Life Science Compliance Update

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November 28, 2016

Part One: MACRA Overview and MIPS


In its final MACRA rule, CMS significantly revamped the physician pay rule to make it easy for physicians to avoid penalties and to earn bonuses, and the agency is leaving the final rule open for comment to make it easier to revise. Among the changes, physicians need only report on one quality measure in each of two categories next year to avoid penalties, a third of practices are exempted from the program entirely, and there is a new alternative pay model option aimed at making it easier for small practices to qualify for the 5 percent bonus that comes with being counted as an alternative pay model.

MACRA: An Overview

The Medicare Access and CHIP Reauthorization Act (MACRA) creates two paths for physicians in the Quality Payment Program (QPP). Either physician performance is measured by the Merit-based Incentive Payment System (MIPS) or they earn enough revenue from alternative pay models to receive the 5 percent bonus on Part B revenues. Although the law refers to them as APMs, CMS calls them advanced APMs to distinguish them from what the agency generically calls alternative pay models, many of which do not include penalties and therefore do not qualify for the bonus. Although physicians in APMs are not subject to MIPS, they must participate in quality programs comparable to those in MIPS.

“In 2017, we estimate that we will pay approximately $1 billion in bonuses for high quality care to clinicians in both advanced APMs and MIPS,” Acting CMS Administrator Andy Slavitt said.

That $1 billion estimate is for the first payment year of the program (2019), but it’s based on performance in 2017. CMS estimates about $200 million to $320 million in pay hikes will be awarded to clinicians who participate in MIPS, plus $500 million in MIPS exceptional performance payments. The law authorizes the additional $500 million, and that money is separate from the MIPS pool created by penalties. CMS also estimates that clinicians who qualify for APM bonuses will receive between about $330 million to $570 million in 2019.

One of the key takeaways from that CMS guidance is that QPP will shift providers' risk in the program from reporting to performance. Once the low risk 2017 performance year ends, QPP will quickly increase the risk that providers face. As more providers move into the APM track—and the MIPS track becomes more competitive—providers will need a solid strategy for driving toward high performance.

To that end, providers should not view 2017 as a year off. The flexibility CMS offers for 2017 should be viewed as an opportunity to reexamine strategy for Medicare risk-based payment models, reassess and synchronize performance improvement efforts, and ensure that any MACRA related investments are positioning the organization well for long term success.


Some Key Highlights


  • The Final Rule removes the negative payment adjustment under MIPS in 2017 by allowing clinicians to submit one quality measure, or one improvement activity, or the required measures in the advancing care information category to avoid a penalty.
  • The Final Rule allows for a flexible, pick-your-own-pace approach in the first year.
  • Small clinicians are afforded relief under the raised low-volume threshold. CMS also finalized a plan to set aside $20 million per year for five years to help support and train physicians in practices with 15 or fewer doctors.
  • The MIPS Composite Performance Score will be derived from 4 categories; 3 of which will replace and consolidate the CMS Physician Quality Reporting System (PQRS), Value-based Payment Modifier (VM), and the Medicare EHR Incentive Program a/k/a Meaningful Use.
  • One of the four components of MIPS, resource use, will have a zero percent weighting toward the composite MIPS score in the first year.
  • CMS included an option to explore testing of a MIPS APMs in 2018: Accountable Care Organization (ACO) Track 1+ and the Diabetes Prevention Program, among others. MIPS APMs act as an interim step between MIPS and advanced APMs. Although MIPS APMs do meet the more than nominal risk required to eliminate MIPS payment, it does add the financial opportunity for upside APM gainsharing to MIPS bonus opportunities. Earlier this year, a provision that would allow participants to participate in new cardiac and orthopedic bundled payment models was also introduced. These models were included in the final rule with public comment with the possibility to qualify as Advanced APMs beginning in 2018.

The following chart comparing and contrasting the proposed and final rule from the American Medical Association is particularly helpful to view the important changes finalized by CMS. The AMA, one of the most influential medical associations, also notes where its comments on the proposed MACRA rule may have had an impact on the ultimate decisionmaking of CMS:









The calculation of the amount of the payment adjustment is based on a composite performance score (CPS) in the following performance categories (scoring weights for 2017 are noted parenthetically):

  1. Clinical quality (60%). This category replaces the CMS Physician Quality Reporting System (PQRS). Performance is calculated from the submission of quality measures chosen by the clinician. The measures available to clinicians will be updated annually through a call for quality measures process. Clinicians have the option of submitting general quality measures or specialty-specific quality measures.

Physicians are required to report on 6 measures or a specialty measure set, one of which must be an outcome measure or, if no outcome measures are available, a high priority measure. This requirement is a decrease from the 9 quality measures physicians were previously required to report under the PQRS. CMS also eliminated the proposal to report on a cross-cutting measure as one of the six quality reporting measures.

Additionally, in 2017, any physician who reports on one quality measure for at least one patient will receive at least 3 points on the measure, thereby avoiding a payment adjustment in 2019.  In 2017, successful physician measure reporting will include 50 percent of patients; and, in 2018, successful reporting will include 60 percent of patients. CMS intends to increase the measure thresholds over time. Although poor positioning, if a physician is only seeking penalty avoidance in 2017, they are only required to report on one patient. CMS also provides preferential scoring for physicians who report quality measures using EHR direct, qualified registry, QCDR, or web-interface.

  1. Advanced care information (ACI) (25%). This category replaces the CMS EHR Incentive program also known as “Meaningful Use.” Performance is based on the submission of five required EHR use-related measures (six fewer required measures than in the proposed rule). These measures include:
  • Security risk analysis;
  • e-Prescribing;
  • Providing patient access;
  • Sending summaries of care; and
  • Requesting/accepting summaries of care.

Importantly, the final rule does contain a pass-fail element in the base performance score, as physicians must report on all measures in the base/required score in order to earn a score in the ACI performance category. CMS also provides optional measures to be submitted for a higher score.

Reporting on all five required measures will earn a clinician 50 percent of the weighted category score. All of the other advancing care information performance category elements such as using patient-generated health data or enabling “view, download and transmit” by patients are optional and would give up to 10 percent in the overall performance score or a bonus in the case of public health reporting. CMS is also offering bonuses for reporting to public health or a clinical data registry.

Notation on Information blocking

In the final rule, CMS also reiterated its position on information blocking. Providers and hospitals participating under the existing meaningful use program are required to demonstrate cooperation with provisions concerning blocking the sharing of information.  Separately, they are required to demonstrate engagement with activities that support the performance of their certified EHR technology such as cooperation with ONC direct review of certified health information technologies.

Commenters in the proposed rule were concerned that they’d be to blame if their EHRs didn’t meet the standards in the attestation. CMS responded, saying, among other things:

“We reiterate that a healthcare provider will not be held accountable for factors that it cannot reasonably influence or control, including the actions of EHR vendors. ... We do expect, however, that a healthcare provider will take reasonable steps to verify that the certified EHR technology is connected [that is, implemented and configured] in accordance with applicable standards and law and in a manner that will allow the healthcare provider to attest to having satisfied the conditions described in the information blocking attestation. In this respect, a healthcare provider’s obligations include communicating these requirements to health IT developers, implementers and other persons who are responsible for implementing and configuring the healthcare provider’s certified EHR technology. In addition, the healthcare provider should obtain adequate assurances from these persons to satisfy itself that its certified EHR technology was connected in accordance with applicable standards and law and in a manner that will enable the healthcare provider to demonstrate that it has not knowingly and willfully take action to limit or restrict the compatibility or interoperability of certified EHR technology.”

  1. Clinical Practice Improvement Activities (CPIA) (15%). The clinical improvement activities group represents a new category under MIPS and does not replace an existing CMS program. Performance is calculated based on the clinician’s attestation to having completed four clinical practice improvement activities. Bonus scores are available for clinical improvement activities that use certified electronic health record technology (CEHRT) and for reporting to public health and clinical data registries.

To achieve full credit in the CPIA category, clinicians must attest to: two 20-point high weighted activities; four 10-point medium-weighted activities; or another combination of high and medium weighted activities equaling 40 points or more. This is a reduction from CMS’ proposed rule.

The final rule does provide accommodations for small, rural, health professional shortage areas (HPSAs) and non-patient facing physicians, including a lower reporting threshold of two medium-weighted or one high-weighted improvement activities are required for small, rural, HPSA and non-patient facing physicians to receive full credit. Again, the final rule represents a reduction in requirements from CMS’ proposed rule.

Additionally, CMS finalized its proposal to only require a 90-day performance period for clinical practice improvement activities. The agency also expanded the definition of medical homes eligible for full Improvement Activity credit. Participants that have received recognition, certification or accreditation as a patient-centered medical home (PCMH), or comparable specialty practices, including those certified by a national, regional or state program, private payer or other body that administers PCMH accreditation and certifies 500 or more practices for PCMH accreditation or comparable specialty practice certification will automatically receive full credit in the CPIA performance category. This includes but is not limited to such programs as operated by NCQA, URAC, AAAHC and The Joint Commission.

Demonstrating CMS’ long-term goal to move provider communities into risk-sharing APMs, CMS is also providing full credit for MIPS APMs. APM Entities participating in the 2017 MIPS APMs, such as the forthcoming Medicare Shared-Savings Program Track 1+ ACO, receive a full score for the improvement activities category in 2017. The eligible MIPS APMs are subject to change in future years. Other APMs are eligible for at least half-credit. This is an increased opportunity from CMS’ proposal that APMs, regardless of the model, would only receive half credit in the CPIA category.

  1. Cost (0%). This category replaces the CMS value-based payment modifier program (VM) required under the Affordable Care Act. Cost measures are derived from claims data, and providers should make the mental shift that their claims process is a reporting vehicle. It always has been.  Performance under this category (referred to in the proposed rule as “resource utilization”) will be calculated based on claims-based cost measures specified by CMS. Clinicians are report data for this category through claims automatically and claims data allows it to be calculated independently by CMS. To address public comments, this category will be calculated for feedback only and will not be factored into the performance scores for the first payment year 2019.

While in performance year 2017 the cost performance category is reduced to zero percent of the composite performance score, in 2018, the cost performance category is weighted at 10 percent of the CPS. In performance years 2019 and beyond, the cost performance category will make up 30 percent of the composite performance score as required by MACRA. Although this category will not count in the composite performance score year one, CMS will calculate scores on the cost measures and provide them informationally to clinicians. It is important that practitioners use the 2017 feedback on cost to assess their position in resource utilization as compared to their peers.

A range of services provided to treat a patient condition or perform a procedure can be grouped into episodes of care.  Under the Affordable Care Act, CMS developed episode groupers that started to be applied in 2015 as algorithms across the Medicare population to measure episode-based outcomes.  Under the MACRA final rule, CMS finalized 10 episode based measures for 2017, and plans to finalize additional episode-based measures in future years.

Additionally, the agency included issues in the cost measures category that are considered problematic for the current VM. CMS also finalized the total per capita cost and Medicare Spending Per Beneficiary (MSPB) administrative claims cost measures. The minimum number of cases required to count the total cost measure is 20. The minimum case threshold for the MSPB measure is 35. CMS noted it is developing patient condition groups and patient relationship codes to assist with attribution beginning in 2018, as well as working for future years to refine its risk-adjustment methodologies.

Transition Period for MIPS Reporting

In the final rule, CMS moved forward with its previously announced “transitional policies” allowing physicians to “pick their pace” of participation for the first performance period under the MIPS program that begins January 1, 2017. The transition period allows Medicare physicians to choose one of four reporting paths outlined below. CMS establishes a “performance threshold” of three points, allowing clinicians participating in each option to avoid a negative payment adjustment. The first two paths allow for a potential positive adjustment. The four paths are as follows:

  • Report MIPS measures for either a 90 day or one-year period;
  • Report MIPS measures for less than a year but more than 90 days and report more than one quality measure, more than one improvement activity, or more than the required measures in the advancing care information performance category;
  • Report one measure in each MIPS category (besides resource use which is automatically reported through claims); or
  • Participate under an Advanced APM.

CMS notes that “if MIPS eligible clinicians choose to not report even one measure or activity [option 3], they will receive the full negative 4 percent adjustment.”

To get the 3 points you need only successfully report one measure for one category. This prevents any 2019 negative payment adjustments. A low bar to be sure, but you must interact with CMS in 2017 at least this much or you will receive a negative 4% adjustment in 2019.

Because CMS expects most physicians to at least report one measure, there will not be a lot of positive payment adjustments available under budget neutrality rule. This means most of the positive potential in MIPS is tied to the exceptional performance bonus pool. To access this pool, you must report at least 90 days preferably the whole year and earn at least 70 points.

While it appears possible to get there while ignoring one of the categories other than quality this is not advisable. Each category has some built in low hanging fruit (for example you get 50% of the points in Advancing Care Information (ACI) just for having 5 basic, required EHR capabilities) that should not be missed. Every organization should look into the three scored categories and plot their best way to get to at least seventy points; and, evaluate efficiency under the cost category for future positioning.

To start you on that path, improvement activities is the easiest category and as mentioned you get 50% of the points in ACI just for basic implementation of your EHR. That is 22.5 points right there in MIPS only and 35 points in MIPS with ACO, certainly a solid base to start from. If you have done PQRS before, if you have done meaningful use before and certainly if you are in an ACO or other “non-advanced” APM then consider how you can be in that exceptional performance pool right away. If those things are new to you then take full advantage of 2017 as a transition year.

Note: This is the first article in a series of three articles, to be featured each Monday for three weeks. 

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