March 17, 2017
Lori Foley, PrincipalAaron Elias, Consulting Senior
PAYMENT TRANSFORMATION AND HOW IT IMPACTS MLP INSURERS
The Changing Healthcare System and the Impact of MACRA
Page 2
Agenda
1
2
3
Introduction to MACRA and the Quality Payment Program (QPP)
Advanced Alternative Payment Models
Merit-Based Incentive Payment System
4 Implications for Malpractice Insurance Industry
MACRA and the QPP
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Value-Based Reimbursement
FEE-FOR-SERVICE(FFS) PAYMENTS
POPULATION-BASEDAPMs
ADJUSTED FFSPAYMENTS
APMs INCORPORATINGFFS PAYMENTS
$ $ $
Bank
A Pay For Reporting
B Pay For Performance
C Pay/PenaltyForPerformance
A Total Cost of Care Shared Savings
B Total Cost of Care SharedRisk
C Retrospective BundledPayment
D Prospective BundledPayment
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 scoreson quality and efficiency measures
30% of traditional Medicare payments through APMs
90% of Medicare fee-for-service payments tied to scoreson 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
Advanced Alternative Payment Models
Merit-Based Incentive Payment System (MIPS)
Quality Payment Program(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 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 ParticipationAll Medicare Clinicians 1,380,209
Qualifying APM Participants 70,000 – 120,000Ineligible Clinician Types 199,308Newly Enrolled Clinicians 85,268Low-Volume Clinicians 383,514Total Excluded Clinicians from MIPS 738,090 – 788,090
Total MIPS Participating Clinicians 592,119 – 642,119
Advanced APMs
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Advanced APMs (Traditional Medicare) Definite
Medicare Shared Savings Program
(Tracks 2 & 3 Only)
Next Generation ACO Model
Comprehensive ESRD Care (LDO arrangement and Two-Sided Risk)
Comprehensive Primary Care Plus
(re-open applications)
Oncology Care Model (Two-Sided Risk)
In DevelopmentMedicare Shared Savings Program
Track 1+Comprehensive Care for Joint
Replacement (CEHRT Track)
Episodic Payment Model (CEHRT and non-CEHRT Tracks)
Cardiac Rehabilitation Incentive Payment Model
Medicare Diabetes Prevention Program
New Voluntary Bundled Payment Program
Vermont Medicare ACO Initiative
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Qualifying Participant
Qualifying Participant Higher % of patients or payments Bonus = 5% of MPFS payments
Payment Year 2019 2020 2021 2022 2023 2024QP Threshold 25% 25% 50% 50% 75% 75%Partial QP Threshold 20% 20% 40% 40% 50% 50%
Payment Year 2019 2020 2021 2022 2023 2024QP 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
Partial Qualifying Participant Lower % of patients or payments No bonus, no MIPS
Non-Qualifying Participant Subject to MIPS
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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 Still requires some level of participation in Advanced APMs
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
MIPS
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MIPS Final Score Components
Quality Cost Performance
Improvement Activities
Advancing Care
Information
60%15%
25%
50%
10%
15%
25%30%
30%
15%
25%
2017 Performance Year
2018 Performance Year
2019 Performance Year
Impacts 2019 Payments
Impacts 2020 Payments
Impacts 2021 Payments
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2017 Final Score Calculation
Multiply Each By Component Weight
Final Score
Quality Cost Performance
Improvement Activities
Advancing Care
Information
Page 17
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
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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 Pace2017 Reporting Option 2019 Payment Impact
No reporting 4% penalty on all MPFS payments
Report performance for minimum 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 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 performance on all required measures for minimum 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)
MIPS Components
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Quality Reporting
Manner of Participation
Reporting Mechanism Measure Requirements Data Completeness
Individual Part B Claims6 measures (at least 1 outcome measure) OR
specialty-specific measure set
50% of Part B patients (60% in 2018)
Individual or Group
QCDRQualified Registry
EHR
6 measures (at least 1 outcome measure) OR
specialty-specific measure set
50% of individual’s or group’s patients who
meet measure denominator (60% in
2018)
GroupCMS Web Interface
(register by 06/30/17)
All measures included CMS-selected sample of Part B patients
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Improvement Activities Reporting
90+ Improvement Activities Across 9 SubcategoriesEach Graded Medium (10 pts) or High (20 pts)
Expanded Practice Access
Population Management
Care Coordination
Beneficiary Engagement
Patient Safety and Practice Assessment
Participation in an APM
Achieving Health Equity
Integrated Behavioral and Mental Health
Emergency Preparedness and Response
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Advancing Care Information Reporting
Base Score (Required) Measures(10 points each; Y/N or report numerator/ denominator)
Performance Score Measures(0 to 10 points each based on level of performance)
Security Risk Analysis Patient-Specific Education
E-Prescribing View, Download, or Transmit
Provide Patient Electronic Access Provide Patient Electronic Access
Send a Summary of Care Send a Summary of Care
Request and Accept Summary of Care Request and Accept Summary of Care
Secure Messaging
Patient-Generated Health Data
Clinical Information Reconciliation
Immunization Registry Reporting (Y/N)
Option 2: Clinicians with CEHRT 2015* (Reportable in 2017 and Beyond)
*CEHRT 2015 is required for MIPS Eligible Clinicians to successfully meet ACI requirements in 2018 and beyond
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Cost Performance Component
Not included in 2017 Final Score calculation, but feedback provided
No additional reporting; CMS calculates from claims data Two categories of measures (attribution)
Two total cost-of-care measures Total per-capita costs Medicare Spending Per Beneficiary
Ten episode-based efficiency measures Reported in 2014 supplemental QRUR
Scored on deciles (like quality component)
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Patient Relationship Categories
MACRA-mandated tools to compare relative cost performance among eligible clinicians/groups
Begin including codes on claims no later than 01/01/2018 CMS to publish codes in April 2017
Continuing care relationship Acute care relationship Care furnished pursuant to order from other practitioner
1)
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Final Score Calculation
Sum of each of the products of each component score and each component’s assigned weight, multiplied by 100
Example: Quality = (55 points / 70 possible points) x 60% Advancing Care Information = (84 points / 100 possible points) x 25% Improvement Activities = (40 points / 40 possible points) x 15% FINAL SCORE = 83.14
1)
MACRA Implications for Malpractice Insurance Industry
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Can Physicians Afford to Wait?Inaction Can Have a Significant Cost for Providers
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CMS Estimates for 2019
Financial Impact of QPP AmountEstimated Increased Payments from Federal Government to Providers
MIPS Higher Performer Payment Adjustments $199 millionExceptional Performance (MIPS) $500 millionAPM 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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Physician Consolidation
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 PayersPerformance Scores Easily Replicated
Will other payers follow suit?
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New Provider Recruitment Standards
Providers will carry their Final Score with them. This has implications for health systems, hospitals, and physician groups that are looking to recruit new providers:
1. Impact on future revenue potential
2. Reputational impact that affects the new organization
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Malpractice Considerations
Provision under MACRA: plaintiffs may not use a provider’s performance on quality measures as the sole basis to prove negligence
But… what are the implications? Could public information increase claim awards? Facts regarding lack of participation in MIPS, especially the quality
component, may be introduced into evidence
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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.
Questions?
PERSHING YOAKLEY & ASSOCIATES, P.C.800.270.9629 | www.pyapc.com
Lori A. [email protected](404) 266-9876
Aaron M. EliasConsulting [email protected](404) 266-9876
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