On April 27, 2016, CMS released the anticipated proposed rule concerning the new Merit-Based Incentive Payment System (MIPS) and Alternative Payment Model (APM) Incentive under the Physician Fee Schedule. The agency had released a request for information (RFI) in late 2015 to gather input from stakeholders before writing the proposed rule.

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 proposed rule also establishes incentives for physicians to participate in APMs; CMS has set a goal of moving 50% of Medicare payments to physicians to APMs by 2018.

Comments on the rule are due by 5:00 pm ET on June 27, 2016. If you would like assistance in preparing comments, please let us know.

Practitioners Will Be Evaluated Across Four Performance Categories, CMS Will Calculate a Composite Score for Each Practitioner to Determine Payment Adjustments

• Clinicians will be 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 measures, performance, measures, and global and population-based measures.
• These categories pull from existing measurement requirements that clinicians are already required to report. CMS is proposing the following parameters:
  • Quality: Clinicians will have to report on at least six quality measures, including at least one outcome measure and one cross-cutting measure (if available).
  • Resource Use: Clinicians will continue to use two measures currently in use by the Value-Based Modifier Program: total costs per capita for all Medicare beneficiaries, and Medicare Spending per Beneficiary (MSPB).
  • CPIA: CMS will only encourage clinicians to participate, but will not require clinicians to participate.
  • Meaningful Use: clinicians will be subject to an assessment based on “advancing care information measures and objectives.”
• CMS is proposing to measure each clinicians across all performance categories a 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. Payment adjustments would be budget neutral.
  • CMS estimates that approximately $833 million would be distributed between negative and positive adjustments in 2019.
• CMS is proposing to allow clinicians to submit information individually or at the group practice level.
• CMS is proposing a targeted review process that would allow clinicians to request a review of MIPS CPS calculations. CMS is also proposing to report clinician data via the Physician Compare website.

First Payment Adjustment Would Take Effect January 1, 2019, Using 2017 Data

• CMS is proposing to make the first payment adjustment effective January 1, 2019, using data gathered between January 1 – December 31, 2017.

Advanced APMs Offer Clinicians an Alternative to MIPS

• Under MACRA, clinicians are required to be paid either under MIPS or under Advanced APMs. CMS is proposing to define APMs as “arrangements in which eligible clinicians may participate through other payers.”
• CMS would designate APMs as an Advanced APM. Advanced APMs must:
  • Require participants to use certified EHRs;
  • Provide payment for services based on quality measures comparable to those included in MIPS; and
  • Be either a Medical Home Model or otherwise bear some sort of risk for monetary losses.
• Accountable Care Organizations, Patient-Centered Medical Homes and other CMS bundled payment models would all be considered Advanced APMs.
• Clinicians will have to meet specified thresholds in order to be considered participants in an Advanced APM. This may be achieved by participating in one or several APMs, however.
• CMS estimates that fewer than 100,000 clinicians would participate in an Advanced APM in 2019 (the first year the model is in effect), and that between $146-$429 million in incentive payments would be made. This would appear to fall short of the agency’s previously-stated goal of having 50% of Medicare payments under APMs by 2018.