Medicare Access and CHIP Reauthorization Act of 2015 MACRA

MACRA: The Law That Repealed The SGR Goals in Reshaping Provider Payment MACRA will help us to move more quickly toward CMS’s goal of paying for value and better care. Offer different pathways with varying levels of risk and reward for providers to better tie payment to value Expand the options so that a broad range of providers can participate in either the Merit Based Incentive Payment System (MIPS) or an Alternative Payment Model (APM) Minimize additional reporting burdens for APM participants Support multi-payer initiatives, the development of risk-based or alternative payment models in Medicaid, Medicare Advantage, and other payer arrangements Jan 1, 2019 MACRA implementation date MACRA: Summary-Brief Legislation passed in April 2015 that repealed the Sustainable Growth Rate (SGR) Locks provider rates at near zero growth 2015 – 2019: 0.5% increase 2020 – 2025: 0.0% increase 2026 and on: 0.25% increase Stipulates development of two new Medicare payment tracks: Merit-Based Incentive Payment System (MIPS), Advanced Alternative Payment Models (APMs) 2 Source: H.R. 2: Medicare Access and CHIP Reauthorization Act of 2015;

Components of MIPS Composite Score (2019-2021) MIPS: Merit-based Incentive Payment Systems Sunsetting Existing Incentive Programs in 2018 Category Outline the law Yet to be determined Quality (PQRS): 50% CMS will use some quality measures from PQRS, VBPM programs to assess provider quality How will providers be required to report quality data? How many and what types of measures are providers required to report? Choose 6 vs 9 Measures specialty/practice Resource Use (VM): 10% CMS will use cost measures from the VBPM program2 to assess provider resource use Part D drug costs will be included Are there other cost measures CMS will include in their assessment of a provider’s Resource Use beyond those used in the VBPM program? Will CMS compare our group’s resource use to groups in similar specialties? CPIA:15% CMS proposed five subcategories3 under this category Those participating in non-eligible APM models will automatically score well in this category What information must providers report and what mechanisms should providers use to report data related to clinical practice improvement? How will CMS weigh each subcategory? Emphasize activities that have a proven association with improved health outcomes Advancing Care Info (MU):25% CMS plans to use meaningful use measures to score providers in this category Certified EHR: 6 objectives Can providers receive some points for achieving partial credit of meaningful use measures? Components of MIPS Composite Score (2019-2021)

Qualifying for APM Track No Easy Feat 2. How can provider groups qualify for the Advanced Alternative Payment Model track? Qualifying for APM Track No Easy Feat Providers Must Meet Two Conditions Participate in an Eligible Alternative Payment Model Meet Revenue at Risk Requirement 1 2 Revenue at Risk Requirements Alternative Payment Models New approaches for paying for care that incentivize quality, value Eligibility Criteria 2019 – 2020 2021– 2022 OR Option 1 Option 2 Required for All Providers 2023 and on Incentivize providers to meet quality measures comparable to those in MIPS 25% 50% 50% 25% Require use of certified EHR1 technology 75% 75% 25% Medicare All-Payer3 Bear more than nominal financial risk for monetary losses OR are medical home model expanded under CMMI2 authority Eligible Alternative Payment Models Source: CMS, “The Medicare Access and Chip Re-Authorization Act of 2015 Path to Value”, available at www.cms.gov; H.R. 2: Medicare Access and CHIP Reauthorization Act of 2015; Advisory Board Company interviews and analysis. Electronic Health Record. Center for Medicare and Medicaid Innovation. Includes risk-based contracts with Medicare Advantage plans. 4

Source: Public Law 114-10 (April 16, 2015

MACRA: Seven Provider Questions 1 What are the two new payment tracks and how will participation in either track impact provider payment? 2 How can provider groups qualify for the Advanced Alternative Payment Model track? 3 Is there a middle road between the MIPS1 and the APM2 tracks? 4 How will groups be issued a performance score under the MIPS payment track? 5 How will CMS use group performance under MIPS to determine their payment adjustment? 6 How do medical groups determine which track they will fall into in this new payment world? 7 What should medical groups do to prepare for MACRA implementation? The Merit-Based Incentive Payment System. Advanced Alternative Payment Models. Source: Advisory Board Company interviews and analysis. 7

Five Steps to Prepare for MACRA Implementation Make certain you are successfully participating in existing Medicare quality and EHR programs 1 Access OPP or CMS websites on Medicare Payment in 2016 to understand current VBPM1 and PQRS2 reporting requirements Factor APM participation bonus into risk-based payment model adoption strategy 2 Stay up to date on Meaningful Use by downloading this brief on the finalized Meaningful Use requirements for 2015-2017 Understand which track your organization will likely fall into 3 Educate providers in your group on your payment track and what it means for provider payment in 2019 4 Stay tuned for updates once CMS releases MACRA implementation proposed ruling Stay current on forthcoming CMS proposed and final MACRA implementation rulings 5 Source: Advisory Board Company interviews and analysis. 8 Value-Based Payment Modifier. Physician Quality Reporting System.

MACRA Decision Guide: Determining Our Payment Track Start here Are you participating in an Alternative Payment Model? Do you meet partial qualifying (QP) participant revenue requirements2? Yes No Yes No Is it an eligible Alternative Payment Model1? Are you in your first year of Medicare participation? Yes No Yes No Do you meet qualifying (QP) participant revenue requirements1? Are you below the low volume threshold1? Yes No Yes No 9 Source: H.R. 2: Medicare Access and CHIP Reauthorization Act of 2015; Advisory Board Company interviews and analysis.

Five Provider Categories Created Under MACRA Matrix of Provider Categories Created Under MACRA APM Participant Eligible APM Participant Above Revenue Threshold for Partial Qualifying APM Participants Above Revenue Threshold for APM Participants Group type #1 Group type #2 Group type #3 Group type #4 Group type #5 MIPS Payment Track Degree of downside risk Optional MIPS Payment Track APM Track 10 Source: H.R. 2: Medicare Access and CHIP Reauthorization Act of 2015; Advisory Board Company interviews and analysis.

OPP’s Response to MACRA Continuous Physician/Practice Education Preparation through Participation MU: 2013- 2016 PQRS: 4 Measures to Full Measure Set: 2015-2016 Quality Performance CG-CAPHS: 2016 EMR Subsidy Value our Partners Program Contact Us for questions/guidance 11