The New Gold Standard in Quality
Reimbursement: Alternative Payment Models
Should Your Practice Reach for the Gold?
July 2016
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As healthcare shifts from a fee-for-service
to a value-based system, Medicare is
making sweeping changes to how it
reimburses physicians.
The Centers for Medicare and Medicaid Services (CMS) has introduced new
regulations and reporting requirements – as well as unprecedented potential
for financial rewards and penalties.
Medicare’s
far-reaching impact
CMS is responsible for about half
of all U.S. medical claims – setting
the standard for the industry.
In other words, where CMS goes,
commercial payers follow.
Indeed, doctors who achieve the highest levels of “value” will earn substantial
increases in their Medicare Part B payments. Conversely, those who do little
or nothing to address the new requirements will incur significant reductions.
Commercial payers are adopting similar models, further expanding the
potential impact of these changes – positive or negative – on a practice.
Physicians need to start acting now, so as not to fall behind and put their
practices at risk.
Fortunately, doctors don’t have to do it alone: a qualified enablement partner
can efficiently manage this complex transition.
Value-Based Care & Payment Model
Choose your path:
The Medicare Access & CHIP Reauthorization Act (MACRA) of 2015 created
the Quality Payment Program (QPP), which offers physicians a choice
between two different reporting paths. Both start in the 2017 reporting year:
• The Merit-Based Incentive Payment System (MIPS). This new
structure encompasses CMS’s current models for measuring
physician quality and cost of care, and adds “clinical practice
improvement” activities, such as expanding patient access or
being a patient-centered medical home.
2
• Advanced Alternative Payment Models (APMs). These are
payment arrangements in which clinicians accept financial risk for
providing coordinated, high-quality care. As an incentive to take
on this risk, CMS offers increased monetary rewards. CMS has
designated specific payment models as Advanced APMs – including
certain medical homes, accountable care organizations (ACOs) and
bundled payment models — and it will continue to approve new
models. Advanced APMs are similar to one another, with variations
based primarily on the different quality measures they use – such
as those for primary care, oncology, and end-stage renal disease.
(See list on p. 4.) In addition, CMS provides Advanced APM
options that incorporate non-Medicare payment arrangements
to encourage these advanced, value-based models across
commercial payers and state Medicaid programs.
For more information
on MIPS and an overview of
healthcare’s transformation to “value,”
please see our previous whitepaper:
How Physicians Can Win in the New
Healthcare Environment
2016 is Key Year to Act – or Lose Ground
How Physicians Can Win
in the New Healthcare Environment
2016 is Key Year to Act – or Lose Ground
The APM track offers higher financial rewards than the MIPS track, but
requires more advanced levels of value-based activities. APMs also require
physicians to be part of a larger group (such as an ACO or medical home),
and to bear greater financial risk (more on that below).
April 2016
402 Lippincott Drive | Marlton, NJ 08053 | 856.782.3300 | www.challc.net
Most physicians who see Medicare patients will be required to report under
either the MIPS or Advanced APM track starting in January 2017. Those in
Advanced APMs must still complete MIPS reporting for the first year (2017),
so CMS can determine whether they meet the Advanced APM requirements.
Additionally, 2017 MIPS reporting will provide spending benchmarks for a
prospective Advanced APM.
“Every health care entity in America
is faced with the reality that…
measuring, improving and
delivering quality outcomes is a
permanent part of how they
will get paid. And it’s working.
…Ninety-five [percent of] quality
measures have increased across
the country, and medical inflation…
is at historically low levels.”
Weighing The Options
Although these systems are complex, one thing is clear: Doctors must
determine where they stand – and where they want to go – in order to plan
effectively for their future success. Whether they report under MIPS or
pursue the Advanced APM track will depend upon their goals, interests and
preferences for their practice.
– Andy Slavitt, CMS Acting
Administrator, in remarks at the
CMS Quality Conference
Dec. 1, 2015
3
Consider:
• Do you want your income to be more certain but with lower
potential rewards (MIPS) or less certain but with higher rewards
(Advanced APM)?
• Would you rather be measured on your own (MIPS) or as part
of a team (MIPS or APM)?
• What would your future revenue look like under each model?
The status quo is not an option. At minimum, most physicians must meet
MIPS requirements or face increasing penalties. In our April 2016 whitepaper,
we detailed MIPS and its components, which are shown in the box below.
This is “a historic opportunity
to finally move to a system that
promotes quality over quantity
and begins the important work
of addressing Medicare’s
structural issues.”
– Congressman Fred Upton,
Chairman, House Energy and
Commerce Committee
Components of MIPS
MIPS Score: 0 – 100 points
MU 25%
PQRS/VBM
Quality 30%
VBM
Cost 30%
Clinical
Practice
Improvement
15%
Meaningful Use: Providers’ use of certified electronic
health record technology (CEHRT) in ways that
measurably improve quality and value.
Physician Quality Reporting System requires physicians
and other eligible providers to report quality data in order
to avoid Medicare payment penalties.
Value-Based Modifier applies payment incentives and
penalties based on PQRS, Medicare cost and outcome
measures, and patient surveys.
Value-Based Modifier cost is a provider’s Medicare cost
data (see column 2).
CMS lists more than 90 qualifying activities, from
increased patient access and care coordination, to
enhanced patient engagement and being a patientcentered medical home.
MIPS features a continuum of financial incentives and penalties, which will
increase annually through the 2022 payment year. These adjustments can
range from +/- 4% of Medicare Part B payments in 2019, to +/- 9% in 2022.
(There is a two-year lag between reporting and payment years. Additional
payments may also be available for exceptional performance.)
Alternatively, the Advanced APM option
provides a 5% incentive payment for the
first five years, followed by higher fee
schedules than MIPS. The risks and rewards
are explained in more detail on the following
page.
The remainder of this whitepaper will focus
on Advanced APMs as a follow-up to our
April 2016 report on MIPS.
4
Types of
Advanced APMs
Criteria for Advanced APMs
It is important to distinguish between APMs and Advanced APMs. APMs
include key features that enhance value and help physicians earn payment
incentives. However, only certain APMs – those considered Advanced –
are eligible for greater incentives over MIPS payments and are not subject
to MIPS penalties.
THE FOLLOWING APM MODELS
WILL QUALIFY AS ADVANCED
APMS IN 2017:
An Advanced APM must meet the following three criteria:
1
2
3
se certified electronic health record technology (CEHRT) to
U
document and communicate clinical care. In its first year, 50% of
the APM’s eligible clinicians (ECs) must use CEHRT. After the first
year, 75% of ECs must use CEHRT. (Under the CMS Shared Savings
Program only, ECs may receive a penalty or reward based on their
degree of CEHRT use.)
R
eport quality measures comparable to those of MIPS. The
APM can use actual MIPS measures or other measures that are
evidence-based, reliable and valid. At least one outcome measure
must be used, unless none is available under MIPS. The APM’s
Medicare Part B payments are based on these quality measures.
Next Generation Accountable
Care Organization (ACO)
Comprehensive Primary
Care Plus (CPC+)
Comprehensive End-Stage
Renal Disease Care
(ESRD or CEC: large dialysis
organization arrangement)
Oncology Care Model
(OCM) Two-Sided Risk Arrangement
(available in 2018)
ear sufficient financial risk. The APM entity must assume risk for
B
monetary losses of a certain magnitude. These losses are CMS
penalties that kick in if the APM exceeds its expenditure benchmark
by a specific amount. Or, the APM can avoid the risk requirement by
being an “expanded” medical home model per the CMS Innovation
Center. Moreover, CMS applies lower financial risk standards to
medical homes that are not expanded to accommodate entities
with 50 or fewer clinicians.
The standard risk requirement is as follows:
•T
otal risk of at least 4% of expected Medicare Part B
expenditures. (Total risk is the maximum amount of
possible losses.)
• Marginal risk of at least 30%. (Marginal risk is the percentage
of expenditures above the APM benchmark for which the
APM entity is responsible.)
•M
inimum loss ratio (MLR) of no more than 4%. (MLR is the
amount by which spending can exceed the APM benchmark
before the APM entity is responsible for losses.)
Shared Savings Program
CMS Tracks 2 and 3
OTHER APM MODELS CAN QUALIFY
AS ADVANCED APMs IF THEY MEET
REQUIRED CRITERIA, INCLUDING:
CMS Innovation Center models
(under MACRA section 1115A,
other than a Health Care
Innovation Award)
Medicare Shared Savings
Program (MSSP)
Demonstration models under
the Health Care Quality
Demonstration Program or
the Affordable Care Act
5
Advanced APMs: Potential Rewards
Qualifying Advanced APM entities will receive a 5% Medicare Part B incentive
payment from 2019 through 2024. Starting in 2026, they will receive a higher
fee schedule update: 0.75% for Advanced APMs versus 0.25% for physicians
reporting under MIPS. Advanced APM participants will also be excluded from
MIPS adjustments.
In order to receive incentive payments for Advanced APM participation,
clinicians must meet either certain payment percentages or patient volumes
through the APM. For instance, in the 2017 reporting year, clinicians must
receive at least 25% of their payments or see at least 20% of their patients
through an Advanced APM. These figures increase over the next five years, as
shown in the table below.
Government
is fast-tracking the
shift to value
CMS has already met a key
2016 goal: 30% of Medicare
fee-for-service payments are
now based on quality and value.
The goal rises to 50% in 2018.
Participation in “Other Payer” Advanced APMs (such as those arranged through
commercial payers) can count toward these requirements. (See blue box on
page 7 for a potential example of an Other Payer Advanced APM). Moreover,
an “All-Payer Combination Option” – based on a clinician’s level of Medicare
plus “Other Payer” Advanced APM participation – offers another approach,
starting in the 2019 reporting year. These models will enable clinicians to more
easily meet the minimum payment/patient thresholds for Advanced APM
participation. (A separate set of Medicare and non-Medicare thresholds applies
to these models.)
Clinicians who participate in Advanced APMs but don’t meet these incentive
payment requirements can still receive financial rewards under MIPS. They
would receive MIPS credit in the Clinical Practice Improvement category.
Providers can also avoid MIPS penalties if they meet a lesser standard: For the
2019 and 2020 payment years, they must receive at least 20% of their Medicare
payments or see at least 10% of their Medicare patients through an Advanced
APM. Those figures rise over time, reaching 50% and 35% respectively by the
2023 payment year.
Requirements for Incentive Payments to Clinicians
for Participation in Advanced APMs*
Clinicians must meet either payment OR patient requirements.
Reporting
Year
Payment
Year
Minimum percentage
of payments
through Advanced APM
Minimum percentage
of patients
through Advanced APM
2017
2019
25%
20%
2018
2020
25%
20%
2019
2021
50%
35%
2020
2022
50%
35%
2021
2023
75%
50%
2022+
2024+
75%
50%
*Different minimums – including lower Medicare thresholds – apply to “Other Payer” and “ All-Payer” Advanced APM models
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A Successful Example: ‘Other Payer’ Model
Continuum Health Alliance has managed a rewarding, value-based
payment arrangement since 2012 between a large commercial payer
and a primary care and specialist group serving approximately 20,000
member patients ages 18 and over. This is an example of the type
of models that could satisfy CMS’s “Other Payer” Advanced APM
category* (see Types of Advanced APMs list on p.5).
‘Other Payer’ Model
Medicare Advantage, Medicaid,
and commercial payers create
“Other Payer” Advanced APMs.
The model’s financial arrangement includes:
•
Up-front incentive payments by the payer based on each practice’s
number of payer member patients (per-member-per-month fee).
•
The payer provides shared savings incentives based on
performance: Physicians receive bonuses based on quality, overall
cost of care and patient engagement.
Outcomes to date include:
•
17% lower overall cost of care
•
19% reduction in inpatient admissions
•
90th percentile of care quality, as ranked by the National Center
for Quality Assurance
•
Hospital 30-day readmissions reduced to 12%
•
Emergency department visits lowered by 6%
•
Provider revenue increased by 5-10% through value-based rewards
Disclaimer: This case study is intended to provide an example of how an actual
Continuum client has benefited from Continuum’s services. Continuum does not claim
that the outcome of this particular case study is a typical result, or that it is necessarily
representative of all those who will use its services. Continuum expressly disclaims any
representations or warranties in relation to this case study or the information presented
in this whitepaper.
Keys To Success
The model uses a centralized and scalable
care coordination program that includes
the services of registered nurses, a social
worker, a pharmacist and support staff.
The care coordination team is responsive
to both practices and patients, and works
proactively to oversee each patient’s health.
The centralized design makes the program
affordable to practices of all sizes.
Care coordination is a vital element of
“practice transformation” – the shift to a
patient-centered, value-based approach
that permeates every aspect of a practice.
Continuum helps each practice transform
through other enhancements as well. These
activities are supported by actionable intelligence, as determined
through reporting and analytics.
(For more details, visit challc.net/the-continuum-platform/overview/
population-health)
*This model’s acceptance by CMS is pending
7
ACOs: Threshold for Advanced APMs
Certain ACO models – Shared Savings Program Tracks 2 and 3 – meet the
minimum criteria for an Advanced APM and can therefore be a good starting
point for physicians who choose the Advanced APM option. The models
are similar, but Track 3 raises the bar with greater risk and greater financial
incentives. Track 1, on the other hand, does not qualify as an Advanced APM
but is also not subject to CMS penalties.
ACOs are groups of doctors and other healthcare providers who formally join
together to provide coordinated, high-quality care to their Medicare patients
– and to share in the savings they achieve for Medicare.
A well-designed ACO can be highly successful for both patients and
physicians. Indeed, doctors will likely realize cost savings through the ACO’s
operational efficiencies, in addition to earning incentive payments from
CMS. For instance, care coordination helps reduce redundant services and
avoidable hospitalizations.
“We are just at the beginning of
change… What we’ve done so far
is not enough, and even more
of the same won’t get us to the
results we need.
Our priority is clear: to drive a
delivery system that provides
better care, with a smarter
payment system that
keeps people healthier.”
– Andy Slavitt, CMS Acting
Administrator
Dec. 1, 2015
An ACO and a medical home* (which is typically much smaller) share many of
the same features, and both increase quality and save healthcare dollars over
the long run:
• Planned coordination of chronic and preventive care
• Strong patient access and continuity of care
• Risk-stratified care management
• Coordination of care across providers
• High level of patient and caregiver engagement
• Shared decision-making
• Payment arrangements in addition to, or substituting for,
fee-for-service payments
*CMS has not yet defined the term “medical home.”
Public Reporting & Transparency
Physicians also need to be aware that their reported data will likely become
publicly available at some point. CMS plans to post results of its Quality
Payment Program (QPP) – for both MIPS and Advanced APM tracks – at the
Physician Compare website (medicare.gov/physiciancompare).
8
This may include:
• Names of clinicians who participate in Advanced APMs
• Names and performance of Advanced APMs
• MIPS scores for clinicians, including aggregate and
individual scores for each performance category
Doctors should consider this transparency when determining which path to
take and how quickly to move from MIPS to the Advanced APM track.
What should physicians do now?
Doctors must prepare right away for these changes, or risk being left
behind. However, they don’t need to do everything at once. Practices can
create a step-by-step plan, which they can implement over time. A qualified
enablement company can provide invaluable assistance in this process.
Here are some tips to get started:
• Focus on quality. Make sure you have the nuts and bolts of quality
programs in place. Strategies include proactive gap closure at the
point of care, care coordination, enhanced patient access, strong
patient engagement, and referral management (making referrals
to like-minded, value-oriented providers).
• Continue to pursue MIPS quality measures, including Meaningful
Use (MU) and those of the Physician Quality Reporting System
(PQRS). Although the MU incentive program is winding down, the
effective use of electronic health records (EHRs) will remain a key
contributor to quality. MU will also continue to affect payment
adjustments under MIPS, as it accounts for 25% of a provider’s
MIPS score.
• Educate yourself about QPP and its two tracks (MIPS and
Advanced APMs). Read up on the changes, or reach out to a
knowledgeable advisor.
Where to get help
The right enablement
partner can guide you in
these decisions and their
implementation – and keep
up with CMS’s evolving
regulations and requirements.
At Continuum, we also help
design value-based payment
models that meet the needs of
both physician enterprises and
their commercial payers.
In today’s value-based
healthcare landscape,
reimbursement is no longer
one-size-fits-all. Each practice
must determine the path
that will enable it to be most
successful – with rewards
based on high-quality care,
wise spending, and strong
patient satisfaction.
9
About Continuum Health Alliance
As a physician enablement company, Continuum delivers solutions to provider
enterprises, helping foster self-sufficiency by maximizing fee-for-service
reimbursement, transitioning them to value-based programs, and preparing
them to participate in clinically integrated networks. More than 1,200 primary
care physicians, specialists, and nurse practitioners in over 400 settings
depend on Continuum’s clinical, technology, and business experts to develop
customized management and technology-enabled solutions to optimize
value-based commerce. Continuum’s practice management, population health
management and network development services help providers improve
quality of care, enhance patient access and lower the
overall cost of care.
For more information, please visit: www.challc.net
Disclaimer: CMS had not finalized all rules at the time of this publication.
Sources:
https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-programmerit-based-incentive-payment-system-mips-and-alternative-payment-model-apm
Call or visit us online to learn
more about Continuum.
www.challc.net | [email protected]
856.782.3300
402 Lippincott Drive
Marlton, NJ 08053
© 2016, Continuum Health Alliance, LLC.
CMS.
The Medicare Access & CHIP Reauthorization Act of 2015. Quality Payment Program slide deck.
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html?redirect
=/ACO/
CAPG.
MACRA: Charting the Future of Physician Payment. August 27, 2015.
https://blog.cms.gov/2015/12/01/remarks-of-cms-acting-administrator-andy-slavitt-at-thecms-quality-conference/