The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Summary of SGR Repeal and Replacement Provisions

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1 ACOG Government Affairs May 2015 The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Summary of SGR Repeal and Replacement Provisions This landmark bipartisan legislation, signed into law on April 16, 2015, repeals the fundamentally flawed Sustainable Growth Rate (SGR), ending years of payment uncertainty and retroactively undoing a 21.2% payment cut which went into effect on April 1, Passage of MACRA is the result of two years of ongoing collaboration between Members of Congress in both the House and Senate, in close consultation with outside healthcare stakeholders, including ACOG and the entire House of Medicine. For over 15 years the SGR s effect made it nearly impossible for physician practices to invest in health information technology and other patient safety advances, even plan for the next year, or to continue accepting Medicare patients. It impacted the approximately 30,000 ob-gyns who participate in Medicare. Medicare payment policies have also been used by many private health insurers and TriCare, the insurance program for military members and their families. Over 600 national and state medical societies and specialty organizations, plus patient and provider organizations, policy think tanks, and advocacy groups across the political spectrum supported the bill. ACOG, through its SGR Task Force, closely reviewed and commented on the bill s myriad of drafts, winning inclusion of several important provisions and improvements. (Link to ACOG letters/comments). The new law stabilizes base payment rates, streamlines current pay-for-performance/quality measure reporting programs, and will allow physicians to be reimbursed by Medicare, under 2 main tracks, with the goal of promoting accountability for high quality care, as defined by the respective specialties. ACOG plans to work closely with the Department of Health and Human Services (HHS) and its Centers for Medicare and Medicaid Services (CMS) through the regulatory process to ensure that the law s provisions are appropriately implemented. The law s focus on delivery of quality care will require specialty societies to provide active and rigorous input so this reformed payment system will appropriately compensate physicians, while ensuring access to top level care for Medicare beneficiaries. BASELINE PAYMENT UPDATES (ADDITIONAL ADJUSTMENTS BASED ON MEETING EITHER MIPS OR APM REQUIREMENTS SEE BELOW): Repeal of flawed SGR formula 0% update through June % update July 2015 through % annual update 2020 through and beyond.75% annual update for qualifying Alternative Payment Model participation, 0. annual for others TRANSITION YEARS THROUGH 2018 Payment implications of current pay-for-performance/quality reporting programs sunset at the end of % penalty for failure to report Physician Quality Reporting System (PQRS) quality measures 3% penalty (would have increased to 5% in 2019) for failure to meet Electronic Health Records (EHR) Meaningful Use (MU) requirements, and Value Based Modifier: o o 2016, Practices with 100+ providers, 2% penalty for low VBM performance score. 2017, Practices with 1-9 providers, 2% penalty for non-participation in 2015 PQRS. Practices with 10 or more providers, 4% penalty for non-pqrs participation for low VBM performance score.

2 o 2018, All providers subject to a possible downward adjustment, contingent on their VBM score. NEAR ERA AND BEYOND Beginning in 2019 payments would occur through one of the ways: the Merit-based Incentive Payment System (MIPS), or via Alternative Payment Models (APMs). For , CMS is to spend $20 million annually on technical assistance to help practices with 15 or fewer professionals improve MIPS performance or transition to APMs. Priority will be given to organizations/activities aiding providers in underserved and health professional shortage areas. Low-volume Medicare providers would still be eligible to be paid through straight fee-for-service, exempted from both programs requirements and penalties. Payment Option 1: MIPS The MIPS, builds on current fee-for-service (FFS) and consolidates the PQRS, EHR MU, and VMB programs, promoting a more cohesive program to focus on quality and resource use. Specifically, the MIPS creates four assessment categories, which jointly will result in a provider performance score. The weights of the categories change in years, 2019, 2020, and 2021 (see Figure 1). This score in turn is then used to make positive and negative payment adjustments. Providers will also have the option to be assessed as a group, as a virtual group, or with an affiliated hospital or facility. Providers will receive confidential feedback on performance in the quality and resource use categories at least quarterly. Assessment Categories 1. Quality. With input from specialty societies, HHS would annually update quality Metrics for use in this category. In addition to currently available measures used in PQRS, VBM and EHR MU, professional organizations may be funded to develop additional measures. Providers will select which measures on the final list to report and be assessed on. Whenever feasible quality measures applicable to a specialty would represent five domains: o Clinical care, o Safety, o Care coordination, o Patient and caregiver experience, and o Population health and prevention. 2. Resource Use. CMS, through additional stakeholder input, plans to improve upon the current VBM program s methodology by better identifying resources associated with specific care episodes and better patient attribution and risk adjustment algorithms and rules. WEIGHTING OF MIPS CATEGORIES Quality Resource use EHR MU Practice Improvement EHR Meaningful Use. Current EHR Meaningful Use requirements continue to apply, but providers who report quality measures through certified EHR systems are deemed to meet this assessment category. 4. Clinical Practice Improvement Activities. This category rewards providers engaging

3 in clinical improvement activities, which must also be attainable for small practices and professionals in rural and underserved areas. Recognized activities, established in collaboration with individual specialties include: o Expanded practice access, such as same day appointments for urgent needs and after-hours access to clinician advice. o Population management, such as monitoring health conditions of individuals to provide timely health care interventions or participation in a qualified clinical data registry. o The subcategory of care coordination, such as timely communication of test results, timely exchange of clinical information to patients and other providers, and use of remote monitoring or telehealth. o Beneficiary engagement, such as the establishment of care plans for individuals with complex care needs, beneficiary self-management assessment and training, and using shared decisionmaking mechanisms. o Patient safety and practice assessment, such as through use of clinical or surgical checklists and practice assessments related to maintaining certification. MIPS Payment Adjustment Based on their performance in each of the above four categories, providers would receive a composite performance score of Providers would also receive credit for improvement from one year to the next in categories 1, 2, and 4. The composite score is then compared to a performance threshold that is either the mean or median of the composite performance scores for all MIPS providers. Providers will know what composite score they must achieve to obtain incentive payments/avoid penalties at the beginning of each year. Following a linear distribution, providers scoring above the threshold receive positive payment adjustments and those scoring below receive negative payment adjustments. The program is budget neutral, so total negative adjustments across all providers will equal total positive adjustments across all providers. Negative adjustments Capped at 4% in 2019, 5% in 2020, 7% in 2020, and 7% in 2021, 9% for 2022 and beyond. Composite performance score between 0 and ¼ of the threshold will receive the maximum negative adjustment. Scores closer to threshold receive proportionally smaller negative adjustments. Zero adjustments Scores at threshold do not receive a MIPS payment adjustment. Positive adjustments Providers with scores above the threshold in years 2019 through 2024 will receive positive payment adjustments; higher scores receive proportionally larger incentive payments up to three times the annual cap for negative payment adjustments. o A second threshold for exceptional performance set at the top 25 th percentile makes high performers eligible for additional payments. Payment Option 2: APMs Providers receiving a significant share of their revenues through an APM(s) that involves risk of financial losses and a quality measurement component are eligible for a 5% bonus each year from , and would not be subject to the MIPS. A patient-centered medical home APM will be exempted from the downside financial risk requirement if proven to work in the Medicare population. APMs include models under the Center for Medicare and Medicaid Innovation; Medicare accountable care organizations; and certain other federal demonstration programs. There are two tracks to qualify for the bonus: Option 1: Based on receiving a significant % of Medicare revenue through an APM : of Medicare revenues furnished as part of an eligible APM; : 50% of Medicare revenues furnished as part of an eligible APM;

4 2023 and beyond: 75% of Medicare revenues furnished as part of an eligible APM. Option 2: Based on receiving a significant % of APM revenue combined from Medicare and other payers (excluding payments from Veterans Affairs and the Department of Defense). If no Medicaid APM is available in a state, a professional s Medicaid revenue will not be counted against the proportion of revenue in an APM. In states where Medicaid APMs are available, Medicaid medical homes will also be exempted from downside financial risk if they are proven to work in the Medicaid population : At least 50% of all revenue is part of an APM, with at least of it being Medicare revenue and beyond: At least 75% of all payer revenues for services provided as part of an APM, with a minimum of coming through Medicare Option 1 OR Option 2 All-Payer APM Medicare-Only APM % 50% 2023 and on 75% Medicare Revenues as part of APM Medicare All-Payer Total 75% Beginning 2021, HHS may also decide to determine that a provider meets the APM requirements using counts of patients in lieu of using payments and using the same or similar percentage criteria. To maximize the number of providers that could be eligible for this bonus, HHS is encouraged to test APMs relevant to a myriad of specialties, providers in small practices, and those that align with private and state-based payer initiatives. A Technical Advisory Committee is established to consider physician-focused APM proposals. Other Ob-Gyn Relevant Medicare Provisions: - Prohibits implementation of the 2015 Medicare Physician Fee Schedule provision which would have required the transition of all 10-day and 90-day global surgical packages to 0-day global periods. Instead, CMS is instructed to collect additional data from providers to appropriately value surgical services. - Physicians who opt out of Medicare can now automatically renew at the end of each two-year cycle. - Any quality metrics established by this law and other federal government programs cannot be used as a standard of care in medical liability actions.

5 Permanent SGR Repeal: Predictable Annual Baseline Updates Jan-Jun 0%, Jul-Dec 0.5% 0.50% 0.50% 0.50% 0.50% 0% 0% 0% 0% 0% 0% 0., annually for MIPS Separate Incentive/Penalty Programs Sunset Incorporated Into MIPS Physician Quality Reporting System (up to %) -1.50% -2.00% -2.00% -2.00% EHR Meaningful Use (up to %) -1.00% -2.00% -3.00% -4.0%? Value-Based Payment Modifier (up to %) -1.00% -2.00% -4.00%???% 0.75%, annually for APMs Post-SGR Payment System Option 1: MIPS Option 2: APMs Merit-Based Incentive Payment System (MIPS) Adjustments (up to %) Pos. adjustments can be up to 3x amount of neg adjustments, but MIPS bonuses and penalties must balance each other out. -4% to +12% -5% to +15% -7% to +21% -9% to +27% Exceptional performers may qualify for additional + adjustment; up to 10% annually Alternative Payment Model (APM) Adjustments APM providers exempt from MIPS +5% +5% +5% +5% +5% +5%

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