The document provides an overview of MACRA's Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs), including compliance and strategic considerations. It discusses that MACRA aims to improve care quality, outcomes and value while preserving independent practice. Clinicians can succeed under MIPS or participate in APMs, with various reporting options and timelines outlined. Compliance and operational impacts are significant. Strategic planning is important to optimize performance and position for future payment models.
Understanding MACRA's Strategic and Compliance Considerations
1. Understanding MACRA’s Strategic and
Compliance Considerations
May 25, 2017
Bruce A. Johnson, Shareholder
Cybil G. Roehrenbeck, Counsel
Marissa R. Urban, Associate
2. Agenda
MACRA Payment Reform
– Merit-Based Incentive Payment System (MIPS)
– Alternative Payment Models (APM)
Compliance and operational considerations
Strategic considerations, options and ideas
Q&A
2
3. Health Care in 2017
“Volume to Value” migration
Payment system change and pressure
– MACRA – “zero sum” MIPS; risk-based APMs
– Financial and strategic implications of MACRA timeline
Coverage – Medicaid expansion
– Affordable Care Act uncertainty
– Expansion realities
Themes:
– Patients – Access to care
– Public and private sector payors – Improve quality, reduce cost and
assume risk . . . with fewer resources and greater uncertainty
3
4. MACRA Overview
4
Medicare Access and CHIP Reauthorization Act of 2015
– Bipartisan legislation enacted April 16, 2015
CMS Quality Payment Program focused on value/outcomes:
– Merit-based Incentive Payment System (MIPS)
– Alternative Payment Models (APMs)
– Final Rule Published November 4, 2016
– Anticipation of 2018 Rule – any day!
HHS Secretary Tom Price – Voted for legislation; expressed concerns
regarding implementation burden
5. MACRA Goals and Major Changes
Improve care, produce better outcomes, decrease burden and
preserve independent practice
Encourage alternative payment models that align incentives
across healthcare stakeholders
Advance delivery system reform by unifying legacy programs
Major Changes:
– Repeal Sustainable Growth Rate
– Modify/consolidate Medicare quality programs
– Apply value-based payment to traditional Medicare FFS
– Align Medicare FFS with commercial and Medicaid
– Migrate to risk
5
7. MACRA Overview -- Merit-Based Incentive
Payment System (MIPS)
MIPS is default payment system applicable to “MIPS eligible clinicians”
– Physicians, PAs, NPs, CNSs, CRNAs, and groups including such
clinicians who bill Medicare Part B – unless excluded in 2019
– CMS can add others through rulemaking in 2021 (PT, OT, Speech)
MIPS exclusions during applicable performance year
– Not required to report:
• Low-volume threshold clinicians (billing < $30,000 or < 100
beneficiaries during performance period) including “non-patient-
facing MIPS eligible clinicians”
• Newly-enrolled Medicare participants
• CMS notification letters to exempt clinicians (approx. 800k)
– Not subject to MIPS payment adjustments:
• Qualifying Advanced APM participants
7
8. MACRA Overview -- MIPS
Reporting Options
8
No
Excluded clinicians may
“Voluntarily Report” to
gain experience with
MIPS
MIPS Eligible
Clinicians
• Individual or
• Group Reporting
MIPS Eligible
Clinician?
(Yes or No)
Yes
• Health IT vendor
• Qualified Registry
• Qualified Clinical Data
Registry
• CMS Approved Survey
vendors
• Claims-based
• Administrative claims
(limited)
• CMS web-interface
(Groups of 25+)
Either Group Only
APM
APM-Specific Reporting
requirements (e.g., MSSP
or other)
APM?
2017 Performance Year Reporting:
• MIPS reporting period through
Dec. 31, 2017
• Data submission period generally
Jan. 2, 2018 through March 31,
2018
• Oct. 2, 2017 (last day to start 90
day reporting period)
9. MACRA Overview -- MIPS
Categories and Methodology
9
Quality
60%^
Advancing Care
Information
25%^
Clinical Practice
Improvement Activities
15%^
Resource Use 0%^
Performance Year 2017
“MIPS Score”
and
“Adjustment
Factor” used
to Determine
Medicare FFS
Payment
Adjustment
-4%*
Neutral
Neutral
+ 4% (subject
to budget
neutrality)*
2019 Payment
^Weights change annually
*Adjustments change annually: 2019 = 4%; 2020 = 5%;
2021 = 7%; 2022+ = 9%
Example: 99213 adjusted from $75.85 to $72.82 (-4%)
10. MACRA Overview -- 2017 “Pick
Your Pace” MIPS Transition
10
•One quality measure, or one improvement activity, or meet
base ACI requirements
•No penalty, but no payment incentive
Minimum -- Report
“Some” Data
•Report on at least 90 days of data for more than one quality
measure, more than one improvement activity or meet base
ACI requirements and at least one additional measure
•No penalty, and potential incentive (not guaranteed)
Partial - Report
Minimum Required
Data
•Report data on at least 90 days of 6 quality measures
(including one outcome); high and medium weight
improvement activity; and base ACI plus additional measures
•Maximizes opportunity for incentive payment
Full -- Report All
Required Data (At
least 90 days)
Fail to report one MIPS measure or
activity
Maximum -4% MIPS payment
adjustment in 2019
11. MACRA Overview -- Advanced APM
11
This track moves Medicare away from FFS and closer to a system tying
payment to patient outcomes and population health and episodes of care
Lump-sum 5% bonus payment for
Base Year Part B professional
services.
Exemption from MIPS reporting and
payment adjustments
Higher Medicare Physician Fee
Schedule base rates beginning in
2026 (+.75% for APMs; +.25% MIPS)
ADVANCED
APM
INCENTIVES
12. MACRA Overview -- Advanced
APM Requirements
Advanced APM requirements:
1. Use Certified EHR technology (CEHRT)
2. Professional service payments linked to quality measures
3. APM must bear financial risk or involve a medical home model (e.g., MSSP
ACO, Track 2 or 3, NextGen ACO, CPC+ etc.), with other payers in 2021.
4. Payment or patient count thresholds assigned to particular year
^Additional “All Payer Combination” Options begin in 2021 with minimum Medicare (MC) Portion
each year
12
Threshold
Payment Year
2019-2020
Payment Year
2021-2022^
Payment Year
2023 +
Medicare Only Payment 25% 50% 75%
Medicare Only Patient 20% 35% 50%
All Payer Combination Payment NA 50% + 25% MC^ 75% + 25% MC^
All Payer Combination Patient NA 35% + 20% MC^ 50% + 20% MC^
14. MIPS Compliance Considerations
Significant practice operational implications based on MACRA,
including importance of CEHRT to success
Selection and reporting of quality and other metrics
– Individual vs. group reporting
– Provider performance, attestation and audit process
Aligning practice operations with quality attestations
Timelines to achieve strategic goals (i.e., optimize performance)
“Traditional” Medicare compliance concerns (e.g., False Claims Act,
attestation, fraud and abuse, etc.)
Implications for physician and other provider compensation
14
15. APMs – Subject to multiple regulatory regimes
– MACRA (including MIPS compliance if fail to qualify as “Advanced
APM”)
– Traditional Medicare fee for service requirements and APM
variations (e.g., post-acute services)
– Each APM has its own complex regulatory compliance requirements
(and potential pitfalls)
APM fraud and abuse waivers (and potential loss of waivers)
– General or model-specific waivers under applicable APM program
– Enforcement currently unclear
APM Compliance Considerations
15
16. APM Compliance Considerations
Medicare Shared Savings Program Fraud and Abuse Waivers
– Extensive laws, regulatory language, Federal Register commentary,
and sub-regulatory guidance
– 10 year document retention requirements
– “Self-implementing” by ACO governing body determination that
arrangement is “reasonably related to the purposes of the Shared
Savings Program”
– Pre-participation and Participation waivers
– Board fiduciary duties and obligations
Center for Medicare & Medicaid Innovation (CMMI) APMs
– ESRD, Oncology Care Model and other program-specific waivers
– Narrow /limited waiver scope, with CMS definitions
16
17. MACRA Operational/
Contractual Implications
Considerations for provider compensation policies
– Linkage of compensation to individual/group performance?
– Employee receipt of earned upside compensation and limits?
– Fraud and abuse waivers vs. employer entity policies?
Employed physician (and other provider) contracts and renewal terms
– “Best efforts” in public and private value-based arrangements
(MACRA, MIPS, APM etc.)
– Individual vs. group reporting and measurement
– Representations/warranties and attestations
Linking MACRA payment adjustments to provider compensation
– Adjusting existing plans and/or planning for new
17
18. The Incentive Conundrum
Internal Compensation
Model (Prof. Svs)
Consideration of
Practice Costs
Primary Incentive/
What’s Rewarded
Works Best With
External Payment
Model
• $ wRVU
• % Prof. Colls
None FFS production FFS
• $wRVU + Quality Metrics None FFS /some quality FFS w/ value-based
• % Prof. Colls + Quality &
Financial Surplus
Possible (surplus) FFS, quality and cost
(possible)
FFS w/ limited risk and
value-based
• Hourly None Hours worked FFS, risk (with uncertain
patient volume)
• Revenues - Expense (private
practice and virtual private
practice models)
• Base + Incentive
Possible (surplus) FFS, quality, cost and
performance under risk
FFS and risk
18
Observation: Few incentive models directly “align” provider incentives with external
payment models by focusing provider attention on practice cost (operational and
medical), financial success, quality and other “at-risk” success variables
19. MACRA Employed Physician
Compensation Implications
Lag time issues
– MIPS and APM performance year is 2 years prior to payment year
• Existing employees
• New hires (with legacy performance that follows them)
• Acquisition due diligence and post-acquisition comp plan
MIPS/APM +/- and FMV requirements (Stark, AKS etc.)
Valuation and FMV considerations
– External surveys lag 1+ years
– In-exact – personally performed, wRVU modifiers etc.
– “Personal performance” under value-based arrangements
19
21. MACRA Goals and Changes
Improve care, produce better outcomes, decrease burden and
preserve independent practice
Encourage adoption of Alternative Payment Models that align
incentives across healthcare stakeholders
Major Changes:
– Replace Sustainable Growth Rate with financial carrots and
sticks
– Apply value-based payment to traditional Medicare FFS
– Align Medicare FFS with commercial and Medicaid
– Migrate to and succeed under at-risk arrangements (APM)
21
22. Strategy
22
strat·e·gy
noun
A plan of action or policy designed to achieve a major or overall aim
A careful plan or method for achieving a particular goal usually over a
long period of time
MACRA strategy
Goals and current position will influence available options and
strategies
MACRA timelines and requirements are critical to strategic decision-
making
23. Current Position, Options and
Strategic Considerations
23
Independent
Practice
Physician
Network
Health Systems
(Hospitals and
Other)
CIN/ACO/Multi-
Provider Network
24. Independent Practice Options
Goals
– Preserve independence and autonomy
– Position for financial success
Options/considerations
– MIPS track – “zero sum” in 2017 and future
– APM track – specialty and partnering strategy
• Primary care – Medical home, CPC+ and ACOs
• Specialist – Disease specific episodes or population health
• Multispecialty – Combined models
– Success variables
• Initiatives
• CEHRT and other resources
• Business model alignment with value-based care
24
25. Independent Practice – Potential Roadmap
2017 – Succeed under MIPS
– Report “some” data (to avoid penalty)
– Report data for 90 days (commence reporting by October 2, 2017) to be
eligible for incentive payments
– Examine broader APM and/or Advanced APM participation strategies
– Consider participation in APM or Advanced APM
• Costs and benefits of APM participation and reporting
• MIPS APMs subject to MIPS APM reporting standard
• AAPMs exempt from MIPS
• Program participation deadlines
Plan for strategic reporting under MIPS in 2018
– Assess practice to identify problematic performance areas
– Select measures that will result in greatest incentives
• Avoid “topped-out” measures
25
26. Physician Network Options
Examples -- IPAs, MSOs, MCOs etc.
Goals -- Support participating practice success; maintain relevance
Options/considerations
– MIPS track
• Support participating practice performance education and guidance
• Infrastructure development and deployment – CEHRT, population health
and other
– APM track
• Migrate to APM
• Support participants or others (i.e., ACO, CIN, etc.)
– Success variables
• Existing care management and other managed care “know
how”
• Financial and other resources
26
27. Health System Strategies
(Hospital and Other)
Examples – Sole/multi-hospital health systems, for-profit practice
models (private equity and other)
2017 – Internal focus:
– MIPS – avoid penalty; pursue broader incentive (90 day reporting)
– Internal – Consider provider contract and compensation strategy
• Participation requirements – individual and group reporting
• Compensation model -- Incremental or major overhaul
– Plan for MIPS reporting in 2018 – address weaknesses, plan for
future success
2017 and 2018 – External focus:
– Map out longer-term MIPS vs. APM participation strategy
– Create vs. partner considerations
– APM participation and other timelines
27
28. 2018 -- Critical To Long Term Strategy
MACRA Performance Year 2017 2018 2019 2020 2021 2022 2023 2024
MACRA Payment Year 2019 2020 2021 2022 2023 2024 2025 2026
Medicare Physician Fee
Schedule Updates
0.5% 0% 0% 0% 0% 0% 0% 0.75% or 0.25%
MIPS
• Quality
• Resource use
• Improvement activities
• Adv. Care Info/CEHRT
+/-4% +/-5% +/-7% +/-9% +/-9% +/-9% +/-9% +/-9%
Advanced Alternative Payment
Models (APMs)
• Medicare Payment Threshold 25% 25% 50% 50% 75% 75% 75% 75%
• Medicare Patient Ct. Threshold 20% 20% 35% 35% 50% 50% 50% 50%
• All Payer Payment 50%+25% MC 75%+25% MC 75%+25% MC
• All Payer Patient Count 35%+20% MC 50%+20% MC 50%+20% MC
Excluded from MIPS
Source: Medicare Access and CHIP Reauthorization Act of 2015, Path to Value (CMS) 28
29. Timeline Considerations
Key MACRA Milestones
– May 31, 2017 – MSSP ACO participation notice of intent deadline
– July 31, 2017 – MSSP ACO applications and participation lists
– October 2, 2017 -- MIPS 90 day reporting requirements
– January – Beginning of APM and MIPS performance years
Other Key Milestones and Considerations
– Self-insured benefit plan contracting and open enrollment timelines
– Physician Focused Payment Model
– Federal and State policy strategies (Medicaid)
– Other
29
2017 2018 2019
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
May 25, 2017
30. MACRA Physician Focused
Payment Models
Newly created APM models
– Must include Medicare as a payer
– Eligible clinician participants must play core role in implementing the APM
payment methodology
– Must target quality and costs of services that eligible clinicians provide,
order, or significantly influence
Creation process
– Physician-Focused Payment Model Technical Advisory Committee (PTAC)
recommends testing based on priorities and various resources
– Should broaden or expand CMS APM portfolio
Practical Considerations
– May include non-Medicare payers and non-physician eligible clinicians
– No specific process established for PTAC review
– Generally, CMS requires 18 months to develop an APM
30
32. APM Trends and Lessons
APM strategies require time, resources and focused attention
Participant engagement is enhanced through meaningful initiatives, with
data, feedback and payment opportunities
“Value proposition” of a long term strategy extends beyond short term
financial opportunity
– Access to data and other resources to drive learning and change
– MSSP ACOs – “deemed” clinical integration (commercial
arrangements)
– Fraud and abuse waivers
– Experience, “know how” and value-based cultural development
Focus resources and coordinate potentially conflicting initiatives
Lay foundation, while recognizing the need to adjust and change
Time is of the essence (2018 is important)
32
33. Example: Multi-Facility Health System
Strategy
Focus: “Jump start” strategy through early access to data, options and
other “wins” that can enhance value proposition
33
2017 2018 2019
• Participate in existing or new
MSSP ACO during 2018
• Access MSSP Waivers/options
• Assess/plan for coordination
of internal initiatives (e.g., co-
management arrangements)
• Plan for outreach, public policy
and other engagement to
support all payor APM
• ACO participation, data,
financial, MSSP waiver and
other opportunities
• Deploy systems in regional
or state-wide CIN/ACO
• Position for payor
engagement in 2019
• Use CIN/ACO as “hub” for all
value-based arrangements
• Implement public policy and
engagement strategies
• Private/public payor contracts
(shared savings and other)
• Refine and expand
implementation of CIN/ACO
and related infrastructure
• Align internal (health system-
driven) initiatives in support
of value-based arrangements
34. Illustration: Combined APM Models
CIN/MSSP ACO
Hospital
Payer (e.g.,
commercial and/or
self-insured)
CMS
Oncology Care Model
(Advanced Payment Model)
Med. Onc.Multispecialty
Medical Group
Other Physicians
(e.g., Breast
Surgeons, Rad Onc,
Urology)
Post-Acute
Network
Care Coord. Quality Committee Tech/Pop. Health
Participation Agreements
Oncology Care Collaborative
Key Features: Oncology Care
Collaborative
• Multispecialty platform
• Access CIN/MSSP
systems/technology
• Population health
infrastructure
• Fraud and abuse waivers
depending on program
• Dual participation strategy
(MSSP and OCM), but with
greater alignment across
continuum of care
34
35. Select Advanced APM Models 2018
35
Possible Advanced
APM Model
Single/
Multi-specialty
focus
Elective/
Mandatory
Structure – Use of
Existing or
Separate Entity
Participation TIN
Exclusivity or
Multiple/ Overlap
APM Allowed
Fraud & Abuse
Waivers/ Rules
MSSP (track 1+, 2 &
3) NextGen ACO
Multi-specialty
(PCP leadership)
Elective Separate entity TIN Exclusive to
ACO
Rule - Self-
implementing
(Board defined)
Comp. PCP+ (CPC+)
(Medical Home)
Single Specialty
(PCP)
Elective Existing Multiple APM/
Overlap Allowed
CMMI defined
Oncology Care
Model (2 side risk)
Single specialty –
Hem/Onc
Elective Existing Multiple APM/
Overlap allowed
CMMI defined
Comp. ESRD (2 side
risk)
Single – Neph Elective New Multiple APM/
Overlap Allowed
CMMI defined
CJR (CERHT)^ Single –Ortho Mandatory Existing Multiple APM/
Overlap Allowed
CMMI defined;
regulatory
Advancing Care
Coord Episode
Models (2018)^
Single – Ortho and
Cardiology
Mandatory Existing Overlap CMMI defined;
regulatory
^ Subject to regulatory delay etc.
36. CIN/ACO/Multi-Provider
Network Options
Example: MSSP Track 1 ACO, ending 2018 or 2019
Internal
– Participants report/evaluated under APM/ACO rules (MIPS APM
Standard)
External
– Strategic decision-making re Advanced APM/risk strategy (e.g.,
MSSP 1+, Track 2 or 3; NextGen)
– Potential “right sizing” of ACO participants in network (i.e., PCP
driven with select specialties)
– Plan/implement specialist engagement through other APM models
(Ortho, Cardiology, Oncology, etc.)
– Position for Advanced APM success with Medicare Advantage and
other at-risk programs to aggregate lives
– Consider external/regional/statewide partnering strategies
36
37. The Provider “Engagement”
Conundrum
Structural (“all in” models)
– Employment and Professional Services Agreements
Contractual (“part-way in” models)
– Co-management/medical leadership
– Clinically Integrated Network/ACO models
Potential “joint venture”(JV) models
– JV physician practice with health system linkage (APM or other)
– JV managed care organization (MCO) entity with at-risk
arrangements
– JV episode bundle organizations
Alternative financial and other incentive strategies
37
38. Dr.
Strategy: Joint Venture Physician Practice
Issue/Goal:
– Employed provider engagement in practice
– Maintain relationship, but promote greater autonomy, engagement
and accountability for practice performance
38
Mgmt. Services
CIN/ACO
Participation &
ContractingCIN/ACOPayor
Contracting
Dr.
MSO/Practice
Infrastructure
Ownership/ROI
Dr
.
Dr
.
JV Physician
Practice
Employment
Health System
FFS/At Risk
Contract $
39. Strategy: Joint Venture Managed Care
Organization
39
FFS
Contract $
Dr
.
Dr
.
NP
Management
Agreement
Dr
.
At Risk
Payor
Contract $
Dr
.
Ownership/ROI
Dr
.
JV Managed Care
Organization
Practice Entity
Health System/MSO
Issue/Goal:
– Engagement, migration to and success under at-risk APM and other
arrangements
HoldCo
40. Strategy: Joint Venture Episode of Care
Organization
40
Services
Agreement
Episode of
Care/Bundled
Contract $
Dr
.
Ownership/ROI
Dr
.
Professional
Services
Issue/Goal:
– Specialty physician engagement and success under episodes of care
Align operational, financial and other incentives
– Access infrastructure and coordinate existing initiatives
– ROI from investment and service relationships
HoldCo
JV Episode of Care/Bundle
Organization
Hospital
Facility
Services
ASC
Facility
Services
Post-Acute
/ Rehab
Services
Post-Acute
/ Rehab
Services
Service Relationship
CIN/ACO
Health System
41. Understanding MACRA’s Strategic and
Compliance Implications
Bipartisan solution to reimbursement problem
MIPS operational and compliance considerations in near term
APM longer-term strategic considerations
Keys to success:
– Near term actions impact long-term options
– Participant engagement through real initiatives with data, feedback
and payment opportunities
– Choose your partners carefully
– Lay foundation, but plan for adaptation and change
– Time is of the essence
41