Centers for Medicare and Medicaid Services: Fact Sheet on MACRA Proposed Regulations

The Centers for Medicare and Medicaid Services has published this useful summary of its proposed rule implementing the Medicare Access and CHIP Reauthorization Act (MACRA):

Link to Original Source

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Centers for Medicare and Medicaid Services: Proposed Rule to Implement Medicare Access and CHIP Reauthorization Act (MACRA)

The Centers for Medicare and Medicaid Services (CMS) has published its much-anticipated proposed rule to implement the Medicare Access and Childrens’ Health Insurance Program (CHIP) Reauthorization Act (MACRA), which replaces the Sustainable Growth Rate formula for how fee-for-service or traditional Medicare pays physicians and other clinicians. After annual increases of 0.5% this year through 2019, clinicians will only receive increased Medicare payments through either a Merit Incentive Payment System (MIPS) or through participation in Advanced Alternative Payment Models (APMs). Medicare clinicians meeting the MIPS requirements would receive an additional 4 percent incentive payment beginning in 2019, increasing to 9 percent by 2022.  Medicare clinicians meeting the Advanced APM requirements would receive an additional 5 percent incentive payment beginning in 2019. CMS is calling the new payment mechanisms its Quality Payment Program (MACRA QPP).

The MIPS will combine and replace the existing Physician Quality Reporting System, Physician Value-Based Payment Modifier, and Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals. Under the proposed rule, the MIPS will include payments for:

  • Quality (50 percent of total score in year 1): For this category, Medicare clinicians would choose to report six measures from among a range of options that accommodate differences among specialties and practices; the final list of measures would be published by November 1 of the preceding year
  • Advancing Care Information (25 percent of total score in year 1): For this category, clinicians would choose to report customizable measures that reflect how they use technology in their day-to-day practice, with a particular emphasis on interoperability and information exchange. Unlike the existing reporting program, this category would not require all-or-nothing EHR measurement or redundant quality reporting.
  • Clinical Practice Improvement Activities (CIPAs) (15 percent of total score in year 1): This category would reward clinical practice improvements, such as activities focused on care coordination, beneficiary engagement, and patient safety. Clinicians may select activities (performed for a minimum of 90 days) that match their practices’ goals from a list of more than 90 options (an “inventory” that includes achieving health equity, integrated behavioral and mental health, and emergency preparedness and response). There would be no minimum number of CIPAs required in year 1.
  • Cost (10 percent of total score in year 1): For this category, the score would be based on Medicare claims using two measures: total per costs capita for all attributed beneficiaries and Medicare spending per beneficiary; there would be no reporting requirements for clinicians. This category would use 40 episode-specific measures to account for differences among specialties.

Among the most significant of the changes proposed by the rule is a change to the Medicare EHR Incentive Program. Rather than implementing Stage 3 requirements (currently scheduled for implementation beginning in 2017), MIPS’ Advancing Care Information requirements would:

  • Align with the Office of the National Coordinator for Health Information Technology’s 2015 Edition Health IT Certification Criteria
  • Simplify reporting by no longer requiring all-or-nothing EHR measurement or quality reporting, but revert to a full year reporting requirement rather than a 90-day reporting period
  • Reduce the number of quality measures to an all-time low of 11 measures, down from 18 measures; no longer require reporting on the Clinical Decision Support and the Computerized Provider Order Entry measures
  • Allow physicians and other clinicians to choose to select the measures that reflect how health IT best suits their day-to-day practice
  • Emphasize interoperability, information exchange, and security measures; and promote use of APIs (application program interfaces, or third party programs) that allow patients to access to their health information
  • Exempt certain physicians from reporting when EHR technology is less applicable to their practice, and allow physicians to report as a group.
  • Apply these Advancing Care Information requirements to Medicare clinicians (nurse practitioners, physician assistants, clinical nurse specialists, etc.) who have not been eligible to participate in the Medicare EHR Incentive Program for reporting purposes in year 1 in order to assess how the requirements would be applied in future years

There would not be a parallel change to Stage 3 requirements for eligible providers through the Medicaid EHR incentive program (which continues for some Medicaid providers through 2021), nor to Stage 3 requirements for hospitals under either the Medicare or Medicaid EHR Incentive Programs.

The rule proposes that MIPS payment adjustments for 2019 (year 1) be calculated using 2017 as the performance year.  According, the implementation of MACRA would essentially begin in just eight months, on January 1, 2017. The proposed rule notes that the Assistant Secretary for Planning and Evaluation is conducting studies on the issue of risk adjustment for socioeconomic status on quality measures and resource use, but does not expect to make recommendations until October 2016. Given these timelines, it is unclear whether such risk adjustment will be included in the proposed first performance year.  Quality measure performance data for Medicare eligible clinicians participating in MIPS would become publicly available on CMS’ Physician Compare website.

In the fiscal impact section of the proposed rule, CMS estimates that between 687,000 and 746,000 Medicare clinicians will participate in MIPS in 2019, and that half would receive bonus payments totaling $833 million, while the other half would receive penalties totaling the same amount. However, CMS estimates that solo practitioners would be penalized $300 million and only receive $105 million in bonus payments, while clinicians in groups of 100 or more would receive $529 million in bonus payments and only $57 million in penalties.

Under the proposed rule, Advanced APMs will include Medicare Shared Savings Program Accountable Care Organizations (ACOs), Next Generation ACOs, CMS bundled payment programs, patient-centered medical homes, and the recently announced Comprehensive Primary Care Plus initiative. While most of these programs are funded by or supported by CMS, the proposed rule includes a definition of patient-centered medical homes as one recognized by a national quality organization (National Committee for Quality Assurance, Joint Commission, Accreditation Association for Ambulatory Health Care, or URAC) or a state Medicaid program. Other Payer Advanced APMs also will be recognized (through Medicaid, commercial, or all-payer models) if they meet detailed criteria, including use of certified health IT,  payments tied to MIPS quality measures, and financial risk sharing.

Medicare physicians and clinicians, called qualifying participants (QPs), would be eligible for incentive payments if 25 percent or more of their Medicare payments are paid through an Advanced APM. CMS estimates that between 30,658 and 90,000 qualifying participants would receive between $146 million and $429 million in APM incentive payments in 2019.

The proposed rule does not describe how technical assistance will be made available to Medicare clinicians as required by MACRA, stating that regulatory guidance on that topic will be issued separately.

The proposed rule will be published in the Federal Register on May 9. Comments on the proposed rule are due by June 27, 2016.

Link to Original Source

CMS also has created a video explaining MACRA:

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Centers for Medicare and Medicaid Services: Final Rule for Managed Care in Medicaid and Children’s Health Insurance Program

The Centers for Medicare and Medicaid Services (CMS) has published a final rule, updating requirements for managed care plans funded by Medicaid and the Children’s Health Insurance Program.  The updated requirements are aligned with requirements enacted by the Affordable Care Act that are applicable to the federally-operated and state health insurance marketplaces.  In many of these marketplaces, Medicaid managed care plans are available among the options that health care consumers can choose from.  The updated requirements also are aligned with CMS’ drive towards health care delivery system reform.

Link to Original Source

The final rule will be published in the Federal Register on June 7, 2016.

CMS has published several fact sheets about the final rule, including this fact sheet about strengthening the consumer experience:

Link to Original Source

This fact sheet describes the alignment with Medicare Advantage and private, commercial health coverage:

Link to Original Source

And this fact sheet highlights how the final rule supports state efforts to advance health care delivery system reform:

Link to Original Source

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RWJF-Health Affairs Policy Brief: Medicare’s New Physician Payment System

This Health Affairs-Robert Wood Johnson Foundation policy brief describes the key issues  for implementing the new Medicare physician payment system under the 2015 Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act (MACRA).

In 2014, Medicare paid physicians and other clinicians nearly $138 billion, 22 percent of total Medicare spending. Prior to MACRA’s enactment, physicians were paid based on a fee formula first created in 1989 called the resource-based relative value scale. This scale was based on a complex formula that calculates the amount of physician work required to perform each medical service, factoring in the cost of overhead and malpractice insurance. There were thousands of codes for such medical services maintained by the Centers for Medicare and Medicaid Services (CMS). However, physician groups heavily influenced the fee schedule through the American Medical Association’s Relative Value Scale Update Committee (RUC), which updated the calculations of relative value. The RUC has been dominated by representatives of medical specialty societies. Critics noted the conflicts of interest created through the RUC and that the entire relative value system favored procedure-based specialty care, while undervaluing primary and preventive care.

In 1997, Congress tried to rein in physician-driven costs by creating the Sustainable Growth Rate (SGR) for Medicare payments. The SGR formula set an annual budget target for physician payment based on a number of factors, including that it not exceed the growth in gross domestic product. If Medicare expenditures exceeded the target, fees would be cut in the following year so that overall physician payment would be limited to the target amount. If spending was below the target, fees would be increased in the following year to meet the target amount. In 2002, the SGR formula would have reduced physician payments by 5 percent and so Congress began its retreat from using the formula with a one-year reprieve. That turned into twelve consecutive years of not implementing the SGR formula, eventually accumulating more than $100 billion in physician payments that should have been implemented but were postponed (by 2014, this would have resulted in a 21.2 percent reduction in physician fees).

With the intervening passage of the Affordable Care Act in 2010 as well as other legislation and administrative actions that have increasingly focused on the outcomes of physician performance, Congress finally replaced the SGR with MACRA last year. Under MACRA, Medicare physicians will receive an annual fee increase of 0.5 percent from 2016 to 2019.

From 2020 to 2025, Medicare physicians will no longer receive annual fee increases. The only way to receive additional Medicare payments will be for physicians to participate in one of two newly designed payment mechanisms, either the Merit Incentive Payment System (MIPS) or the Alternative Payment Model (APM). Both base payment on performance and quality metrics and participation in efforts to improve care and restrain cost growth, and will include penalties as well as the potential bonus payments. Physicians who join a CMS-approved APM will get an annual 5 percent increase in their fees from 2019 to 2024. And, starting in 2026, physicians in APMs will receive an annual across-the-board fee increase of 0.75 percent. Beginning in 2026, physicians participating in MIPS will only get a 0.25 percent annual increase.

The Merit Incentive Payment System will consolidate and integrate many existing programs, including the Physician Quality Reporting System, Physician Value-Based Payment Modifier, and Electronic Health Record (EHR) Incentive Program and will require quality measures reporting, use of certified EHRs, and additional pay-for-performance bonuses. MIPS payments will be based on the quality of care (30 percent), resource use (30 percent), meaningful use of certified EHRs (25 percent), and clinical practice improvement activities (15 percent). Maximum bonuses and penalties will be 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022 and beyond. With no annual increases available between 2020 and 2025 through the MIPS, there is a strong financial incentive for every physician to seek to qualify for the the MIPS bonus payments as soon as possible.

The MACRA legislation specifically names both patient-centered medical homes and accountable care organizations (ACOs) as APMs but does not fully define either of those models.  There are currently over 400 CMS-recognized ACOs serving 8 million Medicare beneficiaries. Presumably other CMS-administered APMs such as bundled payments and its recently announced Comprehensive Primary Care Plus initiative also would be recognized. Payments tied to performance through an APM must be at least 25 percent of a physician’s Medicare revenue in 2019, increasing to 75 percent in 2022. By definition, physicians participating in APMs such as ACOs will be eligible for additional payments through shared savings.

With so much at stake and yet to be defined, CMS has begun a regulatory development and  implementation process with numerous opportunities for public comment and engagement. CMS has established a Health Care Payment Learning and Action Network, with multiple work groups developing and publishing frameworks and design concepts.

Some of the critical questions to be answered include:

  • What specific quality measures will be used in the MIPS, and whether they will be aligned with measures used in APMs
  • The use of patient experience surveys and patient-reported outcomes as quality measures
  • The degree and methodology for risk adjustment based on patient mix and health status
  • The level of downside financial risk (potential for penalties) that must be assumed by physicians, with many commentators noting how few of the Medicare ACOs have assumed downside risk options
  • Whether and how Medicare Advantage plans, which now cover one in five Medicare beneficiaries, can be APM entities, when global capitation is one way to control costs (although not necessarily improve quality)
  • How clinical practice improvement activities will be defined and credited (the legislation also authorizes funding for technical assistance, which must be developed and implemented)

Link to Original Source

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California Primary Care Association: California Alternative Payment Methodology Pilot

The California Primary Care Association (CPCA) has been working in partnership with the California Association of Public Hospitals and Health Systems to develop a three-year pilot program for testing alternative payment methodologies (APMs) at California’s Federally Qualified  Health Centers (FQHCs) through California’s Medicaid program, Medi-Cal. The pilot program was authorized by Senate Bill 147, enacted in 2015:

Link to Original Source

Under Senate Bill 147, the pilot program will enroll participating FQHCs on a voluntary basis, guarantee payments no less than under current Prospective Payment System (PPS) rates, and create a supplemental per member per month payment using an APM. The APM may include payments for “alternative encounters” or patient “touches” not currently claimable under the PPS fee schedule, such as email visits, phone visits, group visits, marriage and family therapist visits, integrated primary and behavioral health visits on the same day, community health worker contacts, case management, and care coordination. If a participating FQHCs succeeds in reducing Medi-Cal expenditures for its APM patient population by more than 30% in one of the pilot programs years, the FQHC will be eligible to retain up to the full amount APM payments. The details of the APM are currently being worked out with the state Medi-Cal program. The earliest that the pilot program can be implemented is July 2016.

CPCA has prepared a concept paper describing its approach to developing the APM pilot program. CPCA highlights the need to document the actual costs of alternate encounters for more accurate and comprehensive future payment methodologies. For example, the pilot program will document data related to the social determinants of health that are highly relevant for FQHC patients so that future payment methodologies can make more appropriate patient-based risk adjustments.

Link to Original Source


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Covered California: Quality Improvement Requirements for Qualified Health Plans for 2017-2019

Covered California, the state health insurance marketplace, has adopted strengthened quality reporting and improvement requirements for qualified health plans (QHPs) seeking to sell health insurance through the California marketplace for 2017 through 2019.   The contractual requirements include:

  • QHPs will ensure all consumers either select or are provisionally assigned a primary care clinician within 30 days of effectuation into their plan, so they have an established source of care.
  • Covered California will encourage QHPs to promote enrollment in advanced models of primary care, including patient-centered medical homes and integrated health care models, such as accountable care organizations.
  • QHPs will develop programs to proactively identify and manage at-risk enrollees, with requirements to improve in targeted areas.
  • QHPs will exchange data with providers so that physicians can be notified if their patients are hospitalized and can track trends and improve performance on chronic conditions, such as hypertension or diabetes.
  • QHPs will be required to identify hospitals and providers that are outliers and deliver either poor-quality care or unwarranted high-cost care. Once these providers are identified, health plans will be expected to work with them to improve their care or to lower their costs, and, if they do not and do not provide justification, plans will exclude those hospitals from Covered California networks as early as 2019.
  • Covered California will adopt a payment system for hospitals, such as the one employed by the Centers for Medicare and Medicaid Services (CMS), which, over time, will put at least 6 percent of reimbursement at risk or subject to a bonus payment based on quality performance.
  • QHPs will be required to track health disparities among all their patients receiving care, identify trends in those disparities and reduce the disparities, beginning with four major conditions: diabetes, hypertension, asthma and depression.
  • QHPs will be required to help consumers be active participants in their health care by providing tools to help consumers better understand their diagnoses and treatment options and understand their share of costs for medical services — based on the contracted costs of their plan.

Link to Original Source

Covered California staff prepared a slide presentation for the Covered California board of directors outlining the quality improvement strategy requirements.

Link to Original Source

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Insure the Uninsured Project: Transforming the Health Care Marketplace by Promoting Value

This issue brief from the Insure the Uninsured Project focuses on the role of California’s health insurance marketplace, Covered California, in advancing health care payment and delivery system reform towards value-based payments.  The issue brief makes the case that as an “active purchaser”, Covered California can use its contractual leverage with its qualified health plans (QHPs) to drive them towards value-based payments.

Covered California’s contracts with its QHPs already require the health plans to report their quality data, which is published by Covered California as part of the information consumers have available when they choose health plans in the marketplace. The health plans also must agree to promote the “triple aim” (increasing quality, reducing costs, and improving health outcomes), participate in one or more statewide and national collaborative quality initiatives, and report the share of providers participating and consumers served within quality initiatives.

The issue brief discusses potential ways that value-based payments can be implemented by  Covered California, including pay-for-performance incentives, requiring medical homes or health homes, bundled payments for certain health care services, and reference pricing. Finally, the issue brief notes that Covered California could align its value-based payment strategies with other large purchasers in California, including the state’s Medicaid program, CalPERS (the state’s public retirement system), the University of California, and a number of larger employers based in California.

Link to Original Source

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Insure the Uninsured Project: A Vision for Payment and Delivery System Reform in California

This policy brief from the Insure the Uninsured Project (ITUP) describes a vision for implementation of payment and delivery system reform in California, especially with the continued success of California’s health insurance marketplace and expanded Medicaid in decreasing the number of uninsured Californians.  In California, as of 2013, 78 percent of total state health expenditures were still paid using a fee-for-service (FFS) model, despite the significant presence of managed care health plans in the state health insurance market. Accordingly, improvements in cost, quality, and outcomes will require a systemwide shift from FFS to fee-for-value payment, which also will requires a coordinated effort across payers.

The policy brief begins with an overview of payment and delivery system reform initiatives nationally, many driven by the Centers for Medicare and Medicaid Services using authority and funding from the Affordable Care Act. Initiatives in Medicare, Medicaid, and the commercial market are examined, and there is additional analysis about the impact of such initiatives on safety net providers.

The policy brief then outlines six recommendations for payment and delivery system reforms in California:

  1. Transition from FFS towards global payments for providers that have the capabilities and infrastructure to coordinate care, manage financial risk, and meet clinical quality targets.
  2. Build on California’s history with the “delegated model” of placing greater financial risk on provider organizations and leverage these organizations’ infrastructure and expertise to implement integrated delivery systems and accountable care organizations;
  3. Utilize financial incentives and quality measures to improve the health of vulnerable populations with co-occurring physical and behavioral health conditions that require care coordination;
  4. Deploy the purchasing power of large employers, purchasing coalitions, and Covered California to drive significant changes in the market that reward value over volume and reduce costs.
  5. Advance consumer-driven health care to promote competition among providers and health plans by making cost and quality information easily available and meaningful.
  6. Implement regulatory oversight of anticompetitive behavior among providers, which drives prices upward without increasing the value.

Link to Original Source

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Centers for Medicare and Medicaid Services: Technical Guidance for Marketplaces to Ensure Meaningful Access by Limited-English Proficient Speakers

The Centers for Medicare and Medicaid Services (CMS) has provided updated technical guidance to health insurance marketplaces, qualified health plans, and online health insurance brokers for ensuring meaningful access to their products and services by individuals with limited English proficiency (LEP) under various federal laws, including the Affordable Care Act.  The technical guidance includes an updated list of the top 15 languages other than English spoken in each state and translations of standardized “taglines” in 63 languages. The translated taglines explain that information is available in those languages (either through written translations or through oral interpretation of English language written materials).

For the 2017 open enrollment period, health insurance marketplaces, qualified health plans, and online brokers must use translated taglines on their websites and written enrollment materials for the top 15 languages spoken in each state.

Moreover, health insurance marketplaces, qualified health plans, and online brokers are required to provide full translation of their websites if 10 percent or more of the population residing in that state that speaks a language other than English. This requirement applies to California and Texas, requiring translation into Spanish.

Finally, qualified health plans must provide the translated taglines in summaries of benefits and coverage, and in member claims and appeals documents, in each county served by that health plan where the 10 percent or more of the population speaks a language other than English. This requirement applies to qualified health plans in specified counties in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Texas, Virginia, Washington, and Puerto Rico and requires the translated taglines in Spanish, Navaho (in one county in Arizona), Chinese (in San Francisco), and Tagalog (in two counties in Alaska).

Here is the list of the top 15 languages spoken in each state:

Link to Original Source

And here are tag lines translated into 63 languages:

Link to Original Source

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Centers for Medicare and Medicaid Services: Comprehensive Primary Care Plus Model Announced

The Centers for Medicare and Medicaid Services (CMS) has announced another new innovation model for Medicare beneficiaries, the Comprehensive Primary Care Plus (CPC+) model, intended to continue the quality improvements achieved through the multi-payer CPC begun in 2012 in seven regions, with about 500 participating practices. The model will be considered an alternative payment model (APM) to advance progress on the U.S. Department of Health and Human Services goal of linking 50 percent of Medicare fee-for-service payments to APMs by the year 2018.

CMS will first accept applications from other payers (for example, state Medicaid programs and commercial payers) to align with the CPC+ model. CMS believes that like the CPC, the CPC+ model will work best where there is alignment among multiple payers in a region/market, using similar quality measures and payment incentives.

After CMS determines where it would have appropriate payer partners to implement this multi-payer model (expected by July 2016), then CMS will accept applications from Medicare fee-for-service providers in those regions to agree to one of the two alternative payment “tracks”. CPC+ Track 1 will remain primarily a fee-for-service payment but participating providers will be eligible for an additional care management fee of $6 to $30 per Medicare beneficiary per month (depending on the health risk scores of the beneficiaries) as well as an additional, pre-paid incentive payment of $2.50 per beneficiary per month for achieving quality improvement goals (the incentive payment must be returned if the quality improvement goals are not met).   CPC+ Track 2 providers will be eligible for a care management fee of $9 to $100 per Medicare beneficiary per month (with higher health risk scores among their patients), incentive payments of $4 per beneficiary per month, an up-front capitated payment for estimated evaluation and management fees (“comprehensive primary care payments”), and then fee-for-service payments for any non-evalaution and management claims. Track 2 providers also must secure agreements with their health IT vendors for electronic health record systems that will support the documentation and reporting required to calculate the payments. These higher care management fees and incentive payments, as well as moving most evaluation and management fees to a capitated rate, make Track 2 a risker payment model for providers.

The quality and utilization measures will reflect CMS’ model for Comprehensive Primary Care and will address five areas of improvement: (1) Access and Continuity; (2) Care Management; (3) Comprehensiveness and Coordination; (4) Patient and Caregiver Engagement; (5) Planned Care and Population Health.

CMS plans to designate approximately 20 regions to enroll about 2,500 participating providers in Track 1 and another 2,500 providers in Track 2.  CMS estimates that this will mean the participation of  20,000 clinicians and 25 million Medicare beneficiaries in the model. CPC+ will be launched in 2017, and will be a five-year initiative.

Here is the Request for Application for payer partners:

Link to Original Source

Here is a Frequently Asked Questions about the CPC+:

Link to Original Source

CMS will be conducting a series of informational webinars to describe the CPC+ initiative.

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