Life Science Compliance Update

April 29, 2016

Medicare Access and Chip Reauthorization Act (MACRA) Proposed Rule, MIPS, APM’s and Advanced Care Information

The Centers for Medicare and Medicaid Services (CMS) released its proposed 962 page rule for the Medicare Access and CHIP Reauthorization Act (MACRA) of that links Medicare provider payments to quality patient care. The proposed regulation is the first major step taken by the government to implement the 2015 MACRA.

The proposed rule creates a "Quality Payment Program" to replace old reporting programs. There two tracks, the first called the Merit-based Incentive Payment System (MIPS) consolidates components of the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program. A second track involves alternative payment models (APM). Because of the high bar set to qualify for the APM track, CMS projects that only 30,000 to 90,000 clinicians will be in the APM track. An estimated 687,000 to 746,000 physicians will be in MIPS.

The program will begin grading physicians in 2017 for changes in their payments starting 2019.

Merit-based Incentive Payment System (MIPS)

CMS anticipates that most Medicare clinicians will initially participate in the Quality Payment Program through MIPS. CMS's is hopeful that the proposed rule would improve the relevancy and depth Medicare's quality-based payments and increase clinician flexibility by allowing clinicians to choose measures and activities appropriate to the type of care they provide.

CMS believes that MIPS allows Medicare clinicians to be paid for providing high value care through success in four performance categories: Quality, Advancing Care Information, Clinical Practice Improvement Activities, and Cost.

  • Quality (50 percent of total score in 2017): For this category, clinicians would choose to report six measures from among a list of options that accommodate differences among specialties and practices.
  • Advancing Care Information – Formerly Meaningful Use (25 percent of total score in 2017): 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 (15 percent of total score in 2017): This category would reward clinical practice improvements, such as activities focused on care coordination, beneficiary engagement, and patient safety. Clinicians may select activities that match their practices' goals from a list of more than 90 options.
  • Cost (10 percent of total score in 2017): For this category, the score would be based on Medicare claims, meaning no reporting requirements for clinicians. This category would use 40 episode-specific measures to account for differences among specialties.

Winners and Losers

CMS estimates that there will be significant winners and losers under MIPS with some classes of eligible providers receiving positive adjustments and some negative the range is staggering between 79% positive adjustments and 98% negative adjustments or penalties. CMS estimates that small and solo practices will be especially hard hit by penalties under MIPS with 87% of solo practices estimated to be penalized.

Estimated MIPS Adjustments

Winners 

Positive Adjustment 

Cardiology 

62.1% 

Endocrinology 

67.3%

Emergency Medicine 

64.0% 

Colorectal Surgeons 

59.7% 

Family Practice 

59.5% 

Gastroenterology 

61.5% 

Nurse Practitioners 

62.0% 

Pediatrics 

79.3% 

Physician Assistant 

67.1% 

Rheumatology 

67.7% 

Thoracic Cardiac Surgery 

61.8% 

Urology 

59.2% 

 

Negative Adjustment

Losers 

 

Chiropractors 

-98.4% 

Dentists 

-68.9% 

General Practice 

-69.4% 

Optometry 

-79.7% 

Podiatry 

-78.0% 

Plastic Surgery 

-65.4% 

Psychiatry  

-68.8% 

Physical Medicine 

-57.9% 

Source CMS MACRA Proposed Rule, Table 63, pages 672-675

Changes to Meaningful Use

One of the biggest changes as a result of the regulation could be the sunset of the Meaningful Use program through the "advancing care information" proposal (25 percent of the MIPS score). Under this new program, physicians will be allowed to select the measures that reflect how they use EHR technology and what suits their practices. CMS will no longer require all-or-nothing EHR measurement or quality reporting. The number of measures will be reduced from 18 to a new all-time low of 11. Reporting of clinical decision support and computerized physician order entry will no longer be required. EPs only have to report to a single public health immunization registry. Some physicians will also be exempt from reporting when EHR technology is less applicable.

The rule also emphasizes interoperability, information exchange and security measures and requires patients to have access to their health information through of APIs.

The program would align with the Office of the National Coordinator for Health IT's 2015 certification criteria. These changes apply to professionals in the Medicare Meaningful Use program; however, penalties for the program do not end until the end of 2018 (performance year 2016). But the proposed rules will not impact professionals in the Medicaid program or hospitals

Quality

Quality is 50 percent of the score and clinicians pick six measures from a range of options that accommodate different specialties and practice settings. The final 10 percent of the MIPS score in the first year is related to cost. The score would be based on Medicare claims and uses 40 episode-specific measures to account for differences among specialties.  There will also be significant credit given under MIPS for participation in an ACO or Patient Centered Medical Home,

Clinical Practice Improvement Activities and CME

Starting in 2017 (with payments in 2019 being impacted), the proposal outlines the four components of MIPS. MIPS is based on a 100 point score with clinical practice improvement activities (CPIA) representing 15 percent of the score. This is an area where CME should play an important role in helping CMS achieve its quality measure objectives. The proposed rule leaves great discretion to the Secretary of HHS to define what will be included in these activities. As stated in the rule's preamble: "Clinical Practice Improvement Activity (CPIA) means an activity that relevant eligible clinician organizations and other relevant stakeholders identify as improving clinical practice or care delivery and that the Secretary determines, when effectively executed, is likely to result in improved outcomes."

According to the statute, any CPIA measure must be "relevant to an existing CPIA subcategory (or a proposed new subcategory)" as defined in §414.1365. Unfortunately, those subcategories do not currently include a specific reference to medical education or a related area. The subcategories outlined in the proposed rule include: (1) expanded practice access; (2) population management; (3) care coordination; (4) beneficiary engagement; (5) patient safety and practice assessment; (6) participation in an APM; (7) achieving health equity; (8) emergency preparedness and response; and (9) integrated behavioral and mental health.

However, the language defining CPIA, and authority granted to the Secretary of HHS as proposed, offers an opportunity for advocates of CME to argue that CME should be included in the measurement category. In §414.1355, CMS proposes that CPIA be defined on an annual basis and must meet certain criteria – much of which aligns closely with the goals of CME. While CME may not be directly relevant to an existing CPIA subcategory, it does improve beneficiary outcomes, leads to practice improvement, can be performed by providers of all types, is feasible to implement, can be validated by CMS, and is evidence-based.

Even if no changes were made to the proposed rule, a strong case can be made before CMS as to why CME should be included in the CPIA score. But it would still be wise of CMS to expand the subcategories outlined in §414.1365 to include medical education through comments in the final rule.

Alternative Payment Models

CMS set a high bar on requirements for APM track. Under the agency's criteria for payment models to be eligible for the APM track—which CMS calls "Advanced APMs"—the Bundled Payments for Care Improvement (BPCI) Initiative, the Comprehensive Care for Joint Replacement (CJR) Model, and Track 1 of the Medicare Shared Savings Program (MSSP) all will not qualify as APM's under the proposed rule. However, MSSP Tracks 2 and 3, Next Generation, and Pioneer—which all require downside risk—will qualify.

The proposed rule confirms that only Part B (traditional) Medicare payments will count toward the Advanced APM threshold. Payments from Medicare Advantage plans can count toward the "Other Payer" threshold beginning in 2021, but only if those payments are made through models that meet Advanced APM requirements. The rule does not address whether CMS will allow Track 1 ACOs to switch MSSP tracks mid-participation agreement to join an Advanced APM.

To be considered an "Advanced APM", the model must meet three criteria: The APM must require participants to use certified EHR technology; the APM must provide for payment for covered professional services based on quality measures comparable to those in the quality performance category under MIPS; and the APM must either require that participating APM entities bear risk for monetary losses of a more than nominal amount under the APM, or be a Medical Home Model expanded under section 115A(c) of the Act.

Another critical area of the APM section involves the definitions that will be associated with "financial risk criterion" and in excess of "nominal amount". CMS writes that financial risk for monetary losses under an APM must be tied to performance under the model and cannot be solely indirect losses related to financial investments made by the APM entity. Nominal is intended to be "minimal in magnitude" but not "a mere formality." The agency describes as an example that the law was not intended to consider one dollar of risk to be more than nominal.

To address risk of a nominal amount, CMS measures three specific dimensions: (a) marginal risk, which is a common component of risk arrangements—particularly those that involve shared savings—that refers to the percentage of the amount by which actual expenditures exceed expected expenditures for which an APM entity would be liable under the APM; (b) minimum loss rate (MLR), which is a percentage by which actual expenditures may exceed expected expenditures without triggering financial risk; and (c) total potential risk, which refers to the maximum potential payment for which an APM entity could be liable under the APM. CMS also proposes that for a APM to meet the nominal amount standard the specific level of marginal risk must be at least 30 percent of losses in excess of expected expenditures, and a minimum loss rate, to the extent applicable, must be no greater than 4 percent of expected expenditures, and total potential risk must be at least 4 percent of expected expenditures.

Discussion

Welcome news is the elimination of the all or nothing criteria of the meaningful use program. The exclusion of most ACO's under Medicare shared shavings is probably the most controversial part of the proposed rule as health systems have invested millions in the current Medicare shared savings program. That CMS is estimating that 87% of solo practitioners will be paying a penalty will also not be well received. Under MIPS CMS is estimating that non MD providers with the exception of nurse practitioners and physician assistants fare the worst including Chiropractors, Podiatrists and Dentists. Overall the proposed rule creates and opportunity for input from stakeholders on the final version of MACRA. We will include further analysis of this rule in the days ahead.

Comments are due on June 27, 2016 To Submit Comments

MACRA Proposed Rule April 28 2016

April 18, 2016

Quality Measure Core Set Implementation Plan

For the past three years, the Centers for Medicare and Medicaid Services (CMS) has worked to align quality measures across different public programs in an attempt to support consistent high quality care for patients and to reduce complexity and burden for clinicians in how they report on quality improvements. CMS has already aligned quality measures across acute care hospital programs, such as the Inpatient Quality Reporting Program, Hospital Value Based Purchasing, and the Hospital-Acquired Condition Reduction program. Hospitals report their quality measures once, which are then used for multiple programs.

CMS recently announced the release of seven sets of core clinical quality measures intended for use in multi-payer settings. These measures were selected to support multi-payer alignment on core measures primarily for physician quality measurement program, as measure requirements are often not aligned among payers, which often results in confusion and complexity for reporting providers.

The guiding principles used to develop the core measure sets are that they be meaningful to patients, consumers, and physicians, while reducing variability in measure selection, collection burden, and cost. The goal is to establish broadly agreed upon core measure sets that can be harmonized across commercial and government payers.

The seven core measure sets focus on the following areas: Accountable Care Organizations (ACOs), Patient Centered Medical Homes (PCMH), and Primary Care; Cardiology; Gastroenterology; HIV and Hepatitis C; Medical Oncology; Obstetrics and Gynecology; and Orthopedics.

The seven measures were selected as a part of a collaboration between CMS, America's Health Insurance Plans (AHIP), private payers, and other stakeholders, known as Core Quality Measures Collaborative, to establish "broadly agreed upon core measure sets that could be harmonized across both commercial and government payers." Current measures acted as a model for the new measure sets, and CMS plans to use the rulemaking process to introduce additional measures from the new sets into public reporting programs.

According to CMS Acting Administrator Andy Slavitt, "In the U.S. Health care system, where we are moving to measure and pay for quality, patients and care providers deserve a uniform approach to measure quality. This agreement … will reduce unnecessary burden for physicians and accelerate the country's movement to better quality."

Implementation

Implementation will occur in several stages. When it comes to private payers, the measure sets will be phased in over time as contracts between providers and payers are renewed and renegotiated. The implementation of certain measures will depend on the provider's ability to collect and report data through their Electronic Health Record (EHR). While some plans and providers may be able to collect certain clinical data, a robust infrastructure to collect data on all the measures in the core set does not currently exist, and further infrastructure may be required for certain measures.

The Health Care Payment Learning and Action Network (HCPLAN), a public-private collaboration established by CMS, will integrate these quality measure into their efforts to align payment model components with public and private sector partners. In addition, CMS is working with federal partners (i.e., the Office of Personnel Management, Department of Defense, and Department of Veterans Affairs) and state Medicaid programs to further align quality measures.

Given ongoing local and regional efforts at quality improvement, provider performance on some of the measures in the core sets may be topped out in particular areas of the country or within a particular provider's patient population. Private payer-provider collaboration will help to determine the appropriate subset of core measures that should be implemented.

The Core Quality Measures Collaborative will use the upcoming year as a transitional period, as it begins to adopt and harmonize the measures. The Collaborative will continually monitor the use of these measures to modify them as needed, based on lessons learned. In addition to monitoring progress, the Collaborative will invite broader participation and add additional measures and measure sets.

Debra L. Ness, president of the National Partnership for Women & Families, believes that "alignment across payers is key to making sure measurement doesn't waste resources or create unnecessary burden. Ultimately, it plays a foundational role in achieving better health and better health care at lower costs."

April 15, 2016

Panel Discussion on Medicare Part B Drug Payment Model Demonstration

In an effort to support the CMS proposed changes to Medicare Part B drug reimbursement, the Pew Charitable Trust held a forum on April 11, 2016, with various stakeholders to discuss potential effects of the Centers for Medicare & Medicaid Services (CMS) proposed changes to Medicare Part B Drug Payment Model demonstration.

The panel included stakeholders such as: Peter Bach, the director of the Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center; Stephen Grubbs, the vice president of clinical affairs at the American Society of Clinical Oncology; and Patrick Conway, the acting principal deputy administrator, deputy administrator for innovation and quality, and chief medical officer, at the Centers for Medicare and Medicaid Services.

The demonstration is set to have two phases: the first phase will aim to restructure the Part B physician add-on payment to a combination of both a flat fee of $16.80 and a lower percentage rate of 2.5% based on Part B drug average sales price (ASP), while the second phase involves a number of value-based pricing strategies, including discounting or eliminating altogether the patient cost-sharing, feedback on prescribing patterns and online decision support tools, and the often-talked about risk-sharing agreements based on outcomes.

In his opening remarks, the Senior Director of Pew, Allan Coukell, discussed the current focus in Congress on high drug prices. Coukell stated that with Congressional actions in mind, the focus of the panel was to explore whether the Part B demonstration actually "makes sense" and if so, what interventions should be tested to comment on the proposed experimental design.

Patrick Conway, M.D.

Dr. Conway provided an overview of the Medicare Part B payment model and provided three principles that CMS strives to achieve: (1) access to medication for all Medicare/Medicaid beneficiaries; (2) allowing doctors to prescribe the medication they think is the right choice for the patient; and (3) better patient outcomes. Dr. Conway also acknowledged that CMS is open to suggestions about the major elements in the proposed rule, stating, "…many of these tools need further development and patient input" and that CMS "look[s] forward to your comments on this." Dr. Conway also answered several questions focused on the Part B demonstration model, as outlined below.

Monitoring and Evaluation

Dr. Conway discussed how CMS plans to implement the monitoring and evaluation strategy between the proposed rule and the final rule, stating that CMS typically uses claims data while considering the issue of access. Dr. Conway also recognizes that "quality measures are not always meaningful to patients."

Physician Revenue

While some panelists, as outlined below, expressed concern that this policy may result in financial losses to physicians, Dr. Conway believes that it is possible that doctors may actually receive a net increase from this proposal. Dr. Conway explained his reasoning, that during the sequester, CMS actually found that physicians use lower-cost drugs, and payments therefore may "slightly shift to the physician space."

Timeline

Dr. Conway did not give a concrete timeline at all, instead stating that since CMS went through the rulemaking process, the ability is limited. However, he did allude to the idea that the model could incorporate a plan for multi-year input for intense engagement.

Panel Discussion

Many panelists were divided on their feelings on phase one of the proposal. For example, Stephen Grubbs expressed concern that not only is this a bad time for phase one of the demo, but also that the policy might wind up lowering the added payment to a premium of 0.86 percent of the reported ASP. Such a result could lead to doctors losing money on Part B medicines provided for patients. Dr. Grubbs also expressed concern that there is nothing in the current design that protects individual patients from risk if something goes wrong.

Stacy Sanders, the federal policy director of the Medicare Rights Center, on the other hand, endorsed the proposal, provided that it does not increase cost-sharing for beneficiaries. Ms. Sanders believes that the model may wind up helping older and disabled patients who are struggling with current drug prices. Ms. Sanders also believes that phase two is important as value-based tools prioritize value-based insurance design and reduce beneficiary coinsurance.

Peter Bach, the director for health policy and outcomes at the Memorial Sloan Kettering Cancer Center, voiced the idea that if the margins of the Medicare Part B system become tighter, manufacturers will distribute drugs at tighter pricing margins, and that CMS should not be taking drug prices as a constant or a given, but as a product of the market. Dr. Bach does not at all favor the second phase, stating that CMS has not been effective in implementing reference-based pricing in the past and that perhaps they should use a competitive acquisition model instead.

Conclusion

Dr. Conway mentioned that CMS is actively monitoring the situation and creating a plan for the demonstration, and believes that success will involve improved quality and neutral costs, or even improved quality and reduced costs, and that either result would be considered a success.

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