On Friday, October 14, the Centers for Medicare and Medicaid Services (CMS) released the much anticipated Final Rule with comment period implementing the Medicare Access and CHIP Reauthorization Act (MACRA).
The Final Rule establishes a new program, the Quality Payment Program (QPP) with two tracks for physicians and other eligible clinicians being paid under Medicare fee-for-service. The first performance year for both tracks of the QPP will be 2017, for payment adjustments in 2019. The Final Rule provides further flexibilities from the proposed rule in order to help clinicians transition into the new payment system.
For the first year of the program, as determined in statute, eligible clinicians will include physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. In response to concerns from stakeholders and small and solo practices, in the Final Rule CMS has eased the low-volume threshold for being exempt from the QPP as an eligible clinician with:
- less than or equal to $30,000 in Medicare Part B allowed charges, or
- less than or equal to 100 Medicare patients.
CMS estimates that this change to the low-volume threshold will result in approximately 32 percent of clinicians being exempt in 2017.
Transition Year - 2017
CMS refers to the first performance year, 2017, as a transition year, providing choices to eligible clinicians to participate in ways appropriate for their practice. The Pick Your Pace provision offers a four ways of participating in 2017 to avoid a negative payment adjustment. Non-reporting in 2017 will lead to an automatic negative adjustment of 4 percent in 2019.
Option 1: Test the program. By reporting one measure each in the quality and improvement activity categories or reporting the measures in the advancing care information category, clinicians can avoid a negative adjustment in 2019.
Option 2: Partially report. By reporting one measure in each performance category for a full 90 days in 2017, clinicians can avoid a negative adjustment and have the opportunity to possibly receive a small positive adjustment in 2019.
Option 3: Fully report. By reporting fully for 90 days to a full year, a clinician can earn a moderate positive payment adjustment and may be eligible for additional payment adjustments as exceptional performers.
Option 4: Participate in an Advanced Alternative Payment Model (AAPM). Those receiving 25% of Medicare payments or seeing 20% of Medicare patients through an AAPM in 2017, can earn a 5% incentive payment in 2019.
Merit-Based Incentive Payment System (MIPS)
Track 1 in the QPP, the Merit-Based Incentive Payment System (MIPS) combines the current Physician Quality Reporting System (PQRS), Value Modifier (VM), and EHR Meaningful Use (MU) programs into one reporting system for eligible clinicians to report and receive positive, negative, or neutral adjustments based on their performance in four categories (Quality, Resource Use, Advancing Care Information, and Improvement Activities). In the Final Rule, CMS indicated it will not include performance in the Resource Use category for 2017. The remaining categories will have the following performance weighting for 2017:
- Quality (60%)
- Advancing Care Information (25%)
- Improvement Activities (15%)
CMS has also lowered the required amount of measures in each category. Quality will include 6 measures, Advancing Care Information will include 5 measures, and eligible clinicians can perform a maximum of 4 activities to receive the highest score. The benchmarks for the measures will be released prior to January 1, 2017.
Track 2 in the QPP includes a 5 percent bonus payment incentive for clinicians who sufficiently participate in Advanced Alternative Payment Models (AAPMs). In the Final Rule CMS has slightly decreased the amount of downside risk associated with a model needed to qualify, but it still remains higher than many current models require. Currently, the models that would qualify in 2017 include:
- Comprehensive ESRD Care (CEC) - Two-Sided Risk
- Comprehensive Primary Care Plus (CPC+)
- Next Generation ACO Model
- ACO Shared Savings Program - Track 2
- ACO Shared Savings Program - Track 3
This list is likely to change prior to January 1, 2017, as CMS establishes new models and amends existing models to comply with the AAPM requirements. The Final Rule indicates CMS intends to amend models like the current Maryland All-Payer Model and Comprehensive Care for Joint Replacement (CJR) model to qualify as AAPMs and will likely reopen the application process for many models to allow for more participants. Considering these updates, CMS estimates approximately 70,000 to 120,000 clinicians will qualify for the bonus payment in 2017 and 125,000 to 250,000 in 2018. The Final Rule also establishes criteria for Physician Focused Payment Models (PFPMs) to be considered by the PFPM Technical Advisory Committee(PTAC) to recommend further models to CMS in the future.
The Final rule is effective January 1, 2017 and CMS will accept comments on the Final Rule for the next 60 days. The release of other final payment rules, such as the Physician Fee Schedule, in the coming weeks, may also include changes to correspond with the QPP implementation, particularly with the implementation of new payment models. CMS intends for QPP to evolve and expand as implementation continues in future years. Beyond 2017, CMS suggests that it will likely continue to propose other transition options in the future in response to stakeholder concerns.
Along with the Final Rule CMS has rolled out many helpful resources for providers to understand and prepare for QPP in 2017.
For more information, please contact one of the following members of the firm's Medicare Physician Payment Working Group: Marty Corry, Monica Massaro or Kelly Carroll in Washington, D.C. at 202.580.7700; Robert Lundy, Charles Oppenheim or Karl Schmitz in Los Angeles at 310.551.8111; or Ben Durie or Felicia Sze in San Francisco at 415.875.8500.