On October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) released the final rules for the implementation of the key components of the Medicare Access and CHIP Reauthorization Act (MACRA), including details of how physician groups will participate in the Quality Payment Program (QPP). The final rule describes the details of the two tracks available for physicians: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs). The overall purpose of both QPP tracks is to use physician compensation to drive the shift of the US healthcare system from the current fee-for-service model, toward a value-based payment system that rewards coordinated, efficient, patient centered, high-quality care. While CMS expects that most physicians will participate in the MIPS in 2017, the clear intention of the final rules is to promote participation in APMs over time through financial incentives.
The MIPS, which is based on the PQRS/VM and Meaningful Use programs, consists of four major components: Quality, Costs, Clinical Practice Improvement Activities (CPIA or Improvement Activities), and Advancing Care Information. Groups will report performance data in a similar manner as they did for PQRS/VM reporting, however submitting data through a Qualified Clinical Data Registry (QCDR) is the preferred method and provides the best opportunity for successful reporting. CMS will then assign individual providers a composite score of zero to 100 based on performance in these categories. Providers that score above a threshold of three points will be eligible for a positive payment adjustment (bonus) and those that score approximately 70 points can earn an additional exceptional performance bonus.
CMS has designated 2017 as a transition year for MIPS to allow physician groups to improve their ability to capture and report quality data. This year is intended to help physicians develop the infrastructure for quality reporting with minimal chance of penalties, but CMS has indicated that the threshold for avoiding negative payment adjustments will increase in subsequent years. During the transition period, groups may choose from four options to participate in the MIPS track of the QPP:
- Don’t participate and receive a negative 4% payment adjustment (penalty).
- Test the system by submitting less than 90 days of data to avoid a downward payment adjustment (penalty)
- Report at least 90 days of data to be eligible to earn a neutral or small positive payment adjustment (bonus).
- Report a complete data set for an entire year to be eligible to receive a larger payment adjustment (bonus).
Failure to participate for MIPS eligible clinicians will result in an automatic 4% negative payment adjustment. Because physicians may not yet be engaged with their healthcare systems in meaningful ways to decrease the costs of care that they provide, CMS has decided to make the weight of the Cost category 0% for the first year. CMS has also decided that non-patient facing clinicians, which may include anesthesia providers, can choose not to participate in the Advancing Care Information category and will, therefore, have a reduced reporting requirement.
An alternative to physicians in the Quality Payment Program is participation in an Advanced Alternative Payment Model (APMs). APMs are models of clinical care and reimbursement that incentivize quality and efficiency of care rather than just volume of care by tying financial incentives to quality and cost performance. There are two basic types of APMs recognized under MACRA: Advanced APMS and MIPS APMs.
Physicians and physician groups who participate in a significant way in Advanced APMs can opt out of participation in MIPS (thus avoiding potential negative payment adjustments). They are eligible for a greater financial reward than most MIPS participants of up to a 5% lump sum bonus. They will also receive a higher physician fee schedule update starting in 2026.
The models that are defined by MACRA as Advanced APMS must meet three requirements. First, participants must use certified EHR technology. Second, there must be payment for professional services based on quality measures that are comparable to those used in MIPS. Last, participants must bear more than a nominal amount of financial risk. The requirement of bearing financial risk means that the APM must withhold or reduce payments for services if the actual expenditures exceed the expected expenditures. The total amount of risk that is considered more than nominal must be at least 8% of the total Medicare revenues or 3% of the expected expenditures.
For 2017, the models that are considered Advanced APMs are:
- Comprehensive ESRD Care Model
- Comprehensive Primary Care Plus (CPC+)
- Medicare Shared Savings Program (MSSP), Track 2 and 3
- Next Generation ACO Model
- Oncology Care Model (OCM)
In 2018, CMS anticipates adding other models to the list of Advanced APMs, such as:
- Comprehensive Care for Joint Replacement (CJR)
- Advancing Care Coordination through Episode Payment Models Track 1
- ACO Track 1+
- New Voluntary Bundled Payment Model
MACRA also establishes the Physician-Focused Payment Model Technical Advisory Committee (PTAC), which will review and assess proposals for payment models to be considered as Advanced APMs.
Not every physician who participates in an Advanced APM will be considered a qualified participant. CMS will classify physicians and physician groups who participate in Advanced APMs as either Qualifying APM Participants (QPs) or Partially-Qualifying Participants (Partial QPs) based on either percent of Medicare payments that they receive through the APM or the percent of CMS beneficiaries that receive services through the APM.
For 2017, the threshold for QPs is 25% of payments or 20% of patients. The threshold for Partial QPs is 20% of payments and 10% of patients. These thresholds are scheduled to increase annually. While partial QPs are not elligible for the 5% bonus, they have the benefit of deciding on whether or not to participate in MIPS, and thus could be insulated from potential negative payment adjustments.
Partially Qualifying Participants
Some physicians will participate in APMs that do not qualify as Advanced APMs, or they may participate in Advanced APMs but fail to meet the threshold to be either a QP or a Partial QP. CMS recognizes that many practices need an interim step from traditional fee-for-service toward APM participation and has labeled these providers as MIPS APM participants.
To be considered a MIPS APM, an APM must meet three criteria:
- The APM must have an agreement with CMS.
- The APM must include MIPS eligible clinicians.
- The APM must base payment incentives on cost and quality performance.
Unlike Advanced APMS, there is no risk requirement, so programs such as MSSP Track 1 and CJR would both qualify. MIPS APM clinicians will still report under the MIPS, but may benefit from several APM-specific rewards built into MIPS to incentivize movement toward value-based care.
Rather than being scored under the standard weight for the four categories, participants in MIPS APMs receive special scoring under the “APM scoring standard”. This reweights the quality and cost category to “0” and increases the CPIA weight to 25% and the Advancing Care Information to 75%. The rationale for this adjustment is that participants in a MIPS APM are already required to report quality and cost metrics to the APM entity and, therefore, should have incentive payments based on performance as additional reporting to CMS would be redundant and potentially burdensome. Additionally, CMS will also assign a full score of 40 points in the CPIA category to participants in MIPS APMs. Therefore, groups participating in a MIPS APM may not need to submit additional improvement activity information.
CMS has identified several APM models that, while not Advanced APMs, could qualify as a MIPS APM, including:
- Comprehensive ESRD Care (CEC) Model, One-sided Risk Model
- Medicare Shared Savings Program (MSSP), Track 1
- Advancing Care Coordination through Episode Payment Models Track 1 and Track 2
- Medicare ACO Track 1+
- Medicare Diabetes Prevention Program
- Cardiac Rehabilitation (CR) Incentive Payment Model
- Comprehensive Care for Joint Replacement (CJR)
Participating in APMs for Anesthesiology
The intent of the Quality Payment Program under MACRA is to move healthcare from a volume-driven to a value-driven system. The MIPS track is designed to encourage healthcare providers to make the initial investment into quality data collection and reporting without dramatically changing how they practice medicine. However, MIPS is intended to be a transition to paying for value. The ultimate goal is to move healthcare into Alternative Payment Models that require accountability for both the cost and the quality of the care provided.
There are three major hurdles that anesthesia groups must overcome in order to make this transition and be prepared to participate in an APM. First, like much of the Quality Payment Program, APMs are targeted mostly toward primary care providers. As a hospital-based specialty, anesthesiology does not have an easy interface to facilitate participating in Advanced APMs where the cost of care is linked to beneficiaries assigned to participating providers.
The second challenge for anesthesia practices is that many groups are struggling to develop processes for quality data collection and reporting. These groups will initially participate in MIPS but will face increasing financial pressure to move toward an APM, both as a result of potential negative payment adjustments and from competition from groups that are APM participants.
Finally, many anesthesia practices are independent of healthcare systems and provide care as a contracted service. Although APMs have a variety of structures, one commonality they have is that they are multi-disciplinary and coordinated within a healthcare system. Anesthesiologists who are not directly employed by a healthcare system that participates in an Advanced APM may find it more difficult to achieve Qualified Participant status.
Most anesthesia groups will not have the opportunity to participate in an Advanced APM in 2017 and will fall under MIPS scoring. Their first strategy should be to maximize their participation in quality data collection and reporting in order to achieve the highest MIPS score possible and potentially earn a positive payment adjustment (bonus). For groups that have not been successful in reporting data to CMS under the PQRS/VM program, 2017 should be a transition year for developing internal processes for data collection and submission. These groups should explore the option of data submission through one of several available anesthesia-specific QCDRs.
Second, anesthesia leadership should begin to create internal processes for quality improvement, ideally utilizing the quality data collected for submission to CMS. Being able to monitor process and outcome data allows anesthesia groups to engage with their healthcare system with quality improvement. This can increase the value of a group to a healthcare system when discussing how to transition to payment-for-value programs such as bundled payments.
Third, anesthesia groups should explore the possibility of partnerships in their healthcare system that would allow participation in an Advanced APM. There may be Advanced APM models that are already functioning within a group’s market space, or they may be in the process of development.
Finally, anesthesia groups should take advantage of opportunities for participation in other APMs, especially surgery-focused models such as the Comprehensive Care for Joint Replacement (CJR). Even if a group is unable to participate in a MIPS APM, participation in bundled payment models will improve the group’s leverage in determining their share of compensation, increase their skills with data collection and knowledge of how to begin their participation in value-based care.