1 MACRA and Alternative Payment Models: What comes next?”LEAHP Discussion June 23, 2017 Eugene Rich MD Director, Center on Health Care Effectiveness Mathematica

2 Learning Objectives LEAHP program participants should be able to:Discuss MACRA in the context of policy problems in FFS payments for clinicians Describe the two MACRA pathways for future Medicare Physician Fee Schedule (MPFS) payments Describe key elements of the Merit-based Incentive Payment System Describe MACRA’s new approaches to clinician payment: APM’s and PFPM’s Note some upcoming policy challenges for MACRA

3 Why Regulate Physician Payments?Societal attempts to regulate FFS physician payments date back to the Code of Hammurabi Traditional market forces that guide pricing and allocating typical goods or services don’t apply to most physician services Physician/clinician as seller of services has access to specialized knowledge unavailable to the buyer Buyer unable to fully represent his or her own interests in weighing the seller’s recommendations Buyer often distracted by pain (or fear), impaired by illness Sometimes even confused or unconcious!

4 Why Regulate Physician Payments? (II)Market failure regarding physician services Not JUST setting price for services But ALSO allocating the correct number and type of services FFS rewards clinicians for the volume of services they provide not for quality or appropriateness Therefore setting prices can be insufficient FFS is still a common approach to paying for physician services prominent in many other countries today- e.g. Germany, Switzerland, Japan, Canada Government plays a role in setting physician payments in all developed countries

5 Medicare Efforts to Regulate FFS1989- reset the “price” of physician services with the RBRVS in the MPFS Also added the “volume performance standard” to constrain future volume growth 1998-Problems with the “volume performance standard” led to the Sustainable Growth Rate (SGR) formula % SGR cut in Medicare physician fees Congress annually over-rides SGR cuts In 2015, SGR law would cut MPFS rates by ~21% per service Medicare Access and CHIP Reauthorization Act of (MACRA)

6 Summary of MACRA Repeals SGRMerit-based Incentive Payment System (FFS P4P “on steroids”) to replace: Value-based Payment Modifier (VM) Physician Quality Report System (PQRS) Meaningful Use Provides “eligible professionals” who bill the MPFS with two “pathways” for future revenue MIPS or Alternative Payment Models (APMs) HHS develops “rules” for implementing MACRA

7 MACRA’s Two “Pathways”Merit-based Incentive P4P program) to replace: Mechanism Year(s) FFS/MIPS pathway Adv APM pathway PFS Updates January-June 2015 0% n/a July 0.5% 2019 5% 2025 2026-? 0.25% 0.75% MIPS 2019-? Applies (+/- 4%, increasing to +/- 9% in 2022) Exempt

8 MACRA vs the ACA ACA MACRAPartisan NO Republican votes in House when passed March 2010 No “Doc Fix” Continued annual risk of large MPFS cuts Established and funded CMMI Established HHS authority to implement new provider payment rules that either ꜛquality w/out ꜛcost or ꜜcost w/out ꜜ quality Bipartisan- originated in the Republican led House in 2014 House Senate 92-8 Replaced the SGR Eliminated risk of large (eg 21%) MPFS cuts for >10 years Uses CMMI to develop and test APMs Uses ACA HHS authority to implement new provider payment rules that meet criteria

9 HHS Priorities and RulemakingFrom April PTAC meeting- Sect Price advocating for “a patient centered health care system that adheres to six key principles” Accessibility Affordability Quality Choices Innovation Responsiveness

10 MIPS Timeline First performance period opens January 1, 2017 and closes December 31, 2017. Reporting quality data, improvement activities and how technology used. Can earn a positive MIPS payment adjustment for on 2017 data submitted by March 31, 2018. don’t send in 2017 data= - 4% payment adjustment Submit minimum amount of 2017 data (e.g one quality measure or one improvement activity)= NO downward payment adjustment

11 Overview of MIPS Four performance categories feed into the composite performance score (CPS) The CPS will range from 0-100

12 MIPS Quality Measures Most participants: Report up to 6 quality measures, including an outcome measure, for a minimum of 90 days. Groups using the CMS web interface: Report 15 quality measures for a full year. Groups in APMs qualifying for special scoring under MIPS (eg Shared Savings Track 1 APM or the Oncology Care Model one-sided risk APM): Report quality measures through your APM.

13 93 Improvement Activities: Selection and ReportingMost participants Attest that completed up to 4 improvement activities for a minimum of 90 days. Groups with fewer than 15 participants or if a rural or health professional shortage area Attest that completed up to 2 activities for a minimum of 90 days. Participants in certified patient-centered medical homes, or an APM designated as a Medical Home Model: Automatically earn full credit. Participants in certain APMs (“APM scoring standard”) Automatically scored full credit based on the requirements of participating in the APM Participants in any other APM: automatically earn half credit and may report additional activities to increase score. https://qpp.cms.gov/measures/ia

14 https://www.advisory.com/research/physician-practice-roundtable/members/expert-insights/2016/nine-faqs-on-provider-payment-under-macra

15 New MIPS Measures

16 Calculating the CPS: Performance Category Weights for 2019-2021Performance year 2: 2020* Performance year 1: 2019 Performance year 3: 2021 * Revised in June 20 QPP NPRM

17 What are “Alternative Payment Models”Specific Meaning in MACRA CMS Innovation Center model (under section 1115A, other than a Health Care Innovation Award) MSSP (Medicare Shared Savings Program) Demonstration under the Health Care Quality Demonstration Program Demonstration required by federal law Currently ~ 50 CMS initiatives meet this definition https://qpp.cms.gov/docs/QPP_Advanced_APMs_in_ pdf

18 Advanced APMs are subset of all MACRA APMs“ADVANCED” APMs must meet these criteria under MACRA “Requires participants…to use certified EHR technology” “Provides for payment…based on quality measures comparable to measures under [MIPS]” Eligible professional “participates in an entity that bears more than nominal financial risk if actual aggregate expenditures exceeds expected aggregate expenditures OR a medical home that meets criteria comparable to medical homes expanded {under CMMI/HHS authority in ACA}”

19 “more than nominal financial risk”Bearing financial risk means that the Advanced APM may do one or more of the following if actual expenditures exceed expected expenditures: Withhold payment for services to the APM Entity and/or the APM Entity’s eligible clinicians Reduce payment rates to the APM Entity and/or the APM Entity’s eligible clinicians Require direct payments by the APM Entity to CMS. The total amount of that risk must be equal to at least either: 8% of the average estimated total Medicare Parts A and B revenues of participating APM Entities; OR 3% of the expected expenditures for which an APM Entity is responsible under the APM.

20 Financial risk and Medical Home modelsMedical Home Models expanded under Section 1115A(c) of the SSA do not need to meet the financial risk criterion Otherwise for a Medical Home Model to be an Advanced APM, it must either withhold payment for services, reduce payment rates require the APM entity to owe payment(s) to CMS, OR lose the right to all or part of an otherwise guaranteed payment or payments IF EITHER actual expenditures exceed expected expenditures during a specified performance period OR APM entity performance on specified performance measures does not meet or exceed expected performance on such measures for a specified performance period

21 MIPS APMs include MIPS eligible clinicians as participants and hold them accountable for cost and quality of care

22 In 2017, these models are Advanced APMsComprehensive ESRD Care (CEC) - Two-Sided Risk Comprehensive Primary Care Plus (CPC+) Next Generation ACO Model Shared Savings Program - Track 2 Shared Savings Program - Track 3 Oncology Care Model (OCM) - Two-Sided Risk Comprehensive Care for Joint Replacement (CJR) Payment Model (Track 1- CEHRT) Vermont Medicare ACO Initiative (as part of the Vermont All-Payer ACO Model) https://qpp.cms.gov/docs/QPP_Advanced_APMs_in_2017.pdf

23 Qualifying “Participant” in an Adv APMAn Eligible professional “Physicians” (Doctors of medicine or osteopathy, dental medicine or dental surgery, podiatric medicine, optometry, chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists HHS Secretary decides eligibility of other health care professionals in subsequent years.

24 Qualifying “Participant” in an Adv APM (II)An Eligible professional with “Significant share” of revenue through APMs NB: QP Performance Period for each payment year will be from January 1 –August 31st of the calendar year that is two years prior to the payment year. (payment yr ): either 25% of payments thru Medicare Adv APM- OR 20% of patients thru Medicare Adv APM (payment yr ): : either 50% of payments thru Medicare + other payer Adv APMs 35% of patients thru Medicare + other payer Adv APMs 2021-future (payment yr 2023-): : 75% of payments thru Medicare + other payer Adv APMs 50% of patients thru Medicare + other payer Adv APMs

25 How do Individual Eligible Clinicians become Qualifying APM Participants?All the eligible clinicians in the Advanced APM Entity become QPs for the payment year.

26 APMs, the MPFS and the MACRA BonusIn the MACRA “rule’ of Oct CMS estimated 70, ,000 clinicians will be “Qualifying Participants (QPs)” in Medicare Advanced APMs in 2017 June 2017 rule estimates 180,000 to 245,000 eligible clinicians may become QPs for payment year 2020 based on Advanced APM participation in performance year 2018. Current MPFS (and all the problems of existing rates) remain embedded in APM calculations and bonuses

27 Developing new Advanced APMs- “PFPMs” and the “PTAC”

28 MACRA Process for Proposing/Reviewing Physician Focused Payment ModelsHHS sets the criteria for PFPMs (in the MACRA Rule) Ongoing stakeholder submission of models they “believe meet the criteria…” Advisory Committee periodically reviews models submitted Comments and recommendations whether submitted models meet criteria HHS Secretary reviews recommendations submitted by the Committee and posts detailed response “Nothing in this subsection shall be construed to impact the development or testing of models…” (by CMMI)

29 MACRA Establishes PTAC

30 PFPM TAC Members Jeffrey Bailet, MD, otolaryngologist and President, Aurora Health Care Medical Group Robert Berenson, MD, Institute Fellow, Urban Institute Elizabeth Mitchell, President and CEO, Network for Regional Healthcare Improvement Kavita Patel, MD, doctor of internal medicine and Nonresident Senior Fellow, the Brookings Institution Rhonda M. Medows, MD, Executive Vice President of Population Health, Providence Health & Services Harold D. Miller, President and CEO, Center for Healthcare Quality and Payment Reform Len Nichols, PhD, Director, Center for Health Policy Research and Ethics, George Mason University Grace Terrell, MD, MMM, doctor of internal medicine and President and CEO, Cornerstone Health Care Paul Casale, MD, MPH, interventional cardiologist and Chief of Cardiology, Lancaster General Health Tim Ferris, MD, primary care internal medicine physician and Senior Vice President for Population Health Management, Partners HealthCare Bruce Steinwald, MBA, private consultant (formerly of GAO),

31 MACRA Rule Defines Physician Focused Payment ModelA PFPM is “an APM in which: Medicare is a payer; Eligible clinicians that are EPs as defined in section (k)(3)(B) of the Act are participants and play a core role in implementing the APM’s payment methodology, “Physicians” (Doctors of medicine or osteopathy, dental medicine or dental surgery, podiatric medicine, optometry, chiropractors), physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified nurse-midwife, physical therapist, occupational therapist, qualified speech-language pathologist, qualified audiologist, clinical social worker, clinical psychologist, or registered dietitian or nutrition professional. Targets the quality and costs of services that eligible clinicians participating in the Alternative Payment Model provide, order, or can significantly influence.

32 MACRA Required HHS to Set Criteria for a PFPMMACRA Final Rule described 10 PFPM Criteria the PTAC will use “to make comments and recommendations to the Secretary on PFPMs proposed by stakeholders.” Criteria “consistent with Administration’s strategic goals for achieving better care, smarter spending, and healthier people”: Three categories of criteria: Payment incentives Care delivery Information availability

33 April PTAC Review of PFPMsFull proposals reviewed in April: The Comprehensive Colonoscopy Advanced Alternative Payment Model for Colorectal Cancer Screening, Diagnosis and Surveillance  submitted by the Digestive Health Network Public discussion deferred Project Sonar submitted by the Illinois Gastroenterology Group and SonarMD, LLC Recommended for “limited scale testing” The COPD and Asthma Monitoring Project submitted by Pulmonary Medicine, Infectious Disease and Critical Care Consultants Medical Group Inc. of Sacramento, California (PMA) Not recommended The ACS-Brandeis Advanced APM submitted by the American College of Surgeon

34 PFPMs in PTAC Pipeline Full proposals in the pipeline:Incident ESRD Clinical Episode Payment Model submitted by the Renal Physicians Association (RPA)- comment period closes June 26, 2017. Multi-provider, bundled episode-of-care payment model for treatment of chronic hepatitis C virus (HCV) using care coordination by employed physicians in hospital outpatient clinics submitted by Bureau of Communicable Disease (BCD) at New York City Department of Health and Mental Hygiene (DOHMH)- comment period closes June 14, 2017. “HaH Plus” (Hospital at Home Plus) Provider-Focused Payment Model submitted by the Icahn School of Medicine at Mount Sinai – comment period closed May 31, 2017. Advanced Primary Care: A Foundational Alternative Payment Model (APC-APM) for Delivering Patient-Centered, Longitudinal, and Coordinated Care submitted by the American Academy of Family Physicians- comment period closed May 18, 2017. Oncology Bundled Payment Program Using CNA-Guided Care submitted by Hackensack Meridian Health and Cota Inc.- comment period closed April 27, 2017. Advanced Care Model (ACM) Service Delivery and Advanced Alternative Payment Model submitted by Coalition to Transform Advanced Care- comment period closed March 6, 2017. 18 Letters of intent submitted pending full proposals From professional associations, disease advocacy associations, academic medical centers, professional coalitions, medical services organizations, group practices, individual clinicians

35 PTAC Goal: Some PFPMs Approved in Spring 2017 and Implemented in 2018

36 OTHER CMS/CMMI Model Design FactorsIn Addition to the 10 PTAC Criteria; e.g.: Operational feasibility How feasible will it be for CMS to prepare and build the systems, processes, and other infrastructure necessary to test the model within existing time and resource constraints? Will CMS be able to appropriately monitor the model and the activities of its participants to ensure program integrity? Scalability Will CMS have appropriate legal authority to scale the model if it proves successful? Are there concrete policies and/or processes that CMS could change or create to scale the model if successful? https://innovation.cms.gov/files/x/rfi-websitepreamble.pdf

37 Learning Objectives Hopefully LEAHP participants can now:Discuss MACRA in the context of policy problems in FFS payments for clinicians Describe the two MACRA pathways for future Medicare Physician Fee Schedule (MPFS) payments Describe key elements of the Merit-based Incentive Payment System Describe MACRA’s new approaches to clinician payment: APM’s and PFPM’s Note some upcoming policy challenges for MACRA

38 Extra slides

39 Special Considerations in MACRAHHS is specifically encouraged to test APMs relevant to: Specialty physician services (“physicians’ services …furnished by physicians who are not primary care practitioners”). “Practices of 15 or fewer professionals” “Risk-based models for small physician practices which may involve two-sided risk and prospective patient assignment…” HHS to identify the potential challenges of and vulnerabilities in APMs

40 Patient Relationship CodesMACRA requires HHS to develop Revisions posted April 2017 Continuing services: “Broad”-clinicians who provide the principal care for a patient, with no planned endpoint of the relationship. “Focused”- clinicians whose expertise is needed for the ongoing management of a chronic disease or a condition that needs to be managed and followed for a long time. Episodic services: Broad-clinicians who have broad responsibility for the comprehensive needs of the patients, that is limited to a defined period and circumstance, Focused-specialty focused clinicians who provide time-limited care. Services ordered by another clinician Annual updates beginning November 1, 2018 1. Continuous/broad services: For reporting services by clinicians who provide the principal care for a patient, with no planned endpoint of the relationship. Services in this category represent comprehensive care, dealing with the entire scope of patient problems, either directly or in a care coordination role. Reporting clinician service examples include primary care services and specialists providing comprehensive care to patients in addition to specialty care. 2. Continuous/focused services: For reporting services by clinicians whose expertise is needed for the ongoing management of a chronic disease or a condition that needs to be managed and followed for a long time. A reporting clinician service example would be a rheumatologist taking care of the patient’s rheumatoid arthritis longitudinally but not providing general primary care services. 3. Episodic/broad services: For reporting services by clinicians who have broad responsibility for the comprehensive needs of the patients, that is limited to a defined period and circumstance, such as a hospitalization. A reporting clinician service example would include a hospitalist providing comprehensive and general care to a patient while the patient is admitted to the hospital. 4. Episodic/focused services: For reporting services by specialty focused clinicians who provide time-limited care. The patient has a problem, acute or chronic, that will be treated with surgery, radiation, or some other type of generally time-limited intervention. A reporting clinician service example would be an orthopedic surgeon performing a knee replacement and seeing the patient through the postoperative period. 5. Only as ordered by another clinician: For reporting services by a clinician who furnishes care to the patient only as ordered by another clinician. This patient relationship category is reported for patient relationships that may not be adequately captured in the four categories described above. A reporting clinician service example would be a radiologist interpretation of an imaging study ordered by another clinician. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/CMS-Patient-Relationship-Categories-and-Codes.pdf

41 June 20 QPP NPRM-1049 pages Virtual Groups participation option.Increasing the low-volume threshold- more small practices and clinicians in rural and HPSAs are exempt from MIPS Allows the use of 2014 Edition CEHRT Bonus points in the scoring methodology for caring for complex patients and using 2015 Edition CEHRT exclusively. Adds MIPS performance improvement in scoring quality performance. Gives more flexibilities for clinicians in small practices Proposed policies on Application of Appropriate Use Criteria, New QPP polices related to 21st Century Cures Act . The Year 2 proposed rule offers Virtual Group participation, which is another way clinicians can elect to participate in MIPS. Virtual Groups would be composed of solo practitioners and groups of 10 or fewer eligible clinicians, eligible to participate in MIPS, who come together “virtually” with at least 1 other such solo practitioner or group to participate in MIPS for a performance period of a year. Our goal is to make it as easy as possible for Virtual Groups to form no matter where the group members are located or what their medical specialties are. Generally, clinicians in a Virtual Group will report as a Virtual Group across all 4 performance categories and will need to meet the same measure and performance category requirements as non-virtual MIPS groups.

42 The Quality Payment Program: MIPS versus APMsNotice of Proposed Rule Making issued April 26, 2016 to implement key provisions of MACRA through the Quality Payment Program

43 Overview of MIPS Four performance categories will feed into the composite performance score (CPS) The CPS will range from 0-100 Each performance category will have a maximum number of points that can be achieved Max Points 60 NA 90 100

44 Rewards and Penalties under MIPS (2019)100 4% x HPM -4%* 4% x HPM + EPB% HPM = high performance multiplier; EPB = exceptional performance bonus * Maximum penalties in subsequent years are 5% (2020), 7% (2021), and 9% (2022) ¼ of Performance Threshold Performance Threshold “Top 25% above Threshold” Score % Adjustment

45 Overview of the Quality Performance CategoryReporting requirement Select 6 measures to report (NPRM Table A and E), including one cross-cutting measures (NPRM Table C) and one outcome measure Currently under PQRS, 9 measures are required across 3 National Quality Strategy domains 3 additional global and population-based measures (2 Prevention Quality Indicators [AHRQ] and 30-day all cause readmission measure) Non-patient-facing clinicians Allow fewer number of measures to be reported, exemption from cross-cutting measure, and reporting via QCDR for non-MIPS measure Submission mechanism Claims (individual only), qualified registry, QCDR, EHR, CAHPS, and CMS Web Interface (WI, groups only), administrative claims Total points 90 points (with exceptions for CMS WI and small groups) Bonus points Reporting of high priority measure, use of EHR, patient experience.

46 Overview of the Resource Use Performance CategoryReporting requirement Measures based on currently existing per capita and episode-based measures: Total per capita cost (currently applied in the VM) Medicare spending per beneficiary (currently applied in the VM) Episode-based measures (not applied in VM, but provided through “Supplemental Quality and Resource Use Reports”) Non-patient-facing clinicians Potential reweighting across other performance categories if there are no resource use measures that apply Submission mechanism No submission required. Calculated from Medicare Part A and B administrative claims Total points NA (based on measures that apply to the group/eligible clinician) Bonus points None

47 Overview of the CPIA Performance Category“An activity that relevant eligible clinician organizations and other relevant stakeholders identify as improving clinical practice of care delivery and is likely to result in improved outcomes” (MACRA) Reporting requirement Over 90 activities (NPRM Table H) divided across: Subcategories (e.g., expanded patient access, population management, integration of primary care and behavioral health, etc.) Score categories: high = 20 points; medium =10 Submission requires 3 high, 6 medium, or some combination of high and medium activities Requires 1 high and 2 medium, or 3 medium activities to earn at least 50% of points. Non-patient-facing clinicians Minimum of 1 activity for partial credit and 2 activities for full credit. Each activity (regardless of high or medium) gets 30 points. Submission mechanism Attestation, QCDR, Qualified registry, EHR, CMS WI (groups only), administrative claims Total points 60 points

48 93 Improvement Activities: Selection and ReportingMost participants Attest that completed up to 4 improvement activities for a minimum of 90 days. Groups with fewer than 15 participants or if a rural or health professional shortage area Attest that completed up to 2 activities for a minimum of 90 days. Participants in certified patient-centered medical homes, or an APM designated as a Medical Home Model: Automatically earn full credit. Participants in certain APMs (“APM scoring standard”) Shared Savings Program Track 1, Oncology Care Mode, automatically scored full credit based on the requirements of participating in the APM Participants in any other APM: automatically earn half credit and may report additional activities to increase score. https://qpp.cms.gov/measures/ia

49 https://www.advisory.com/research/physician-practice-roundtable/members/expert-insights/2016/nine-faqs-on-provider-payment-under-macra

50 Overview of the Advancing Care Information Performance CategoryReporting requirement Made up of the base score and performance score Base score (50 points) requires eligible clinician to provide numerator/denominator or yes/no for each objective and measure. Objectives include: Protect patient health information (yes/no) Patient electronic access (numerator/denominator) Coordination of care through patient engagement (numerator/denominator) Electronic prescribing numerator/denominator) Health information exchange numerator/denominator) Public health and clinical data (yes/no) Performance score (up to 80 points) requires reporting of measures in following objectives: Exclusions May be applied to hospital-based physicians, economic hardship, no physician eligible clinicians Submission Mechanism Attestation, QCDR, Qualified registry, EHR, and CMS WI (groups only) Total points 100 points Bonus points 1 bonus point if reporting more than one public health registry measure

51 Improvement Activities InventoryMost participants Attest that you completed up to 4 improvement activities for a minimum of 90 days. Groups with fewer than 15 participants or if you are in a rural or health professional shortage area Attest that you completed up to 2 activities for a minimum of 90 days. Participants in certified patient-centered medical homes, or an APM designated as a Medical Home Model: Automatically earn full credit. Participants in certain APMs (“APM scoring standard”) Shared Savings Program Track 1, Oncology Care Mode, :automatically scored full credit based on the requirements of participating in the APM For future APMs under the “APM scoring standard,” assigned score based on requirements; at least half credit. Participants in any other APM: You will automatically earn half credit and may report additional activities to increase your score. https://qpp.cms.gov/measures/ia

52 MIPS Participants and Performance PeriodAffects all eligible clinicians billing Medicare Part B Physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse anesthetists Eligible clinicians are exempt from MIPS if they: Are a Qualifying APM Participant (i.e., participate in a significant way under an Advanced APM) Bill <= $30,000 in Medicare charges or <=100 Medicare patients Are newly enrolled in Medicare (e.g., recent residency grads) The MIPS payment adjustment is based on performance during the performance period: 1st performance period: Jan 1, 2017 – Dec 31, 2017 1st MIPS payment year: 2019 Payment adjustment is assessed at the TIN-NPI (Tax Identification Number - National Provider ID) level

53 PTAC considerations re Financial RiskPTAC will consider proposals for PFPMs that define financial risk in different ways, including… The amount of payment that could be lost by the eligible professionals or the entity if the desired results are not achieved; The increase in unreimbursed costs the eligible professionals or entity would incur if the desired results are not achieved; or The amount that the eligible professionals or entity would be expected to pay to the Centers for Medicare & Medicaid Services (CMS) if the desired results are not achieved. PTAC will consider PFPMs in which the amount of financial risk during an initial period of time is smaller than the amount of risk in later periods.

54 Types of PFPM proposals considered by PTACPayments designed to enable an individual eligible professional or group of eligible professionals to improve care for patients who are receiving a specific treatment or procedure. These “treatment-based payments” could focus only on services delivered on the day(s) of treatment or on services delivered during a longer episode of care. Payments designed to enable an individual eligible professional or group of eligible professionals to improve care during a period of time for patients who have a specific health condition or combination of conditions. These “condition-based payments” could focus on either acute conditions or chronic conditions. Payments designed to enable teams of eligible professionals to deliver more coordinated, efficient care for patients who have a specific condition or are receiving a specific treatment or procedure. Payments designed to improve the efficiency of care and/or outcomes for patients receiving both services delivered by physicians or other eligible professionals and related services ordered by eligible professionals that are delivered by other providers.

55 Which Track Do I Qualify For?Four Provider Categories Emerging 1 Meet QP1 Threshold? APM YES Optionally Choose MIPS? YES 2 Exempt from MIPS NO YES NO Participate in an Advanced APM? YES Meet Partial QP2 Threshold? 3 MIPS APM Scoring Standard NO NO YES Ok so how do we determine where we will fall in this new payment world? All eligible clinicians will likely fall into one of the four categories listed on the far right of this slide. So let’s walk through those briefly: First, on the far right, we have APM participants – those clinicians that will participate in an Advanced APM and meet the patient or payment targets to qualify for that 5% annual bonus from CMS expects 10-17% of clinicians to fall into this category, an increase from the proposed rule prediction of 4-12%. Next, we have those partially qualifying APM participants—those clinicians that did not meet the APM patient or payment targets as a group, but met a set of lower targets and chose to opt out of the MIPS track. For payment years partially qualifying participants will be defined as eligible clinicians or groups that have at least 20% of payment (instead of 25%) and at least 10% of patients (instead of 20%) tied to risk. Those providers will see no payment adjustment for that given year and are not eligible for the 5% bonus. CMS expects few providers to fall into this track. Third, we have clinicians that do not meet the requirements to make the APM track or qualify for that 5% bonus, but still participate in a certain type of payment model that will give them favorable scoring under the MIPS track. CMS calls this favorable scoring category of MIPS the MIPS APM Scoring Standard. Finally, the last category here where most clinicians will likely fall – the MIPS track with no extra advantage. Clinicians and groups in this last option will need to meet all the requirements under each of the MIPS categories and will be scored according to their performance. In the final rule, CMS increased the low-volume threshold from $10,000 to $30,000 in Medicare charges or 100 or fewer Medicare patients, meaning 124,000 additional clinicians will now be exempt from MACRA. Since many of these clinicians would have fallen into MIPS and CMS expects the APM track to grow over time, the MIPS track is expected to be more competitive than anticipated. One important note here is that each year is a new opportunity for clinicians to fall into any one of these four categories. So we may fall into the plain old MIPS category in performance year 2017, but then may have an opportunity to get to the APM track the following year due to the payment models we joined. CMS noted that they will finalize the exact payment models that will qualify as Advanced APMs no later than November 1 before each performance year begins. 4 Participate in a MIPS APM3? MIPS NO ! Circumstances That May Exclude Providers in a Given Year Qualifying Participant; 25% of payments or 20% of patients tied to Advanced Alternative Payment Model in 2017. Partial Qualifying Participant; 20% of payments or 10% of patients tied to Advanced Alternative Payment Model in 2017. Alternative Payment Model that does not qualify as Advanced, but does qualify clinician for favorable scoring under MIPS categories. Low total patient volume New Medicare provider Source: Advisory Board interviews and analysis.

56 June 20 QPP NPRM-1049 pages Offering the Virtual Groups participation option. Increasing the low-volume threshold so that more small practices and eligible clinicians in rural and Health Professional Shortage Areas (HPSAs) are exempt from MIPS participation. Continuing to allow the use of 2014 Edition CEHRT Adding bonus points in the scoring methodology for caring for complex patients and using 2015 Edition CEHRT exclusively. Incorporating MIPS performance improvement in scoring quality performance. Incorporating the option to use facility-based scoring for facility-based clinicians. More flexibilities for clinicians in small practices Add a new hardship exception for clinicians in small practices under the Advancing Care Information performance category. Add bonus points to the Final Score of clinicians in small practices. Continue to award small practices 3 points for measures in the Quality performance category that don’t meet data completeness requirements. Proposed policies on use of Appropriate Use Criteria, New QPP polices related to 21st Century Cures Act .