This morning, CMS released its final rule implementing the Medicare Quality Payment Program. This rule finalizes the proposed Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) rule issued in May 2016, and incorporates comments received in response to that proposal. Applied Policy’s blog on the proposed rule can be found here. This final rule will take effect on January 1, 2017, and CMS is soliciting additional comments for sixty days.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) replaced the Medicare Sustainable Growth Rate (SGR) formula with the new MIPS methodology. MIPS is intended to consolidate components of the Physician Quality Reporting System (PQRS), the Physician Value-Based Purchasing (VBP) Program, and the Medicare Electronic Health Record (EHR) Incentive Program. The final rule continues these programs while aiming to provide increased flexibility, simplicity, and support for small practices.
The final rule contains tweaks to increase participation in both MIPS and Advanced APMs
In both the proposed and final rules, clinical providers may choose to continue to participate in fee-for-service Medicare payment, while being evaluated based on quality, resource use, clinical practice improvement activities (CPIAs), and meaningful use of certified EHR. Each category would include a variety of outcome, performance, and global and population-based measures which would be used to calculate a MIPS composite performance score (MIPS CPS). Each clinician’s MIPS CPS would be compared against a threshold and used to determine whether the clinician receives an increased payment adjustment, no payment adjustment, or a decreased payment adjustment. The final rule also allows clinical providers to choose their own pace of reporting, with clinicians able to choose whether to begin participating immediately upon implementation, or later in the year. We address this further below.
The final rule modifies both the MIPS quality and CPIA categories in an effort to simplify reporting requirements, while deferring payment adjustments based on the “resource use,” or cost component to 2018. Accordingly, for 2017, categories within the composite score will be weighted as shown in Figure 1. In addition, changes were made to the certified EHR category in an attempt to align health IT usage with quality, as well as to focus on the use of EHRs to simplify the reporting requirements across all of the program’s domains.
Alternatively, clinicians may elect instead to participate in an Advanced Alternative Payment Model (Advanced APM), such as an Accountable Care Organization (ACO). The final rule adds an additional Advanced APM, starting in 2018, which will have lower levels of financial risk than existing ACOs and, in concert with efforts to broaden the list of existing programs which qualify as an Advanced APM, is intended to help CMS achieve an estimated 25 percent of clinicians enrolled in an Advanced APM by 2018. Eligible Advanced ACO participants will receive a 5 percent participation bonus in 2019, and based on a sampling of 2014 Medicare payment data from the Wall Street Journal, Applied Policy estimates that this bonus could increase payments to the average geriatrician by approximately $3,600 annually.
Additional assistance and flexibility for smaller providers
In addition, the final rule raises the participation threshold in order to exclude more small practices (approximately 380,000 clinicians) as compared to the proposed rule. It also includes provisions intended to help smaller practices participate in Advanced APMs, as well as significant outreach to those providers with a goal of uniform levels of Advanced APM participation, regardless of provider size.
Final rule provides minimal incentives for partial participation in MIPS
The final rule allows clinical providers to “pick your pace” in participating in MIPS. Clinicians who choose not to submit any data in 2017 will receive a 4 percent reduction in their Medicare payments in 2019. Based on a sampling of 2014 Medicare payment data from the Wall Street Journal, Applied Policy estimates that this reduction would cost the average geriatrician approximately $2,900 annually.
Those who submit some data, but less than 90 days, will avoid the 4 percent penalty, but will not be eligible for any bonus payments. Clinical providers who submit a partial year (at least 90 days) of payment, may or may not receive an incentive for participating (CMS references a “neutral payment adjustment”). Finally, those who submit a full year of data may receive a moderate payment increase of 4 percent in 2019, subject to the requirement that the program remain budget neutral. Both the penalty and the incentive payment will gradually increase to 9 percent in 2022.
CMS makes additional resources available
CMS has provided a number of resources to assist clinicians in what is sure to be a significant adjustment period. These include a new Quality Payment Program website, as well as a long-term initiative aimed at improving clinicians’ experience with Medicare.
As always, Applied Policy is available to answer any questions you may have about this or any other new developments in healthcare. Please feel free to leave a comment, email us at gpugh@appliedpolicy.com, or call 202-558-5272.