[co-author: Mara McDermott]*

In Depth

On May 24, 2018, the Centers for Medicare & Medicaid Services (CMS) announced that it was opening a module for Medicare Advantage plans to request advanced alternative payment model (APM) status for certain provider contracts. This process will determine which Medicare Advantage arrangements qualify as other payer advanced APMs for purposes of the Quality Payment Program (QPP) (also referred to as the Medicare Access and CHIP Reauthorization Act, or MACRA). Plans interested in reporting this information for 2019 must do so by June 4, 2018.

The Context for Other Payer Advanced APMs

The MACRA statute created two traditional Medicare payment options for eligible clinicians: the merit-based incentive payment system (MIPS) and advanced APMs. Clinicians in MIPS are paid fee-for-service but, over time, have an increasing percentage of their payments tied to performance in four areas: quality, cost, clinical practice improvement activities and promoting interoperability. (Promoting interoperability was previously named “advancing care information,” a modified version of the predecessor program, meaningful use.) On a second track, eligible clinicians may elect to participate in advanced APMs. In this track, qualifying participants may receive a 5 percent bonus on their Part B revenue.

Pursuant to the MACRA statute, advanced APMs must meet certain qualifying criteria. Only certain types of traditional Medicare models may qualify, including Innovation Center demonstrations, Medicare Shared Savings Program accountable care organizations (ACOs) and demonstrations required by federal law. The models must then meet statutory criteria requiring that they:

• Use quality measures comparable to MIPS
• Use Certified Electronic Health Records Technology (CEHRT)
• Bear more than nominal financial risk, or are a qualifying medical home

Applying these requirements to the existing portfolio of CMS-approved models resulted in only a handful of qualifying advanced APMs.

Once an entity is in a qualifying model, it must also meet certain revenue or patient count thresholds to receive the advanced APM bonus. For the first two performance years (2017 and 2018), APM entities are required to meet a Medicare Part B revenue or patient count threshold. For example, in 2017 and 2018, using the revenue threshold option, the entity would be required to receive 25 percent of its Part B revenue through the APM. Beginning in 2019, the revenue thresholds increase to 50 percent and later to 75 percent. Participants also have the option to use patient counts, which are set at slightly lower percentages.

Beginning in the 2019 performance year, clinicians have the option to combine their participation in a Medicare Part B qualifying model with “other payer” risk contract participation to reach the applicable thresholds to qualify for the advanced APM bonus. CMS labeled this the other payer combination option. Note that bonus payments for the 2019 performance year are paid in 2021.

Reporting Other Payer Advanced APM Information to CMS

In general, other payer advanced APM contracts are required to meet the same criteria as traditional Medicare advanced APMs. However, because CMS does not routinely have access to this type of information from other payers, the agency had to develop a mechanism to collect the relevant information from plans and/or clinicians.

Consistent with this goal, on May 24, 2018, CMS announced that it was opening the module for Medicare health plans to submit contract information that would facilitate the agency’s determination of whether the arrangements meet the statutory and regulatory requirements to qualify as an other payer advanced APM. (Note that “other payer” types include Medicaid, Medicare Health Plans and commercial payers. This guidance refers to Medicare Health Plan submissions.)

CMS also released a guide detailing the steps involved in submitting information to CMS. To have an arrangement designated as an other payer advanced APM, plans will need to submit the following:

• Information describing payment arrangement, including the name of the arrangement, types of participants, and the locations where the arrangement is offered
• Information to support the advanced APM determination, including an indication of whether at least 50 percent of eligible clinicians are required to use CEHRT, whether MIPS-comparable quality measures are used, and details on how the arrangement meets the nominal risk standard
• Relevant supporting documentation, which may include contracts and participant agreements
• Certification statement by the individual submitting the information that it is true, accurate and complete

For the 2019 QPP performance year, payer submissions are due June 4, 2018. CMS will make these determinations on an annual basis in the years to come. CMS anticipates that it will post the list of qualifying other payer advanced APMs on its website by September 2018. The agency will offer an additional opportunity for eligible clinicians to submit other payer payment documentation in September of the applicable performance period.

Analysis

The other payer advanced APM option is intended to give eligible clinicians an additional mechanism to meet MACRA’s escalating revenue and patient count thresholds to qualify for the 5 percent APM bonus. While this pathway may create additional opportunities for some clinicians to become advanced APM qualifying participants, the option also raises key considerations for plans and providers.

First, there are business and legal considerations for plans and clinicians in disclosing contract information to CMS. The agency has not historically examined contracts between Medicare Advantage plans and provider organizations. The disclosure contemplated in the advanced APM module includes fairly specific information about how plans pay providers, as well as other aspects of plan contracts. A plan representative also must certify the accuracy and completeness of the information. Plans should carefully weigh the benefits and risks of disclosing this information to CMS. In addition, because CMS indicates that it will post qualifying model names to its website, plans may want to consider the business implications of that public information.

Second, because the other payer advanced APM option is intended to assist those already participating in traditional Medicare advanced APMs, interest in this option may be limited to those providers involved in, or planning to join, the narrow set of qualifying advanced APMs. This may make it easier for plans to identify and narrow the types of arrangements that they plan to submit to CMS for consideration. However, until CMS expands the portfolio of qualifying advanced APMs, the impact of the other payer combination option will be limited to a somewhat narrow universe of clinicians.

Finally, the timeframe for submitting information to CMS is compressed. CMS announced the module opening just before the Memorial Day holiday, and the deadline for submissions is June 4, 2018, meaning there is limited time for plans to gather and submit the necessary materials. Furthermore, each arrangement requires a distinct submission. Plans that want to use this opportunity will need to move quickly to complete the submissions.

*This On the Subject was co-authored by Mara McDermott, Vice President at McDermott+Consulting.