced APMs
1
2
3
Track quality performance
Use certified electronic health
records (EHRs)
Providers bear nominal financial risk
Three Criteria for Advanced APMs:
Current Medicare Advanced
APMs
Medicare Shared Savings Program
(Tracks 2 & 3 Only)
Next Generation Accountable Care
Organization Model
Comprehensive End-Stage Renal
Disease Care
(LDO arrangement and Two-Sided Risk)
Comprehensive Primary Care Plus
Oncology Care Model
(Two-Sided Risk)
… more on the way

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Qualifying Participant
Qualifying Participant
 Higher % of patients or payments
 Bonus = 5% of MPFS payments
Partial Qualifying Participant
 Lower % of patients or payments
 No bonus, no MIPS
Non-Qualifying Participant
 Subject to MIPS
Payment Year 2019 2020 2021 2022 2023 2024
QP Threshold 25% 25% 50% 50% 75% 75%
Partial QP Threshold 20% 20% 40% 40% 50% 50%
Payment Year 2019 2020 2021 2022 2023 2024
QP Threshold 25% 25% 50% 50% 75% 75%
Partial QP Threshold 20% 20% 40% 40% 50% 50%
Medicare Option – Payment Amount Threshold
Medicare Option – Patient Count Threshold

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Other Payer Advanced APMs
 Credit for participation in Other Payer Advanced APMs starting in 2019
 Three criteria: (1) Use of CEHRT; (2) Quality measures; and (3) More than
nominal financial risk or medical home model
 Submission and approval process
Payment Year 2019 2020 2021 2022 2023 2024
MCR MCR Total MCR Total MCR Total MCR Total MCR
QP Threshold - - 50% 25% 50% 25% 75% 25% 75% 25%
Partial QP Threshold - - 40% 20% 40% 20% 50% 20% 50% 20%
Payment Year 2019 2020 2021 2022 2023 2024
MCR MCR Total MCR Total MCR Total MCR Total MCR
QP Threshold - - 35% 20% 35% 20% 50% 20% 50% 20%
Partial QP Threshold - - 25% 10% 25% 10% 35% 10% 35% 10%
All Payer Combination Option – Payment Amount Threshold
All Payer Combination Option – Patient Count Threshold

14. MIPS

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MIPS Final Score Components
−Report quality
measures
−Scored based on
relative
performance
−“Practice
transformation”
−Drive patient-
centered care
−Promote
expanded
adoption of
EHRs
−Improve
utilization and
sharing of
electronic health
information
−Drive efficient
care
−Providers forced
to accept risk
Quality Cost Performance
Improvement
Activities
Advancing Care
Information

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MIPS Final Score Components
Quality Cost Performance
Improvement
Activities
Advancing Care
Information
2017 Performance Year 2018 Performance Year 2019 Performance Year
Impacts 2019 Payments Impacts 2020 Payments Impacts 2021 Payments
60% 50% 30%
15%
15%
15%
25%
25%
25%
10%
30%
2017 2018 2019
Quality
IA
ACI
Cost Cost
IA
IA
Quality Quality
ACI
ACI

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2017 Final Score Calculation
Multiply Each By
Component Weight
Final
Score
Quality Cost Performance
Improvement
Activities
Advancing Care
Information

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MIPS Payment Adjustments
2019 2022
(and beyond)
2020 2021
+4%
-4%
+5%
-5%
+7%
-7%
+9%
-9%
Up to 12% Scaling Factor
Up to 15% Scaling Factor
Up to 21% Scaling Factor
Up to 27% Scaling Factor
Performance
Threshold*
*Performance Threshold will change each year
Additional $500 million pool
available for top performers

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March 31, 2018
Deadline for
individual/group to
report on required
measures
Performance-To-Adjustment Cycle
Perform Submit AdjustFeedback
CY 2017
Period of time for
which performance
will be evaluated
2017 only: may
elect 90-day
continuous
performance period
Q3 2018
CMS reports on
prior year
performance,
including
calculation of Final
Score and payment
adjustment for
upcoming year
CY 2019
Positive or negative
MPFS payment
adjustments based
on 2017 Final Score

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MIPS Participation Election
 Final Score assigned to each NPI/TIN
 Group reporting must include all NPIs who reassign to
TIN; cannot pick and choose
 NPI who reassigns to TIN reporting as a group may
also report individually; CMS applies higher Final
Score

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Low-Volume Threshold
 For 2017, individual or group exempt from MIPS if:
 $30,000 or less in allowable Part B charges; or
 Bill for services for 100 or fewer traditional Medicare
beneficiaries
 If elect group reporting, NPIs who would be exempt
if reporting individually are NOT exempt
 Two determination periods (both with 60-day claims
run-out)
 September 1, 2015, to August 31, 2016
 September 1, 2016, to August 31, 2017

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2017: Pick Your Pace
2017 Reporting Option 2019 Payment Impact
No reporting
4% penalty on all MPFS payments
Report performance for minimum of 90-day continuous
period
 One quality measure OR
 One clinical practice improvement activity OR
 All required measures for advancing care information
No penalty, no bonus
Report performance for minimum of 90-day continuous
period
 More than one quality measure OR
 More than one clinical practice improvement activity OR
 More than the required measures for advancing care
information
Eligible for up to 12% bonus on all MPFS payments (amount
varies based on Final Score and budget-neutral scaling factor)
Report performances on all required measures for minimum
of 90-day continuous period
Eligible for up to 12% bonus on all MPFS payments (amount
varies based on CPS and budget-neutral scaling factor)
If CPS ≥ 70, eligible for additional Exceptional Performance
Bonus (amount varies based on Final Score and distribution of
$500-million annual fund; cannot exceed 10% of Part B allowed
charges)

23. Strategic Considerations for the QPP

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CMS Estimates for 2019
Financial Impact of QPP Amount
Estimated Increased Payments from Federal
Government to Providers
MIPS Higher Performer Payment Adjustments $199 million
Exceptional Performance (MIPS) $500 million
APM Incentive Payments $333-$571 million
Estimated Decreased Payments from Federal
Government to Providers
MIPS Lower Performance Payment Adjustments $199 million

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Estimated Penalties and Bonuses
 From Proposed Rule:
 Original estimates that
87% of solo providers
were expected to
receive a negative
payment adjustment
under MIPS
 On the contrary, 81% of
providers in groups of
100+ were expected to
receive an upward
payment adjustment
 From Final Rule:
 Only 10% of solo
providers are expected
to receive a negative
payment adjustment
under MIPS in 2019
 Still, 98.5% of providers
in groups of 100+ are
expected to receive a
neutral or upward
payment adjustment in
2019
Changes to Final Rule Improved Outlook for Small Groups

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New Reasons to Collaborate
 Many independent physicians in small practices feel pressure
to consolidate or join larger group
 Employment, affiliation, clinical integration are options
 Reasons:
 Access to EHR
 Shared risk
 Economies of scale for reporting
 Improved negotiation position

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Are There Alternatives?
 Per MACRA, $100M in financial support for small practices
 Virtual groups coming
 Easier requirements in some MIPS components for small
groups of less than 15 providers
 Will small groups consider no longer accepting Medicare
patients?

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 Individual profile pages
 Participation in APM
 Final Score
 Component scores
Public Information on Physician Compare
 Aggregate data
 Range of Final Scores and component
scores

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Implications of Public Availability
Patient Decisions
• How will patients use this
information to make
decisions about
healthcare?
Provider Decisions
• How will providers change
their referral patterns?
• High-cost providers left
out?
Pressure on
Providers

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Commercial Payers
Performance Scores Easily Replicated

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The Role of CMS
 Remember, CMS is partly the messenger
 Congress would have to change the following elements of MACRA:
 Timing of payment adjustments
 MIPS category weights
 Types of clinicians subject to requirements
 “More than nominal risk”
 Range of penalties and bonuses
 Future CMS rulemaking may alter timing, component
requirements, etc.

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Action Items
 Group vs. individual reporting
 Quality measure selection and corresponding performance
improvement
 Improvement activities selection and execution
 “Meaningful Use”
 Reporting mechanism
 Preparation for cost performance measures
 Future APM participation

33. Aaron Elias
aelias@pyapc.com
404-266-9876
Questions?
Contact Information:

34. PERSHING YOAKLEY & ASSOCIATES, P.C.
800.270.9629 | www.pyapc.com