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BREAKING: MACRA Final Rule Released

October 14, 2016
by Rajiv Leventhal
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Sweeping changes for Medicare physician reimbursement are in store as federal officials look to ease eligible clinicians into the new outcomes-based program

The Department of Health & Human Services (HHS) has finalized the highly-anticipated Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Final Rule, in which eligible Medicare physicians will be paid for the quality of care they deliver, via the government’s Quality Payment Program, which replaces the Sustainable Growth Rate (SGR) for physician reimbursement.

The Final Rule, released publicly on Oct. 14, and nearly 2,400 pages in length, aims to create a more modern, patient-centered Medicare program by promoting quality patient care while controlling escalating costs through the Merit-Based Incentive Payment System (MIPS) and incentive payments for Advanced Alternative Payment Models (Advanced APMs), according to a blog post from Andy Slavitt, Centers for Medicare & Medicaid Services (CMS) Acting Administrator.

The MIPS path is designed for providers in traditional, fee-for-service Medicare, and who can thus ease their way in. The advanced APM track is designed for providers who are participating in specific value-based care models already.

“Today, we’re proud to put into action Congress’s bipartisan vision of a Medicare program that rewards clinicians for delivering quality care to their patients,” HHS Secretary Sylvia M. Burwell said in a statement. “Designed with input from thousands of clinicians and patients across the country, the new Quality Payment Program will strengthen our health care system for patients, clinicians and the American taxpayer.”

According to an HHS press release, the Final Rule is “informed by a months-long listening tour with nearly 100,000 attendees and nearly 4,000 public comments. A common theme in the input HHS received was the need for flexibility, simplicity, and support for small practices. And that’s what this final policy aims to provide.”

Last month, federal officials announced flexibilities that will allow eligible Medicare physicians to pick their pace of participation for the first performance period of the outcomes-based program that begins Jan. 1, 2017 that aim to allow physicians to ease into the program without getting hit with negative payment adjustments right away.

In the blog post, Slavitt said that “Other than a 0.5 percent fee schedule update in 2017 and 2018, there are very few changes when the program first begins in 2017. If you already participate in an advanced APM, your participation stays the same. If you aren’t in an advanced APM, but are interested, more options are becoming available. If you participate in the standard Medicare quality reporting and Electronic Health Records (EHR) incentive programs, you will find MIPS simpler. And, if you see Medicare patients, but have never participated in a Medicare quality program, there are paths to choose from to get started. The first couple of years are aimed at getting physicians gradually more experienced with the program and vendors more capable of supporting physicians. We have finalized this policy with a comment period so that we can continue to improve the program based on your feedback.”

More specifically, in the MIPS track, payment adjustments in the first year will be neutral, positive or negative up to 4 percent. This will grow to 9 percent by 2022. So essentially, as long as eligible physicians report to some measure or activity in 2017, they will not be dinged with a 4 percent payment penalty. For the APM track, clinicians who receive 25 percent of Medicare payments or see 20 percent of their Medicare patients through an advanced APM in 2017, then they earn a 5 percent incentive payment in 2019.

CMS officials also said the agency intends to broaden opportunities for clinicians, including small practices and specialties, to participate in these kinds of initiatives. For example, according to the HHS press release, a major opportunity being considered for 2018 will be the new accountable care organization (ACO) Track 1+ model that provides more flexibility for clinicians, with lower levels of risk than other ACOs. CMS is also reviewing reopening some existing advanced APMs for application to allow more clinicians to join these types of initiatives. In 2018, CMS expects about 25 percent of eligible clinicians will be a part of the second path of advanced alternative payment models.

And, according to Slavitt’s blog post, specifically for specialists, in addition to oncology and nephrology, the agency recently proposed allowing participants in new cardiac and orthopedic bundled payment models the possibility to qualify as advanced APMs beginning in 2018.

Help for Small Practices

There has been no shortage of conversation about solo and small practices’ ability to thrive, and even survive, under MACRA’s rules. A Black Book survey from June revealed that two-thirds of high Medicare-volume small practices said they foresee the end of their independence due to the physician payment changes that will take place under MACRA.

In today’s announcement, federal officials said MACRA provides $20 million each year for five years to train and educate Medicare clinicians in small practices of 15 clinicians or fewer and those working in underserved areas. Beginning December 2016, local, experienced organizations will offer free, on-the-ground, specialized help to small practices using this funding.

What’s more, Slavitt said that CMS is taking additional steps to aid small practices, including: reducing the time and cost to participate, excluding more small practices (the new policy will exclude an estimated 380,000 clinicians), increasing the availability of advanced APMs to small practices, allowing practices to begin participation at their own pace, changing one of the qualifications for participation in Advanced APMs to be practice-based as an alternative to total cost-based. “Due to these changes, we estimate that small physicians will have the same level of participation as that of other practice sizes,” the blog post read. Indeed, those practices which fall below the requirements of at least $30,000 Medicare Part B charges or 100 Medicare patients are exempt from participating in 2017.

A One-Stop-MACRA-Shop

In his blog, Slavitt noted that much of stakeholder feedback centered on simplified scoring, better feedback, and clear rules. To this end, the government says it is simplifying requirements for the two quality components of the program—the quality measures and practice-specific improvement activities. They are also moving to align the measurement of certified EHR technology with the improvement activities. The statement read, “This will begin 2017 with a portion of the Advancing Care Information measures; we intend to align more of these measures with quality in later years, to further ensure that certified EHRs are being used to support high-quality care. We also narrowed the focus to those measures that support hospitals and physicians safely and securely exchanging information, and we expect both registries and certified EHRs to move to make reporting more ‘push button,’ making such reporting easier for clinicians.”

Finally, CMS is rolling out the new Quality Payment Program website, which will explain the new program and help clinicians identify the measures and activities most meaningful to their practice or specialty.

Federal officials have said that the rule will have a 60-day comment period where more changes could be made. Healthcare Informatics will have more coverage as this story continues to unfold.


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Healthcare Industry Could Save $12.4B With Full Adoption of Electronic Transactions

January 17, 2019
by Heather Landi, Associate Editor
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The healthcare industry continues to make progress automating business processes, but significant gaps remain, representing an opportunity for $12.4 billion in savings through further automation, according to new data from the 2018 CAQH Index.

Electronic adoption and transaction volume increased in 2018, with several common transactions reaching 80 percent electronic adoption across the sector, according to the latest CAQH Index. This progress resulted in a narrowing of the cost savings opportunity for the first time in CAQH Index history.

CAQH is a Washington, D.C.-based non-profit alliance of health plans and trade associations. The findings from the 2018 CAQH Index are based on voluntary nationwide surveys of providers, as well as commercial medical and dental health plans. Participating medical health plans represent over 160 million covered lives—nearly 49 percent of the commercially insured U.S. population—and 7.8 billion transactions conducted in 2018.

The sixth annual CAQH Index is an annual report tracking the adoption of HIPAA-mandated and other electronic administrative transactions between healthcare providers and health plans in the medical and dental industries. These transactions include verifying a patient’s insurance coverage, obtaining authorization for care, submitting a claim and supplemental medical information and sending and receiving payments. The CAQH Index also estimates the annual volume of these transactions, their cost and the time needed to complete them.

By benchmarking progress, industry and government can more easily identify barriers that may be preventing stakeholders from realizing the full benefit of electronic administrative transactions. These insights can prompt new initiatives to address and reduce barriers. For the report, data was submitted by medical and dental plans that cover roughly half of the insured population in the United States and providers representing a range of specialties.

After reporting modest progress over the past few years, the 2018 CAQH Index findings suggest more positive change is occurring in the industry overall. Healthcare industry stakeholders made progress on many fronts this year—in adoption of electronic transactions, reductions in the volume of manual transactions and reductions in the remaining savings opportunity.

“The results highlighted in the 2018 Index are encouraging,” Kristine Burnaska, director of research and measurement at CAQH, said in a statement. “Both providers and health plans are saving time and reducing administrative costs, but more effort is needed to significantly reduce the volume of expensive, time consuming manual processing.”

While the overall volume of transactions in the medical industry increased by 18 percent in the past year, the volume of manual transactions declined, falling 6 percent for health plans and 1 percent for providers, according to the CAQH Index.

Medical industry adoption of electronic eligibility and benefit verification increased six percentage points to 85 percent in 2018; adoption of electronic coordination of benefits rose to 80 percent in 2018, up from 75 percent in 2017. Adoption of electronic claim submission stands at 96 percent and 71 percent of healthcare organizations have adopted electronic claim status inquiries.

However, the healthcare industry made little progress in the adoption of other electronic administrative transactions—only 12 percent of organizations have adopted electronic prior authorization, although that is up from 8 percent the year before. Adoption of electronic claim payment stands at 63 percent and less than half of healthcare organizations (48 percent) have adopted electronic remittance advice processes.

However, continued efforts are needed to significantly reduce the volume of expensive, time-consuming manual transactions and adapt to the changing administrative needs of the healthcare system, according to the CAQH Index. The Index estimates that the medical and dental industries could save an additional $12.4 billion annually with full adoption of electronic administrative transactions, particularly through greater automation by providers, which could save an additional $8.5 billion.

During a period of rising transaction volume, the medical industry shaved $1.3 billion from its savings opportunity, bringing it to $9.8 billion.

The Index also highlights a substantial rise in overall transaction volume, growing in parallel with industry complexity. As these trends persist, the Index finds that the industry would benefit from updated standards, operating rules, infrastructure and functionality that can accommodate the increase in volume and growing complexity associated with the need to connect administrative and clinical data elements in value-based payment models.

“The industry is making progress,” April Todd, senior vice president, CORE and Explorations at CAQH, said in a statement. “But, we are at an inflection point where processes and technology must adapt to a healthcare system that is transitioning to value-based payment and becoming increasingly complex.”

The CAQH Index notes that industry complexity is growing in parallel with transaction volume. “As these trends persist, the industry will benefit from standards, operating rules, infrastructure and functionality that can accommodate both the increase in volume and the growing complexity associated with varying plan and payment models designed to increase the value and quality of healthcare for consumers. There is a need for all stakeholders to support initiatives that lay the groundwork for the future,” the report authors wrote.

The CAQH Index also issued a number calls to action for the healthcare industry, including focusing efforts to address cost savings opportunities. Several transactions offer the greatest potential for savings and should be the subject of attention—transactions include eligibility and benefit verification, claim status, remittance advice and prior authorization. The medical industry could save an additional $4 billion on eligibility and benefit verifications and $2.6 billion on claim status transactions by fully adopting electronic transactions, according to the CAQH Index.

CAQH also recommends accelerating standards and operating rule development and encouraging timely vendor adoption of standards and operating rules.

 

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Has CMS Just Tipped the Scales Towards Provider Alienation, in its ACO Final Rule?

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CMS’s release of its final rule on MSSP ACO participation has pushed the healthcare industry into a very fraught moment in the ongoing evolution of the ACO experiment

As Healthcare Informatics Associate Editor Heather Landi reported on Dec. 21, that morning, “The Centers for Medicare & Medicaid Services (CMS) on Friday morning published a final rule that makes sweeping changes to the Medicare Shared Savings (MSSP) Accountable Care Organization (ACO) program, with the goal to push Medicare ACOs more quickly into two-sided risk models.”

Indeed, as Landi noted in her report, “Referred to as ‘Pathways to Success,’ the Trump Administration’s overhaul of Medicare’s ACO program will redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.”

And, Landi noted, “Currently, the MSSP model includes three tracks and is structured to allow ACOs to gain experience with the program before transitioning to performance-based risk. The vast majority of Shared Savings Program ACOs have chosen to enter and maximize the allowed time under Track 1, which is an ‘upside-only’ risk model. MSSP Tracks 2 and 3 involve downside risk, but participation in these tracks has been limited thus far.”

One of the biggest points of contention in recent months as centered on how aggressive a push on the part of CMS to compel providers forward into two-sided risk would be desirable, or even wise. Some in the industry tried to put a positive spin on the “low-income” element of the program, with that term referring to smaller physician groups choosing to participate in the MSSP. On Friday morning, in response to the final rule, Travis Broome, vice president of policy at Aledade, a Bethesda, Md.-based company focused on physician-led ACO development, tweeted, “One more change to Basic. Low-revenue ACOs will be able to stay in 1-sided risk for 3 years. Difference [between] 2 & 3 years is big. The decision to take risk is made summer before the year starts. So 2 years of 1-sided risk meant making the risk decision before year 1 results even came in.”

But in a statement from the National Association of ACOs (NAACOS), an association comprised of more than 360 ACOs, Clif Gaus, Sc.D., NAACOS’s president and CEO expressed concern that CMS retained the two-year limit for other ACOs. “Becoming a well-functioning ACO takes time and requires building of IT infrastructure, hiring care coordinators, changing the culture of providers, among other tasks. Under CMS’s proposed rule, many ACOs would have just a single year of performance data available to them before evaluating the required move to risk in their third year of the program,” Gaus stated.

Gaus did include a conciliatory note in his statement, saying that "We appreciate CMS' effort in the final rule to provide greater stability to the Medicare Shared Savings Program with five-year agreement periods and more flexibility through waivers for telehealth and skilled nursing facility stays. We look forward to working with CMS to ensure that the Medicare Shared Savings Program, which has a track record of saving taxpayer hundreds of millions of dollars while demonstrably improving care for patients, continues to attract new participants and reap savings." NAACOS has been among the most vocal of healthcare professional associations this year, as CMS Administrator Seema Verma has intensified her call for providers to move forward quickly into more advanced forms of alternative payment models.

But, choosing not to sound any notes of conciliation on Friday, was the Chicago-based American Hospital Association, the largest U.S. hospital association, representing nearly 5,000 hospitals nationwide. A statement attributed to Tom Nickels, AHA vice president, on Dec. 21, said, “Today’s final rule will not be helpful in the move toward value-based care. None of the actions taken today will better empower ACOs to maximize their contribution to patient care and are not pathways for improving the value of the program for patients. We remain opposed to CMS drastically shortening the length of time in which ACOs can participate in an upside-only model. Hospitals and health systems have asked for a more gradual pathway because building a successful ACO that is able to take on financial risk requires significant investments in time, effort and finances.”

Further, the AHA statement said, “While CMS made some improvements to its shared savings rate policies from the proposed rule, they still are not sufficient to appropriately reward ACOs for improving quality and reducing costs. We are particularly concerned about the impact of these and other policies on high-revenue ACOs. We do appreciate that CMS took certain steps to expand participants’ ability to provide care to beneficiaries – for example, via telehealth and longer agreement periods.”

And, the AHA said, “As a whole, the policies in the rule will likely result in a significant decrease in program participation. That would be unfortunate, as we seek to transform care to better serve our patients and communities.”

While the Centers for Medicare & Medicaid Services (CMS) finalized some improvements to the Medicare Shared Savings Program (MSSP), the Premier healthcare alliance is extremely concerned that these are overshadowed by unrealistic expectations of the speed at which providers can transition to risk-based tracks, the un-level playing field created for hospital-led vs. physician-led ACOs and the imbalance of risk vs. reward.

Meanwhile, leaders at the Charlotte-based Premier Inc. were equally critical. In a statement released on Friday, Blair Childs, Premier’s senior vice president of public affairs said that while “Premier appreciates that CMS finalized the extension of waivers and the longer agreement period and heard our concerns about the reduction in shared savings,” “We are extremely disappointed, however, that CMS has moved forward in creating an unlevel playing field that disadvantages high-revenue ACOs—primarily hospital-led ACOs. Premier and other stakeholders, including MedPAC, oppose this policy,” the statement read. “Hospital-led ACOs in Premier’s Population Health Management Collaborative performed twice as well as all the other ACOs nationally. CMS should be taking steps to enhance, not limit, the inclusion of all innovative providers that are seeking to move to value-based care. For an Administration that has been outspoken in advocating for market solutions and level playing fields among competitors, it’s an enormous mistake to finalize a policy that pits providers against each other rather than focusing on collaboration, as the model intends.”

So, where does this leave the industry? Quite possibly, at an important inflection point, now that what was a proposed rule is now a final rule. One could argue this situation from a number of standpoints, but the bottom line is simple: in her desire to push providers forward quickly and decisively into two-sided risk—and even with the carrot-like incentives for smaller physician groups that have been added—Administrator Verma is now strongly risking a massive wave of defections from the MSSP.

As NAACOS’ Gaus noted in his statement, “Under CMS's proposed rule, many ACOs would have just a single year of performance data available to them before evaluating the required move to risk in their third year of the program.” Perhaps similarly importantly, he noted, "Although we are pleased that CMS finalized a new, limited exception to its high-low policy, we remain concerned that the high-low revenue ACO distinction could deter providers who want to embark on the path of value-based care and could unintentionally harm physician-led ACOs. We urged CMS in the rulemaking process to provide an equal playing field for all ACOs and will continue to advocate for changes to this policy. A NAACOS analysis of how ACOs would be classified under CMS's proposed definitions found almost 20 percent of physician-led ACOs would be considered high revenue ACOs. Furthermore, federally qualified health centers and rural health clinics would also have a fair proportion of high revenue ACOs.”

So, here we come to a very tricky set of issues. First, the entire point of adding in the “low-income ACO” distinction was to encourage more physician groups to join the MSSP; and that would be very important for the survival and thriving of the program, since the participation of hospital-based organizations has been slow to date, and one key way to encourage participation by all types of patient care organizations would be to be able to boast about rapidly increasing participation. But if, as Gaus has noted, NAACOS’ analysis finds that nearly 20 percent of physician-led ACOs would actually end up being “high-revenue ACOs,” that could indeed complicate CMS’s attempts to quickly gain new participants.

Further, the short period of time between initial participation and having to decide whether to stay in the voluntary program and take on mandated two-sided risk, poses one of the most serious barriers to increased participation; and therein lies the real rub for CMS, because if this final rule ends up causing mass defections in the next two years, the agency’s signature and largest federal ACO program could begin to fall apart, precisely at the time that Administrator Verma, Health and Human Services Secretary Alex Azar, and all their fellow senior federal healthcare policy officials, would be hoping to accelerate the shift from volume to value in U.S. healthcare, and prove that the broad ACO experiment is working.

On the other hand, it’s also true that if CMS allows the forward evolution of the MSSP program to progress too slowly, that could cause members of Congress and their staffs to determine that voluntary programs simply aren’t cutting it, and move towards massive Medicare cuts instead, in an attempt to get better control of overall U.S. healthcare inflation, at a time when all discretionary spending in the federal budget is increasingly becoming politically fraught.

For the time being, there is no simple answer to any of this. It’s as though the levers of power and influence must be used in an exquisitely calibrated way. There seems to be no “Goldilocks pace” of change here that will both maximize new participation, and ongoing participation, in the MSSP program, on the part of wary providers, and yet also fulfill all the demands and desires of senior federal healthcare policy officials. Only time will tell, but this moment feels more fraught than ever, in the ongoing evolution of the ACO experiment. There’s no doubt that 2019 could be a determinative year for MSSP.

 

 

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CMS: 93% of Clinicians Get Positive Payment Adjustments for MIPS Year 1

November 8, 2018
by Rajiv Leventhal, Managing Editor
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Ninety-three percent of MIPS (Merit-based Incentive Payment System)-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment, according to a CMS (Centers for Medicare & Medicaid Services) announcement today.

The first year of MIPS under MACRA’s Quality Payment Program (QPP) was dubbed by CMS as a “pick your pace year,” which essentially enabled clinicians to avoid payment penalties as long as they submitted at least the minimum amount of quality data. As such, in its announcement, CMS did admit that the overall performance threshold for MIPS was established at a relatively low level of three points, and the availability of “pick your pace” provided participation flexibility through three reporting options for clinicians: “test”, partial year, or full-year reporting.

CMS said that 93 percent of MIPS-eligible clinicians received a positive payment adjustment for their performance in 2017, and 95 percent overall avoided a negative payment adjustment. CMS specifically calculated that approximately 1.06 million MIPS-eligible clinicians in total will receive a MIPS payment adjustment, either positive, neutral, or negative. The payment adjustments for the 2017 program year get reflected in 2019.

Breaking down the 93 percent of participants that received a positive payment adjustment last year, 71 percent earned a positive payment adjustment and an adjustment for exceptional performance, while 22 percent earned a positive payment adjustment only. Meanwhile, just 5 percent of MIPS-eligible clinicians received a negative payment adjustment, and 2 percent received a neutral adjustment (no increase or decrease).

Of the total population, just over one million MIPS-eligible clinicians reported data as either an individual, as a part of a group, or through an Alternative Payment Model (APM), and received a neutral payment adjustment or better. Additionally, under the Advanced APM track, just more than 99,000 eligible clinicians earned Qualifying APM Participant (QP) status, according to the CMS data.

CMS Administrator Seema Verma noted on the first pick-your-pace year of the QPP, “This measured approach allowed more clinicians to successfully participate, which led to many clinicians exceeding the performance threshold and a wider distribution of positive payment adjustments. We expect that the gradual increases in the performance thresholds in future program years will create an evolving distribution of payment adjustments for high performing clinicians who continue to invest in improving quality and outcomes for beneficiaries.”

For 2018, the second year of the QPP, CMS raised the stakes for those participating clinicians. And in the third year of the program, set to start in January 2019, a final rule was just published with year three requirements. Undoubtedly, as time passes, eligible clinicians will be asked for greater participation at higher levels. At the same time, CMS continues to exempt certain clinicians who don’t meet a low-volume Medicare threshold.

Earlier this year, CMS said that 91 percent of all MIPS-eligible clinicians participated in the first year of the QPP, exceeding the agency’s internal goal.

What’s more, from a scoring perspective in 2017, the overall national mean score for MIPS-eligible clinicians was 74.01 points, and the national median was 88.97 points, on a 0 to 100 scale. Further breaking down the mean and median:

  • Clinicians participating in MIPS as individuals or groups (and not through an APM) received a mean score of 65.71 points and a median score of 83.04 points
  • Clinicians participating in MIPS through an APM received a mean score of 87.64 points and a median score of 91.67 points

Additionally, clinicians in small and rural practices who were not in APMs and who chose to participate in MIPS also performed well, CMS noted. On average, MIPS eligible clinicians in rural practices earned a mean score of 63.08 points, while clinicians in small practices received a mean score of 43.46 points.

Said Verma, “While we understand that challenges remain for clinicians in small practices, these results suggest that these clinicians and those in rural practices can successfully participate in the program. With these mean scores, clinicians in small and rural practices would still receive a neutral or positive payment adjustment for the 2017, 2018, and 2019 performance years due to the relatively modest performance thresholds that we have established. We will also continue to directly support these clinicians now and in future years of the program.”

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