CMS Issues Proposed Rule on Physician Quality Payment Models

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In October 2016, CMS issued a Final Rule for the new physician payment system under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). MACRA replaced the Medicare Sustainable Growth Rate (SGR) with a new physician payment method, the Quality Payment Program (QPP). To participate, physicians must join in either the Merit-Based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (Advanced APM). King & Spalding’s summary of the existing policy is available here. On June 20, 2017, CMS announced a Proposed Rule to implement Year 2 of MACRA.  Significant proposed changes include an easier-to-meet MIPS low-volume program exemption threshold, the ability for MIPS providers to participate in a “Virtual Group” with other small practices, additional MIPS bonus points and generally less burdensome timing and risk APM requirements.

To provide “additional flexibilities” for small practices (15 or fewer clinicians), CMS proposes the following:

  • Increasing the low-volume threshold (mandating MIPS participation) from $30,000 to $90,000 a year in Medicare Part B allowed charges and from 100 to 200 Medicare Part B patients. CMS estimates that this will exclude an additional 134,000 clinicians, on top of the already-excluded 700,000 under the previous, lower thresholds.
  • Allowing for MIPS opt-in starting with 2019 performance period for individual physicians or groups that would otherwise be excluded from MIPS reporting (and a potential positive payment adjustment) due to a failure to meet the low-volume threshold. CMS proposes to allow an opt-in if just one of two of the thresholds is met. CMS is also seeking comments on adding third opt-in measurement based on the number of Part B items and services. Further, CMS is seeking comments on whether there should be a required length of participation for opt-in clinicians and whether quality benchmarks might have to be adjusted (due to potentially small patient sample sizes). Allowing for the creation of Virtual Groups for MIPS-eligible solo practitioners or groups with 10 or fewer eligible clinicians based on formal written agreement prior to 2018 performance period. Virtual Groups to be maintained for one-year period, with election made prior to the 2018 performance period. Virtual Groups would need to exceed low-volume threshold at the group level (and not necessarily at an individual clinician level). Previously, groups were limited to NPIs that had assigned their billing rights to a single TIN.

Other proposed MIPS changes include:

  • Changes to MIPS composite score weights for the 2018 performance year, quality is to be set at 60 percent, cost at 0 percent, advancing care information at 25 percent and improvement activities at 15 percent.
  • Awarding bonus points to eligible clinicians if caring for complex patients (up to 3 points), participating as part of a small practice (5 points) or exclusively using 2015 Edition CEHRT (10 points). As proposed, the small practice bonus would only apply for the 2018 performance period, to be re-evaluated annually thereafter. CMS is seeking comments on whether those who practice in rural areas should also receive bonus points in the future. 
  • Adding a “significant hardship exception” from the advancing care information MIPS performance category, meaning that category would be set at zero percent upon a showing of significant hardship.  If the exception applies, CMS proposes to re-allocate the weight to the quality performance category. Examples of potential significant hardships include clinicians lacking internet connectivity, facing “extreme and uncontrollable circumstances,” lacking control over the availability of CEHRT, or lacking face-to-face interactions with patients.
  • Setting the performance threshold at 15 points (compared to 3 during the transition year), the exceptional performance threshold at 70 points, and setting a payment adjustment for the 2020 payment year at a range from -5 percent to (5 percent x budget neutrality scaling factor). The 15 points represents the final score that would earn a neutral MIPS adjustment. CMS proposes to set aside $500 million in total to serve as positive payments adjustments for exceptional performers.
  • Allowing for voluntary public reporting on Physician Compare for excluded clinicians, such as those exempt under the low-volume threshold and clinicians practicing through Rural Health Centers and Federally Qualified Health Centers.
  • Allowing facility-based MIPS eligible clinicians to use hospital’s performance rates as proxy for individual quality and cost performance categories beginning in the 2018 performance period for 2020 payments. For better alignment, CMS proposes to include all measures adopted for the FY 2019 hospital Value-Based Purchasing Program on the MIPS list of quality and cost measures. Groups would also be able to participate at the facility-level if meeting certain requirements. CMS estimates that 17,943 MIPS eligible clinicians and 264 groups would be able to take advantage of this option.

CMS has also proposed a number of updates to the APMs:

  • Extending the general revenue-based risk standard at 8 percent through performance year 2020 for Advanced APMs; the standard would otherwise have risen starting in 2019. CMS is requesting comments on whether this amount should be higher or lower, and whether rural or small practices should have a lower risk standard. The MACRA statute requires that participating APM entities bear financial risk for monetary losses that are in excess of a “nominal amount.” Advanced APMs meet the “nominal amount” requirement either through the 8 percent risk standard, or a 3 percent standard based on the expected expenditures for an APM Entity. 
    • Medical Home Model APM Entities would not have to meet the 8 percent revenue-based standard. Instead, CMS proposes to require an increase of 1 percentage point each year from 2018 to 2021, starting with 2 percent of the average estimated total Parts A and B revenue of all providers/suppliers in participating APM Entities. The risk would top off at 5 percent for performance periods 2021 and later.
    • To better “align” with the Advanced APM (Medicare Option), CMS adds a revenue-based risk amount (also 8 percent) to “Other Payer” (i.e., non-Medicare) Advanced APMs requirements, only to the extent in which risk in the APM entity is based upon revenue. This proposal is in addition to the existing expenditure-based standard.
  • Modifying the timeframe for which payment amount/patient count data are included in Qualifying APM Participant (QP) calculations for Advanced APMs that do not run a full performance period. CMS proposes to only use data from dates of active testing of Advanced APMs, provided the APM operates continuously for a minimum of 60 days during the period. This is instead of using payment amount and patient count data from the whole QP performance period (January 1 through August 31). As previously finalized, QPs meeting the payment or patient count threshold are excluded from MIPS for the year and receive a 5 percent APM Incentive Payment for each qualifying year 2019 through 2024. Eligible clinicians participating in an Advanced APM who do not meet the thresholds are subject to MIPS reporting and payment adjustments.
  • Modifying the timeframe for QP determinations under the All-Payer Combination Option, which is used to make determinations based on both Medicare (i.e., Advanced APM) and Other Payer Advanced APMs starting in payment year 2021. While the Medicare QP determination typically runs from January 1 through August 31, determinations using Other Payer Advanced APMs will run from January 1 through June 30. CMS believes that the additional time between the end of the performance period and the December 1 information submission deadline will allow clinicians to better collect and submit payment and patient information from all payers. CMS is also seeking comments on whether to implement an alternate timeframe of January 1 to March 31.
  • Making QP determinations under the All-Payer Combination Option based on individual clinicians only, although CMS is considering reporting at the group level.

Ultimately, CMS estimates that between 180,000 and 245,000 physicians will participate in an APM in the 2018 performance period.

CMS’s proposed rule is available here, and is scheduled to be published in the Federal Register on June 30, 2017. Comments to the rulemaking must be filed by August 21, 2017. CMS’s fact sheet on the Proposed Rule is available here.

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