1. MACRA & Value-Based Payment Trudi Matthews Managing Director Kentucky Regional Extension Center March 24, 2017
The information contained in this presentation is for general information purposes only. The information is provided by UK HealthCare’s Kentucky Regional Extension Center and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to content.

2. Kentucky REC Description
Kentucky Regional Extension Center Overview
UK’s Kentucky REC is a trusted advisor and partner to healthcare organizations, supplying expert guidance to maximize quality, outcomes and financial performance
Kentucky REC Description
REC Service Lines
Physician Services
Meaningful Use & Mock Audit
Security Risk Analysis & Project Management
Patient Centered Medical Home (PCMH) Consulting
Patient Centered Specialty Practice (PCSP) Consulting
Value Based Payment & MACRA Support
Hospital Services
Meaningful Use
HIPAA Security Assessment
Electronic Quality Reporting Support
To date, the Kentucky REC’s activities include:
Helping bring over $100 million incentive dollars to providers throughout the Commonwealth
Assisting more than 3,400 individual providers across Kentucky, including primary care providers and specialists
Helping more than 95% of the Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) within Kentucky
Working with more than 1/3 of all Kentucky hospitals
Supporting dozens of practices and multiple health systems with practice transformation and preparation for value based payment

3. Volume to Value Based Shift
Recent legislative, regulatory and marketplace developments suggest that the transition from volume to value-based payment is accelerating from a “testing” phase to a “scaling” phase
Pioneer ACO Program Launched
April 2013
Bundled Payments for Care Improvement (BPCI)
Medicare Access and CHIP Reauthorization Act (MACRA) Enacted
April 2015
July 2016
Cardiac & CJR Episode Payment NPRM Released
January 2012
October 2012
Hospital Value Based Purchasing Program
April 2016
MACRA NPRM,
Medicaid Managed Care Final Rule Released
CMS Announces Value-Based Payment Goals; Value Modifier Program Begins
January 2015
March 2010
October 2016
Affordable Care Act Enacted
MACRA Final Rule Released
Testing Phase
Scaling Phase

4. MACRA Has Bipartisan Support
MACRA was passed on April 14, 2015 by both houses of a Republican-controlled Congress, had substantial Democratic support and was signed by a Democratic president. It is highly unlikely it will be repealed under the new administration.
MACRA Vote in Congress
Senate Vote: House Vote:

5. MACRA Creates New Medicare Payment Program
APM
MIPS
Merit-based Incentive Payment System
Alternative Payment Models

6. MACRA Glossary of New Terms
New program name for MACRA’s change in Medicare Part B payments
Quality Payment Program (QPP)
New pay for performance approach under Medicare
Merit-Based Incentive Payment System (MIPS)
New payment models (e.g., ACOs) that move away from fee-for-service reimbursement
Alternative Payment Models (APMs)
Overall clinician score from calculated based on four weighted performance categories
Final Score
Category that replaces PQRS; worth 60% of final score in Yr 1
Quality
New name for resource use category; replaces value modifier program; not assessed in Yr 1
Cost
Category that replaces the Medicare EHR Incentive Program for meaningful use; worth 25% in Yr 1
Advancing Care Information (ACI)
New category; worth 15% of final score; includes activities aimed at improving care
Improvement Activities

7. MACRA Eligible Clinicians (ECs)
Physicians, PAs, NPs, CNS, CRNA
After 2020, CMS may expand to other clinicians in Medicare FFS: PT, OT, NMW, CSW, Clinical Psychologists, Dieticians and Nutrition professionals
5 Types of Eligible Clinicians (ECs)
Hospitals/Medicare Part A payments
FQHCs/RHCs and Medicaid Providers (non dual-eligible)
Not covered by MACRA:
1st year ECs
Less than $30K and/or 100 Medicare patients
Advanced APM Qualifying Provider
Exclusions:
“Non-patient facing” clinicians
MIPS APMs
Different Scoring & Reporting Requirements:

8. Maximum MIPS Payment Adjustments
Notes:
Losers fund winners
Top performers: - Up to 3X more with scaling factor
- Additional bonus up to 10% from
$500 M funded separately
Non-participation
Only
Source: Leavitt Partners - MACRA: Quality Incentives, Provider Considerations, and the Path Forward

9. MACRA Timeline October 14, 2016: Release of Final Rule Jan – Dec 2017:
1st Performance Period for MACRA
March 31, 2018: Reporting Deadline for First Year
Jan – Dec 2019:
1st Payment Year = +/- up to 4%

10. MIPS: A Consolidation of 3 Programs
MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS)
Physician Value-Based Modifier
Physician Quality Reporting System
EHR Incentive Program and Meaningful Use

11. New 2017 Reporting Options QPP Option 1: Test Submission Option 2:
Partial Submission
Option 3:
Full Submission
Option 4:
Advanced APM

12. MIPS Performance Measurement
Providers will receive a MIPS final score based on 4 weighted performance categories: 
Improvement activities
Advancing Care Information
MIPS
Final Score
0-100
Quality
Cost
CY19
60% 0%
15%
25%
CY20
50%
10%
CY21
30%

13. Improvement activities Advancing Care Information
MIPS Reporting Timeframe
For 2017 / Transition Year 
Improvement activities
Reporting Deadline:
Advancing Care Information
March 31st
Quality
Cost
90 day- full year optional
No reporting required
90 days
90 days- full year optional

14. Advancing Care Information
Submission Methods
Category
Individual
Group/TIN
Quality
Qualified Data Registry (QCDR)
Qualified Registry
EHR
Claims
QCDR
Administrative Claims
CMS Web Interface
CAHPS for MIPS Survey IA
Attestation
ACI
Advancing Care Information

15. Year 1 Thresholds Already Set
0-2 Points =
Penalty
3 Points Minimum Threshold
No Penalty,
No Reward
Between 4-69 Points =
Some Bonus Possible
70+ = Exceptional Performance, Split $500M Pool

16. Quality % Final Score: Measures: Requirements Methods:
Makes up 60% of your final score for PY 2017
Replaces PQRS; # of measures from 9 down to 6 measures
200+ measures to choose from
6 Measures are reported
Except for:
Groups using CMS web interface report 15 quality measures
MIPS – APMS report via CMS web interface
1 measure must be:
Outcome measure OR
High-priority measure
Measures updated each year
Specialist sets available
Methods for reporting:
QCDR
EHR
Qualified Registry
Web interface (groups only)
Claims (individual only)

17. Improvement Activities
% Final Score:
Measures:
Requirements:
Method:
Makes up 15% of your final score for PY 2017
Full points for:
Certified PCMH/PCSP
Medical Home Model or Certain APMS
MIPS - APMS get 50% of full pts
90+ Activities in 9 subcategories
Access
Population Management
Beneficiary Engagement
Care Coordination
Patient Safety
Equity
…among others!
40 pts needed , 2-4 Activities
Highly weighted = 20 pts
Medium weighted = 10 pts
Medical home, transformation or public health activities have higher weight
Simple attestation suffices for reporting
Must be performed for a 90 consecutive day period

18. Advancing Care Information
% Final Score:
Measures:
Requirements:
Reporting:
Makes up 25% of your final score
Replaces Medicare EHR Incentive Program
5 requirements in base score, can report more in for additional points
Flexible Scoring:
Base Score
Performance Score
Bonus
New Data Blocking Requirements
Group/TIN Level reporting like PQRS

19. Cost % Final Score: Measures: Requirements: Method:
Score is based off of Medicare claims, including:
Measure 1:
Spending per Beneficiary (MSPB)
Measure 2:
Total costs per capita for all attributed beneficiaries
Makes up 0% of your final score for PY 2017
In later years scored higher
ECs will get feedback on this category in Quality and Resource Use Report (QRUR)
New 10 episode-specific cost measures
When clinician bills Medicare for diagnosis code gets included in episode
Minimum # of patients sample. Typically 20 or > 35 for MSPB
No data submission required
Validation of data is important!

20. What’s the big deal about APMs?
CMS intention states more and more of its $ will be spent in APMs over time
5% Annual Participation Bonus for Advanced APM participants from
Favorable scoring under MIPS for all APM participants
Annual update after 2025 is 0.75% for APM entities versus 0.25% for MIPS entities

21. Advanced Alternative Payment Models
Advanced APM participants are eligible for 5% bonus payment. But, only some APMs are risk-bearing Medicare payment models that qualify for this bonus payment.
Next Generation ACO Model
Medicare Shared Savings Program – Tracks 2 & 3
Comprehensive Primary Care Plus (CPC+)
Comprehensive ESRD Care Model
Oncology Care Model Two-Sided Risk Arrangement (in 2018)
Cardiac & CJR Episode Model (in 2018)
In new MACRA
Final Rule, Advanced APMs include:
MACRA does not change how any particular APM rewards value.
APM participants who are not “Qualifying Providers” (QPs) will receive favorable scoring under MIPS.

22. Catch: Not Every APM Participant Will Qualify for the 5% APM Bonus
Most physicians and practitioners who participate in APMs will be subject to MIPS and will receive favorable scoring under MIPS.
All APM
Participants
Advanced APM Participants
Clinicians in Advanced APMs will be deemed Qualifying APM Participants (“QPs”) if they:
Report APM quality measures comparable to MIPS
Use of Certified EHR
Meet Advanced APM criteria (risk-bearing or medical home model)
Must meet APM thresholds for payment and patient volumes
QPs
What kind of APMs will qualify for a Bonus?
Have to be a qualifying physician in an eligible APM to get 5% bonus.
Eligible APMs are the most advanced APMs that meet the following criteria according to the MACRA law:
Base payment on quality measures comparable to those in MIPS
Require use of certified EHR technology
Either (1) bear more than nominal financial risk for monetary losses OR (2) be a medical home model expanded under CMMI authority
Have to meet thresholds to qualify:
More than 25% of Medicare payments in APM in 2019, 2020
More than 50% of Medicare payments in APM in 2021, 2022
More than 75% of Medicare payments in APM in 2023
Option for combined all payer APM thresholds: Beginning in 2021, this threshold % may be reached through a combination of Medicare and other non-Medicare payer arrangements, such as private payers and Medicaid.
Only QPs receive the 5% bonus
from Medicare.

23. Impact of MACRA on Medicare Providers
Financial & Strategy Implications
Reputational Status
MACRA moves Medicare payment from one size fits all to a meritocracy
Market share will shift from low performers to high performers over time
Laggards will have to make exponential leaps in value to catch up with those that perform better as thresholds increase over time
Publicly available scores on quality and value that compare organizations/professionals will affect:
Health plan negotiations
Talent recruitment
Consumer choice

24. Next Steps
Team
Assessment
Action Plan

25. New Integrated Skills & Relationships Required
Leadership
Finance IT
Quality Improvement
Clinical Operations

26. Sample Quality & Resource Use Report

27. Immediate Actions to Consider
Engage leadership & key clinicians
Analyze QRUR and other payer feedback
Dominate your quality data
Medical home recognition to accelerate culture change

28. Some clinicians think MACRA means…
Stop seeing sick, non-compliant patients
Start accepting only patients who are healthy
But successful VBP/APM leaders understand the 5-50 Rule:
5% of patients are responsible for 50% of costs
The ACO program has a greater chance of success…where you have sicker patients who are overutilizing health services and you can make corrections by applying outpatient care management. Your patients will get better, and you’ll be able to improve quality and save money. There’s not too much to fix when you have a population where everyone is eating their vegetables and going to the gym.
Jose F. Pena, MD, chief executive officer and chief medical director of Rio Grande Health, Managed Healthcare Executive, “CEO of ACO shares how it saved nearly $12 million in year 1,” June 15, 2016

29. Playbook for the Value Journey
Culture of Continuous Quality Improvement & Team Based Care
Patient Attribution & Empanelment
Performance Measurement, Data Analysis and Identification of Gaps in Evidence-based Care
Identification of Higher Risk, High Cost Patients & Targeted Care Management
Care Coordination across the Medical Neighborhood
Patient Engagement & Experience of Care

30. A National Support Network

31. MACRA Module 1 CME Credit FREE
Created to prepare healthcare providers for changes under MACRA and Value-Based Payment

32. Connect with Kentucky REC
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33. Thank you!
Questions?