MACRA & APMs: More than Acronyms June 2, 2016

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1 MACRA & APMs: More than Acronyms June 2, 2016

2 Agenda 1. Framework 2. CMS Quality Initiatives 3. MACRA - MIPS or APM? 4. Alternative Payment Models 5. Case Study 2

3 Alternative Payment Models

4 Transitioning One definition of APM different than the operational definition under MACRA How do we plan far enough in advance to optimize our opportunities? 4 Source: Dr Patrick Conway s address to 2015 HIMSS as documented at:

5 When you work on one 5

6 What is the HCPLAN The Health Care Learning & Action Network 3 rd goal of HHS announcement Jan 2015 Purpose: drive alignment in payment approaches across the public and private sectors of the U.S. health care system Alternative Payment Models Framework and Progress Tracking Work Group charged with creating an alternative payment framework that could be used to track progress toward payment reform. All information obtained from APMFPT, Alternative Payment Model (APM) Framework: Final White Paper, 1/12/2016

7 7 Principles 1. Changing providers financial incentives is not sufficient to achieve person centered care, so it will be essential to empower patients to be partners in health care transformation 2. The goal for payment reform is to shift US health care spending significantly towards population based (and more person focused) payments. 3. Value based incentives should ideally reach the providers that deliver care 4. Payment models that do not take quality into account are not considered APMs in the APM framework, and do not count as progress toward payment reform. 5. Value based incentives should be intense enough to motivate providers to invest in and adopt new approaches to care delivery. 6. APMs will be classified according to the dominant form of payment when more than one type of payment is used. 7. Centers of excellence, accountable care organizations, and patient centered medical homes are examples, rather than categories in the APM framework because they are delivery systems that can be applied to and supported by a variety of payment models. All information obtained from APMFPT, Alternative Payment Model (APM) Framework: Final White Paper, 1/12/2016

8 APM Framework At-A-Glance 8 The framework situates existing and potential APMs into a series of categories. Source: Alternative Payment Model Framework and Progress Tracking (APM FPT) Work Group. Alternative Payment Model (APM) Framework Final White Paper. Health Care Payment Learning and Action Network. 12 Jan

9 Work Group s Goals for Payment Reform 19 Source: Alternative Payment Model Framework and Progress Tracking (APM FPT) Work Group. Alternative Payment Model (APM) Framework Final White Paper. Health Care Payment Learning and Action Network. 12 Jan

10 CMS Quality Initiatives

11 Understand the Financial Implications for Your Practice Impact Year and Beyond Performance Period TBD TBD TBD TBD TBD TBD TBD Value Modifier Groups > 100 Eligible Professional (EPs) Groups > 10 EPs Groups 1-9 EPs (-1.5%) to 9.8% (-2%) to 2(15)% (-4%) to 4(x*)% (-2%) to 2(x*)% Meaningful Use Penalties (-1%) (-2%) (-3%) (-4%) to 2(x*)% (-3 to - 4%) 4% 5% 7% 9% MAXIMUM Adjustments Transition to Quality Payment Program : MIPS/APM PQRS Penalties (-2%) Total (from above): (-4.5%) to 9.8% (-6%) to 2(15)% (-9%) to 4(x*)% (-10%) to 4(x*)% -4% -5% -7% -9% Advanced Alternative Payment Model (QP) No MIPS Risk: 5% Lump Sum Payment Merit-Based Incentive Payment System (MIPS) (-4%) to 4% + HP** (-5%) to 5% to + HP** (-7%) to 7% to HP** (-9%) to 9% to + HP** (-9%) to 9% to + HP** (-9%) to 9% to + HP** (-9%) to 9% to + HP** (-9%) to 9% to + HP** Fee Schedule Updates (All) 0.50% 0% Increase Fee Schedule Updates (MIPS) 0.25% Fee Schedule Updates (QP) 0.75% * Bonus calculated for monies generated from penalty pool ** High Performers eligible for additional $ pool = $500 million 11

12 Value Modifier

13 Value Modifier Major Components Applied by Tax ID and patients by PCP and/or plurality Quality, Cost & Claims Based Outcome Scores (60%+ of MIPS) Quality and Resource Use Reports (QRURs) Impact to Medicare Reimbursement Adjustment Factor 2 Calculated as 2.0x Adjustment Factor for High Risk Beneficiaries 3 Calculated as 3.0x Adjustment Factor for High Risk Beneficiaries 4 TINs with Eligible Physicians do no receive downward adjustments under quality-tiering in 2016 Source: CMS 2016 VM Overview PDF Memo, CMS 2016 VM OACT Adjustment Factor PDF Memo 13

14 QRURs & Scoring The Quality and Cost Composite Scores used for quality-tiering summarize each TIN s performance on quality measures across six quality domains and on cost measures across two cost domains: SCORE: Clinical Care 0.23 Value Modifier Adjustment 0% Quality Composite 50% SCORE: 0.73 SCORE: 0.15 Cost Composite 50% Patient Experience Population/Community Health 1.37 Patient Safety 0.49 Care Coordination 1.12 Efficiency 0.77 Total Per Capita Cost + MSPB Note: grey boxes were not reported measures Total Per Capita Cost 0.77 Beneficiaries with Specific Conditions 14

15 QRUR Insights Is cost consistent with the Hierarchical Condition Category (HCC)? Average Per Episode Cost and HCC Percentile Ranking by Provider Average Cost and HCC Dr. A Dr. B Dr. C Dr. D HCC Value less than Average Dr. E Dr. F Dr. G Dr. H Average HCC Value Dr. I 15

16 Average Per Capita Costs QRUR Insights How are your costs attributed by provider & service category? Per Capita Costs by EP Providing Majority of Primary Care Services and Service Breakdown Post-Acute Services Inpatient Hospital Facility Services Ancillary Services Outpatient Physical, Occupational or Speech and Language Pathology Therapy Ambulatory/Minor Procedures Billed by Eligible Professionals in Your TIN Major Procedures Billed by Eligible Professionals in your TIN Evaluation & Management Services Billed by Eligible Professionals in Your TIN Dr. A Dr. B Dr. C Dr. D Dr. E Dr. F Dr. G Dr. H Dr. I Dr. J Dr. K 16

17 MACRA - MIPS or APM?

18 Medicare Access & CHIP Reauthorization (MACRA) MACRA: Ended the Sustainable Growth Rate (SGR) formula for determining Medicare Part B payments for health care providers services Establishes a new framework the Quality Payment Program which rewards health care providers for giving better care not more just more care (MIPS and APM) Sunsets existing programs PQRS, VM, MU, erx Provides consistent physician fee schedule increases (0.5% from 2015 through 2019) Establishes a technical advisory committee for assessing Physician Focused Payment Model (PFPM) proposals Proposed rule open for comment until June 27,

19 Quality Payment Program: MIPS or APM? Starting in 2019, all medical practices will fall into one of two categories under the Quality Payment Program established MACRA: Merit Incentive Based Program (MIPS) Portion of practice Medicare Revenue at risk at the Tax Identification Number or individual level based on performance in these categories: Advanced Alternative Payment Models (APMs) No downside risk on Physician Fee Schedule if a significant portion of Medicare Revenue flows through an Advanced APM (Qualified Participant = QP): MEASURE CATEGORIES Quality (aka PQRS) Cost - Resource Use (aka VM) Advancing Care Information (aka MU) Clinical Practice Improvement Activities (CPIA) YEAR 1 (2019) YEAR 2 (2020) YEAR 3 (2021) 50% 45% 30% 10% 15% 30% 25% 25% 25% 15% 15% 15% *THRESHOLDS 2019 to to % of Payments 25% 50% 75% % Patients 20% 35% 50% Starting in can include non Medicare Revenue/Patients Proposed Models: Comprehensive Primary Care Plus (CPC+) MSSP Tracks 2 & 3 Next Generation ACO Oncology Care Model Two-Sided Risk Arrangement (OCM - available 2018) Comprehensive ESRD Care (CEC) Model HHS may revise weights * Awaiting final rule and partially qualifying APM status is available 19

20 Getting from Here to There Everyone in MIPS year one Performance period 2017 adjustment impact 2019 Existing Medicare Part B Quality Reporting Programs PQRS + Value Based Payment Modifier + Meaningful Use Clinical Practice Improvement Activities (CPIA) 50% YR 1 35% YR 2 30% YR 3 10% YR 1 Quality 20

21 MIPS QUALITY (old PQRS) 50% of total score in YR 1 30% YR 3 Replaces the PQRS Replaces Quality Composite VM Program Some direct reporting required Points: available (Group size dep.) Choose to report six measures versus the nine measures currently required under the PQRS Category gives clinicians reporting options to choose from to accommodate differences in specialty and practices Outcomes/Population measures claims based 21

22 MIPS Resource Use (old VM Cost Composite) 10% of total score in YR 1 30% YR 3 Replaces the cost component of the VM Program No direct reporting required Points: Avg Score Cost Measures / patient sample Score based on Medicare claims data Uses more than 40 episode-specific measures to account for differences among specialties Per Capita Cost and Medicare Spend Per Beneficiary (MSPB) included 10% YR 1 22

23 MIPS Advancing Care Information (old MU) 25 % of total score all YRS Replaces Meaningful Use (MU) Direct reporting required Points: 100 maximum - 50 base pts, 80 performance pts + bonus pts - Choose to report customizable measures that reflect how they use electronic health record (EHR) technology in their day-to-day practice, with a particular emphasis on interoperability and information exchange. - Unlike MU, this category would not require all-or-nothing EHR measurement or quarterly reporting. 23

24 MIPS Clinical Practice Improvement Activities 15 % of total score all YRS New Category Direct Reporting Required Points: maximum 60 - Rewards for clinical practice improvement activities such as activities focused on: - care coordination - beneficiary engagement - patient safety - Select from a list of over 90 options (these are weighted some heavier than others) - Receive credit in this category for participating in Alternative Payment Models and in Patient- Centered Medical Homes 24

25 Adjustment Factors MIPS Scoring CPS = Illustrative Example of MIPS Adjustment Factors Based on Composite Performance Scores (CPS) 10% 8% 6% 4% 2% 0% -2% -4% -6% Quality [ ( ) + score x weight Performance Threshold = 60 Adjustment Factor CPIA ( ) ( + score x + score x weight Resource Use weight Adjustment Factor + Additional Adjustment Factor Advancing Care Information ( ) ] x 100 score x weight 25

26 Standards for Advanced APMs Require participants to bear a certain amount of financial risk: Total risk (maximum amount of losses possible under the Advanced APM) must be at least 4 percent of the APM spending target. Marginal risk (the percent of spending above the APM benchmark (or target price for bundles) for which the Advanced APM Entity is responsible (i.e., sharing rate) must be at least 30 percent. Minimum loss rate (the amount by which spending can exceed the APM benchmark (or bundle target price) before the Advanced APM Entity has responsibility for losses) must be no greater than 4 percent. Base payments on quality measures comparable to those used in the MIPS quality performance category Require participants to use certified EHR technology Advanced APM Menu: Comprehensive Primary Care Plus (CPC+) MSSP Tracks 2 & 3 Next Generation ACO Oncology Care Model Two-Sided Risk Arrangement (available 2018) Comprehensive ESRD Care Model 26

27 Qualifying APM vs Partial Qualifying APM: Revenue Based MEDICARE OPTION Qualified 25% 50% 75% Partially Qualified 20% 40% 50% OR ALL PAYER COMBINATION OPTION Qualified N/A 50%/25% 75%/25% Partially Qualified N/A 40%/20% 50%/20% (The second number is the required minimum Medicare threshold still mandated in the All Payer Combination Option) 27

28 Decision Tree Revenue Based: Qualifying APM vs Partial Qualifying APM Per the Proposed Regulations 4/27/ Medicare Option Yes Is Threshold Score 25%? Yes No Is Threshold Score 20%? QP Partial QP No MIPS EP 28

29 Decision Tree Revenue Based: Qualifying APM vs Partial Qualifying APM Per the Proposed Regulations 4/27/ All-Payer Combination Option Yes Is Threshold Score 50%? No QP Yes Is Medicare Threshold Score 25%? No Is All-Payer Threshold Score 50%? Is Medicare Threshold Score 20%? Yes No Yes QP Is All-Payer Threshold Score 40% OR is Medicare Threshold Score 40%? Yes No Partial QP MIPS EP No MIPS EP 29

30 Qualifying APM vs Partial Qualifying APM: Patient Count Based MEDICARE OPTION Qualified 20% 35% 50% Partially Qualified 10% 25% 35% OR ALL PAYER COMBINATION OPTION Qualified N/A 35%/20% 50%/20% Partially Qualified N/A 25%/10% 35%/10% (The second number is the required minimum Medicare threshold still mandated in the All Payer Combination Option) 30

31 MACRA Decision Tree BOTTOM LINE: There are opportunities for financial incentives for participating in an APM, even if you don t become a Advanced APM. Organizations that explore a variety of APM possibilities and incorporate non Medicare lives are more likely to meet Advanced APM thresholds. 31

32 Impact of MIPS 32

33 Graphical Depiction of Practice Performance 33

34 Other Key Facts Different metrics for non patient facing clinicians provided $20 million/year for technical assistance to small practices to participate in APMs/MIPS MACRA authorizes coverage for telehealth services in APMs Federal physician advisory panel established to review physician proposals for new APMs Secretary of HHS must issue a request for information from stakeholders, proposed rule before establishing criteria for advisory panel recommendations on new APMs 34

35 Strategic Considerations Small vs larger practices Employed vs Affiliated Competitive Markets- who will offer APM Game plan of CINs and IDS APM Planning Maximization of MIPs or APM path 35

36 Advanced Alternative Payment Models 36

37 MSSP Delivering Mixed Results Source: Advisory Board 37

38 NGACO Tests Full Performance Risk Source: Advisory Board 38

39 Differences MSSP & NGACO 39

40 CMS Proposal 1/28/16 to MSSP Proposed regional rather than national spend growth trends when establishing and updating an ACO s rebased benchmark Proposes adjusting an ACO s rebased benchmark when it enters a second or subsequent agreement period by a % of the difference between FFS spending in the region and the ACO historical spend Optional 4 th year Streamlined methodology for adjusting benchmark when composition changes Outlined criteria for reopening determinations for good causes or fraud. 40

41 PCMH Progress Source: Patient Centered Medical Home may count toward Advanced APM status if expanded under CMMI and: - Accredited through: - NCQA - Joint Commission designation - Accreditation Association for Ambulatory Health care - Utilization Review Accreditation Commission - Medicaid Medical Home or Medical Home Model - NCQA Patient Centered Specialty Recognition 41

42 Comprehensive ESRD Care Model First specialty model Currently 13 organizations participating that form ESRD Seamless Care Organizations (ESCOs) Differentiates between large (LDOs) and other dialysis organizations in the financial arrangements Non LDOs can choose one sided shared savings LDOs are two sided Application for next round is due July 15,

43 Oncology Care Model Second specialty model to be announced Multi payer 5 year model driven by Medicare Seeking financial and performance accountability for episodes of care surrounding chemotherapy administration to cancer patients Covers Part A and B services and some Part D Episode Length is 6 months from date of initial chemotherapy Based at the Oncology Practice level Started Spring tracks available 43

44 Oncology Care Model OCM-FFS will use a two-part payment approach for participating oncology practices. These two forms of payment include: 1) a monthly $160 per-beneficiary care management payment for Medicare FFS beneficiaries 2) a performance-based payment for OCM episodes. The performance-based payment will be determined based on the practice s achievement and improvement on quality measures Participants will receive regular Medicare FFS payments during the model. Performance-based payments will be calculated retrospectively following the completion of a 6-month episode Note: A participating practice will NOT receive performance-based payments until reductions in expenditures BELOW the target price exceed the amount of PBPM payments. Practices that do NOT qualify for a performance-based payment by the end of the third performance year would be removed from OCM-FFS. 44

45 Comprehensive Primary Care Plus - Overview Multi-payer Advanced Primary Care Medical Home Model that rewards value and quality by providing a payment structure to help support delivery of comprehensive primary care. Five-year expansion of the CPC program ( ) The program will encompass: 20 regions 5,000 practices with more than 20,000 physicians 25 million lives Goal: Improved care, better health for patient populations, and lower total care costs. Care Delivery Framework 1. Access and Continuity 2. Care Management 3. Comprehensiveness and Coordination 4. Patient and Caregiver Engagement 5. Planned Care and Population Health

46 Eligibility Location: 20 regions - regions to be announced: July 15, 2015 Practice must have a minimum of 150 attributed Medicare Beneficiaries Note: Pediatric Practices are eligible to apply Eligible Specialties: Internal Medicine General Medicine Geriatric Medicine Family Medicine Patient Attribution: Based on plurality of primary care claims over past two years Multi-Payer Initiative including Medicare FFS Beneficiaries, Medicare Advantage, Medicaid, and commercial patients Note: Specific Payers not yet identified

47 Multiple Tracks Track 1 Track 2 Practices with multi-payer support Certified Health IT and other basic infrastructure necessary to deliver comprehensive primary care Program Length: 5 years Number of Participants: 2,500 practices Payments Medicare FFS Care Management Fee Performance-Based Incentive Payment Practices with multi-payer support Requires Letter of Support from Certified Health IT Vendor(s) Program Length: 5 years Number of Participants: 2,500 practices Payments Medicare FFS (reduced) Care Management Fee Performance-Based Incentive Payment Comprehensive Primary Care Payments (CPCPs)

48 Case Study 48

49 Sample Practice CMS Quality Programs CMS Quality Programs including Value Modifier Performance Projections actions taken in 2016 impact +/- in 2018 Est Cumulative Impact 2 Yrs +3.18M High Performers VM Incentive +$399K Max Penalty -$899K 49

50 Sample Practice MIPS or APM? Key Attributes :.5% increase until 2019 Medicare 18% of payer mix Current Traditional Medicare Revenue of $4,935,588 CY % increase year over year Est impact +$99K 50

51 Sample Practice MIPS or Advanced APM (QP) Estimated Impact : +4% +5% -9% 2024 ANNUAL: MIPS +$453K -$453K QP (APM) +$251K QRUR Based Est +$251K Does not include potential additional dollars available through an APM *QRUR estimate based on current VM performance. 51

52 Sample Practice MIPS or Advanced APM (QP) Estimated Impact with Exceptional Performers: +10% +4% +5% -9% 2024 ANNUAL: *MIPS +$956K +$453K -$453K QP (APM) +$251K QRUR Based Est +$251K Does not include potential additional dollars available through an APM * There is also a MIPS scaling factor of 3X that could increase incentive dollars. 52

53 Sample Practice MIPS or Advanced APM (QP) Cumulative Impact Estimated Cumulative Impact : QP (APM) guaranteed $1.51M risk at APM level MIPS $2.16M risk at MD TIN level QRUR Est $1.23M risk at MD TIN level 53

54 Sample Practice Physician FS Impact Estimated Cumulative Impact 2026 Forward Physician Fee Schedule Increase only: QP (APM) By 2030 $128K variance between QP/MIPS MIPs 54

55 Sample Practice - Opportunity Summary Over the next seven years, the variance from highest to lowest reimbursement is estimated to grow to 36% or more for Medicare patients. The estimated variance in the VM program for the practice is projected at $2.04 Million in

56 MACRA: Advanced APM or APM or MIPS? Financial Downside Risk Financial Upside Potential QP - Advanced APM APM MIPS No Downside in Physician Fee Schedule Risk at APM level +$1.51M (Lump Sum ) Varies with APM +.75% FS increase 2026 forward est $191K (5Yrs) Qualified Alternative Payment Model (APM - Q) Potential - Maximum Risk -9% If thresholds met may opt out of MIPS ( % of Rev or 10% of Patients) -$2.16M ( ) -9% +$2.16M ( ) +9% +$1.23M based on QRUR 10% of Medicare Revenue for Exceptional Performers +$5.18M (+10% ) +.25% FS increase 2026 forward est $63K(5Yrs) Reporting Requirements Waived but still reporting through APM Potential Waived but still reporting through APM Mandatory but being harmonized Population Health Implications Mandatory for Success Mandatory for Success Mandatory for Success Commercial Contract Implications Favorable posture for accepting risk contracts Favorable posture for accepting risk contracts Less favorable posture for accepting risk contracts 56

57 Doral Jacobsen, Senior Manager DHG Healthcare D: E:

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