HIT “Ask the Experts” Roundtable: CMS Payment Adjustments & ROI Andy Finnegan Thursday, November 14, Access Code #

CMS Payment Adjustments Andy Finnegan CMS RO1 Maine HealthInfoNet Regional Extension Center November 14, 2013

3 CMS Payment Adjustments PQRS eRx Physician Value based Modifier HITECH Stage Two Meaningful Use

PQRS 2013 Goals Align with other Medicare quality reporting programs that have quality reporting requirements, such as the EHR Incentive Program, Medicare Shared Savings Program, and Value-based Modifier Increase participation to 50% by CY 2015, which is the first year PQRS will not offer incentives for reporting, only payment adjustments The 2010 Experience Report indicated that the participation rate for 2010 was 26%; Therefore, CMS plans to nearly double the number of eligible professionals participating in PQRS Ease eligible professionals into reporting for the PQRS payment adjustment by providing alternative means to avoiding the 2015 and 2016 payment adjustments (the first 2 years of the PQRS payment adjustment) other than the traditional PQRS methods and criteria for satisfactory reporting

PQRS PQRS and the EHR Incentive Program Extension of the PQRS-Medicare EHR Incentive Pilot to 2013 Satisfactory reporting criteria for the 2014 PQRS Incentive via the EHR-based reporting mechanism and the criteria for meeting the CQM component of meaningful use under the EHR Incentive Program Requirement of Certified Electronic Health Record Technology (CEHRT

6 PQRS Reporting Periods 2015 PQRS payment adjustment 6-month and 12-month reporting periods that coincide with the 2013 PQRS incentive reporting periods 2016 PQRS payment adjustment 6-month and 12-month reporting periods that coincide with the 2014 PQRS incentive reporting periods 2017 and subsequent PQRS payment adjustments 12-month reporting periods only

7 PQRS Incentive and Payment Adjustment Amounts 2013: 0.5% Incentive 2014: 0.5% Incentive 2015: 1.5% Payment Adjustment (will be applied in 2015 based on reporting in 2013) 2016: 2.0% Payment Adjustment (will be applied in 2016 based on reporting in 2014)

PQRS Reporting Mechanisms Registry - Expand use of the registry-based reporting mechanism to group practices participating in the GPRO EHR - Beginning in 2014: All direct EHR products and EHR data submission vendor’s products must be certified by the Office of the National Coordinator as CEHRT. Expand use of the EHR-based reporting mechanism to group practices participating in the GPRO GPRO Web Interface Adoption of the Medicare Shared Savings Program method of assignment and sampling Administrative Claims A reporting mechanism under which an eligible professional or group practice elects to have CMS analyze claims data to determine which measures an eligible professional or group practice reports (For the 2015 PQRS payment adjustment only) Under this reporting mechanism, eligible professionals or group practices need to complete this election by the October 15, 2013 deadline

9 PQRS Benefits of Participating as a Group Practice: Billing and reporting staff may report one set of quality measures data on behalf of all eligible professionals within a group practice, reducing the need to keep track of eligible professionals’ reporting efforts separately How to Participate as a Group Practice: 1.Meet the Definition of a PQRS Group Practice Group Practice = a single Tax Identification Number (TIN) with 2 or more eligible professionals, as identified by their individual National Provider (NPI), who have reassigned their Medicare billing rights to the TIN The definition of group practice includes groups of 2-24 eligible professionals; Therefore, beginning in 2013, we are allowing all group practices to participate in the PQRS group practice reporting option (GPRO)

10 PQRS Self-Nominate to Participate in the PQRS Group Practice Reporting Option (GPRO) How to Self-Nominate: Group practices will submit an eRx and/or PQRS self-nomination statement via a CMS developed website December 1, 2012 – January 31, 2013; OR Utilize a second timeframe to submit a PQRS self-nomination statement or update a previous PQRS self-nomination statement via a CMS developed website (summer 2013 – October 15, 2013) Note: If participating in PQRS through another CMS program (such as the Medicare Shared Savings Program), please check the program’s requirements for information on how to simultaneously report under PQRS & the respective program Choose a Reporting Mechanism and Reporting Criterion Available Reporting Mechanisms in 2013: The GPRO Web Interface, Registry, and Administrative Claims (for the 2015 PQRS payment adjustment only) Beginning in 2014, the EHR-based reporting mechanism will also be available for use under the GPRO

11 PQRS Total Individual PQRS Measures: 259 for in 2014 GPRO Measures: 18 measures, including 2 composites, for a total of 22 measures (same as the measures available for reporting under the Medicare Shared Savings Program)

12 eRx THE ELECTRONIC PRESCRIBING (eRx) INCENTIVE PROGRAM

13 eRx Updates to the eRx Incentive Program: New Criteria for the eRx group practice reporting option (eRx GPRO) Report the electronic prescribing measure for at least 75 instances during the applicable 2013 eRx incentive or 2014 eRx payment adjustment reporting period

14 eRx New Significant Hardship Exemption Categories for the 2013 and 2014 eRx payment adjustments: Eligible professionals or group practices who achieve meaningful use during certain eRx payment adjustment reporting period Eligible professionals or group practices who demonstrate intent to participate in the HER Incentive Program and adoption of Certified EHR Technology Eligible professionals or group practices will not need to affirmatively request an exemption for these categories. Rather, CMS will use the information provided in the EHR Incentive Program’s Registration and Attestation page to determine whether the exemption applies

15 eRx Implementation of an eRx Informal Review process How to Request an eRx Informal Review for the 2012 or 2013 eRx Incentives: Informal Review Request Method: Deadline: 90 days following the receipt of the applicable full year eRx feedback reports How to Request an eRx Informal Review for the 2013 or 2014 eRx Payment Adjustments: Informal Review Request Method: Deadlines: For the 2012 eRx payment adjustment: February 28, 2013 For the 2014 eRx payment adjustment: February 28, 2014

16 Value Modifier and the Physician Quality Reporting System (PQRS) A group practice consisting of 100+ eligible professionals, beginning in 2013, may also be subject to the 2015 Value-based Payment Modifier

Value Modifier and the Physician Quality Reporting System (PQRS) PQRS and the Value-based Payment Modifier The Value-based Payment Modifier and meeting the criteria for satisfactory reporting for the 2013 PQRS incentive and 2015 PQRS payment adjustment Group practices consisting of 100+ eligible professionals, beginning in 2013 will be subject to the Value-based Payment Modifier A group practice with 100 or more eligible professionals may avoid a 2015 VBM downward payment adjustment by satisfactorily reporting to avoid the 2015 PQRS payment adjustment (as outlined in slide 23) Note: The 2015 and 2016 Value-based payment modifier does not apply to ACOs

18 Value Modifier and the Physician Quality Reporting System (PQRS) The Affordable Care Act requires that Medicare phase in a value-based payment modifier (VM) that would apply to Medicare Fee for Service Payments starting in 2015, phase-in complete by The VM assesses both quality of care furnished and the cost of that care. We propose to apply the VM to physician payment in all groups of 25 or more eligible professionals (EPs) starting in The proposals Encourage physician measurement and alignment with PQRS Offer choice of quality measures Encourage shared responsibility and systems-based care Provide actionable information

19 Value Modifier and the Physician Quality Reporting System (PQRS) Groups must select one of the five PQRS quality reporting methods and that information will be used for the VM Reporting Method Type of Measure Group Size Requirement 1. PQRS GPRO Web interface 22 measures that focus on preventive care for chronic disease Groups > PQRS GPRO using claims Groups select the quality measures that they will report Groups between PQRS GPRO using registries Groups select the quality measures that they will report Groups between PQRS GPRO using EHRs Groups select the quality measures that they will report Groups between PQRS Administrative Claims Option for 2013 and measures that focus on preventive care and care for chronic diseases (calculated from administrative claims data) Groups > 25

20 Value Modifier and the Physician Quality Reporting System (PQRS) Divide each group’s quality and cost composite scores into three tiers based on whether the score is above, not different from, or below the mean (e.g., the outliers ) Low cost Average cost High cost High quality +2.0x* +1.0x* +0.0% Average quality +1.0x* +0.0% -0.5% Low quality +0.0% -0.5% -1.0%

21 Medicare Only EPs, Subsection (d) Hospitals and CAHs EHR Payment Adjustments & Hardship Exceptions

The HITECH Act stipulates that for Medicare EP, subsection (d) hospitals and CAHs a payment adjustment applies if they are not a meaningful EHR user. An EP, subsection (d) hospital or CAH becomes a meaningful EHR user when they successfully attest to meaningful use under either the Medicare or Medicaid EHR Incentive Program 22 Payment Adjustments Adopt, implement and upgrade ≠ meaningful use A provider receiving a Medicaid incentive for AIU would still be subject to the Medicare payment adjustment. Adopt, implement and upgrade ≠ meaningful use A provider receiving a Medicaid incentive for AIU would still be subject to the Medicare payment adjustment.

23 The negative payment adjustment starting from 2015 applies to all of the EP’s Medicare Physician Fee Schedule (MPFS) services. % Adjustment shown below assumes less than 75% of EPs are meaningful users for CY 2018 and subsequent years % Adjustment shown below assumes more than 75% of EPs are meaningful users for CY 2018 and subsequent years EP Payment Adjustments

The negative payment adjustment will be applied to the allowed MPFS independently, before the beneficiary co- insurance is assessed. The beneficiary co-insurance is calculated based on the reduced MPFS amount. For example, the MPFS amount for a particular service is $100. If the EP is not subject to a negative payment adjustment, the paid amount the EP will receive is $80 considering 20% of beneficiary co-insurance [$100 (allowed MPFS) – ($100 x 20%) (beneficiary co-pay) = $80.00]. However, if the EP is subject to a 1.0% negative payment adjustment, it will be applied to the initial allowed MPFS. As such, the reduced MPFS is $ If the beneficiary co-insurance is 20%, the beneficiary will pay $99.00 x 20% = $ The paid amount to the EP accounting for the negative payment adjustment will thus be $79.20 ($ $19.80 = $79.20). 24 EP Payment Adjustments Calculations

For an EP who has demonstrated meaningful use in 2011 or 2012: 25 Payment adjustments are based on prior years’ reporting periods. The length of the reporting period depends upon the first year of participation. EP EHR Reporting Period To Avoid Payment Adjustments: EPs must continue to demonstrate meaningful use every year to avoid payment adjustments in subsequent years. * Special 3 month EHR reporting period For an EP who demonstrates meaningful use in 2013 for the first time:

26 TIMELINE FOR EP TO AVOID PAYMENT ADJUSTMENT

Payment Adjustments for Providers Eligible for Both Programs Eligible for both programs? If you are eligible to participate in both the Medicare and Medicaid EHR Incentive Programs, you MUST demonstrate meaningful use according to the timelines in the previous slides to avoid the payment adjustments. You may demonstrate meaningful use under either Medicare or Medicaid. 27 Note: Congress mandated that an EP must be a meaningful user in order to avoid the payment adjustment; therefore receiving a Medicaid EHR incentive payment for adopting, implementing, or upgrading your certified EHR Technology would not exempt you from the payment adjustments.

Subsection (d) Hospital Payment Adjustments 28 % Decrease in the Percentage Increase to the IPPS* Payment Rate that the hospital would otherwise receive for that year: Example: If the increase to IPPS for 2015 was 2%, than a hospital subject to the payment adjustment would only receive a 1.5% increase 2% increase X 25% =.5% payment adjustment OR 1.5% increase total *Inpatient Prospective Payment System (IPPS)

Critical Access Hospital (CAH) Payment Adjustments 29 Applicable % of reasonable costs reimbursement which absent payment adjustments is 101%: Example: If a CAH has not demonstrated meaningful use for an applicable reporting period, then for a cost reporting period that begins in FY 2015, its reimbursement would be reduced from 101 percent of its reasonable costs to percent.

1.Infrastructure EPs must demonstrate that they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure (e.g., lack of broadband). 2.New EPs Newly practicing EPs who would not have had time to become meaningful users can apply for a 2-year limited exception to payment adjustments. 3.Unforeseen Circumstances Examples may include a natural disaster or other unforeseeable barrier. 4.EPs must demonstrate that they meet the following criteria: Lack of face-to-face or telemedicine interaction with patients Lack of follow-up need with patients EPs whose primary specialties are anesthesiology, radiology or pathology 30 EPs can apply for hardship exceptions in the following categories: EP Hardship Exceptions

Eligible Hospital and CAH Hardship Exceptions 1.Infrastructure Eligible hospitals and CAHs must demonstrate that they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure (e.g., lack of broadband). 2.New Eligible Hospitals or CAHs New eligible hospitals and CAHs with new CMS Certification Numbers (CCNs) that would not have had time to become meaningful users can apply for a limited exception to payment adjustments. For CAHs the hardship exception is limited to one full year after the CAH accepts its first patient. For eligible hospitals the hardship exception is limited to one full-year cost reporting period. 3.Unforeseen Circumstances Examples may include a natural disaster or other unforeseeable barrier. 31 Eligible hospitals and CAHs can apply for hardship exceptions in the following categories

 Applying: EPs, eligible hospitals, and CAHs must apply for hardship exceptions to avoid the payment adjustments.  Granting Exceptions: Hardship exceptions will be granted only if CMS determines that providers have demonstrated that those circumstances pose a significant barrier to their achieving meaningful use.  Deadlines: Applications need to be submitted no later than April 1 for hospitals, and July 1 for EPs of the year before the payment adjustment year; however, CMS encourages earlier submission For More Info: Details on how to apply for a hardship exception will be posted on the CMS EHR Incentive Programs website in the future: 32 Applying for Hardship Exceptions

33 Physician Compare As required by the Affordable Care Act, CMS has implemented a plan for publicly reporting physician quality and patient experience metrics through the Physician Compare website. CMS continues to outline elements of that plan through rule making.

Physician Compare Targeted for Posting in 2014: Quality measures reported by group practices and ACOs participating in 2013 PQRS GPRO and reporting via the GPRO Web Interface Composite measures for DM and CAD Patient Experience Data for group practices and ACOs of 100+ EPs reporting through the GPRO Web Interface for 2013 PQRS GPRO Million Hearts Recognition for EPs reporting on the PQRS Cardiovascular Prevention measures group in PY 2013 Recognition of EPs who earn a PQRS Maintenance of Certification Incentive

35 Resources CMS PQRS Website CMS eRx Incentive Program Website PFS Final Rule Medicare and Medicaid EHR Incentive Programs Physician Compare FFS Provider Listserv PQRS Frequently Asked Questions (FAQs)

36 Costs of Non-Engagement Percent Reduction of the Professional Component of the Eligible Professional’s Medicare Payments Assumptions 1.* eRx - penalties are extended; there has been no formal announcement to that effect. 2. HITECH - If it is determined that for 2018 and subsequent years that less than 75 percent of EPs (MD, DO, DDS/DMD, DPM, OD, and Chiropractor) are meaningful users, then the payment adjustment will change by one percentage point each year until the payment adjustment reaches 95 percent eRx222* PQRS HITECH12345 Phys VBM

37 HITECH Incentive payments made through the Medicare Electronic Health Records (EHR) Incentive Program are subject to the mandatory reductions in federal spending known as sequestration, required by the Budget Control Act of The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months. As required by law, President Obama issued a sequestration order on March 1, Under these mandatory reductions, Medicare EHR incentive payments made to eligible professionals and eligible hospitals will be reduced by 2%. This 2% reduction will be applied to any Medicare EHR incentive payment for a reporting period that ends on or after April 1, If the final day of the reporting period occurs before April 1, 2013, those incentive payments will not be subject to the reduction. Please note that this reduction does not apply to Medicaid EHR incentive payments, which are exempt from the mandatory reductions.

38 HITECH CMS will audit 5 to 10 percent of those who attested to Meaningful Use in January 2013 to be audited before receiving any payments. Providers who receive an EHR incentive payment for either the Medicare or Medicaid EHR Incentive Program potentially may be subject to an audit. Eligible professionals (EPs), eligible hospitals, and critical access hospitals (CAHs) should retain ALL relevant supporting documentation (in either paper or electronic format) used in the completion of the Attestation Module responses.

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44 Maine HeathInfoNet Regional Extension Center