1. Centers for Medicare & Medicaid Services
George Washington University Residency Fellowship in Health Policy October 12, 2016
Kate Goodrich, MD, MHS Director Center for Clinical Standards and Quality
Centers for Medicare & Medicaid Services

2. Agenda Delivery System Reform Goals Progress to data on Improvement
Medicare Access and CHIP Reauthorization Act (MACRA)

3. During January 2015, HHS announced goals for value-based payments within the Medicare FFS system
As of January 01, 2016, the 30% goal was achieved one year ahead of schedule.

4. Delivery System Reform requires focusing on the way we pay providers, deliver care, and distribute information “ { }
Improving the way providers are incentivized, the way care is delivered, and the way information is distributed will help provide better care at lower cost across the health care system. “
FOCUS AREAS
Pay
Providers
Deliver
Care
Distribute
Information
Source: Burwell SM. Setting Value-Based Payment Goals ─ HHS Efforts to Improve U.S. Health Care. NEJM 2015 Jan 26; published online first.

5. CMS has adopted a framework that categorizes payments to providers
Category 1:
Fee for Service – No Link to Value
Category 2:
Fee for Service – Link to Quality
Category 3:
Alternative Payment Models Built on Fee-for-Service Architecture
Category 4:
Population-Based Payment
Description
Payments are based on volume of services and not linked to quality or efficiency
At least a portion of payments vary based on the quality or efficiency of health care delivery
Some payment is linked to the effective management of a population or an episode of care
Payments still triggered by delivery of services, but opportunities for shared savings or 2-sided risk
Payment is not directly triggered by service delivery so volume is not linked to payment
Clinicians and organizations are paid and responsible for the care of a beneficiary for a long period (e.g., ≥1 year)
Medicare Fee-for-Service examples
Limited in Medicare fee-for-service
Majority of Medicare payments now are linked to quality
Hospital value-based purchasing
Physician Value Modifier
Readmissions / Hospital Acquired Condition Reduction Program
Accountable Care Organizations
Medical homes
Bundled payments
Comprehensive Primary Care initiative
Comprehensive ESRD
Medicare-Medicaid Financial Alignment Initiative Fee-For-Service Model
Eligible Pioneer Accountable Care Organizations in years 3-5
Maryland hospitals
Source: Rajkumar R, Conway PH, Tavenner M. CMS ─ engaging multiple payers in payment reform. JAMA 2014; 311:

6. CMS is aligning with private sector and states to drive delivery system reform
CMS Strategies for Aligning with Private Sector
Convening Stakeholders
Convened payers in 7 markets in CPCI
Convening payers, providers, employers, consumers, and public partners for the Health Care Payment Learning and Action Network
Incentivizing Providers
In Pioneer ACOs, agreements required Pioneers to have 50% of business in value- based contracts by the end of the second program year
Partnering with States
The State Innovation Model Initiative funds testing awards and model design awards for states implementing comprehensive delivery system reform
The Maryland All-Payer Model tests the effectiveness of an all-payer rate system for hospital payments
CMS is working stakes and stakeholders to drive market transformation, extending the effects of Medicare and Medicaid changes.
CMS as convener: CMS convenes payers, provider, employers, consumers, state and federal partners to align on alternative payment models
Example: Health Care Payment Learning and Action Network
Incentivize Providers: CMS requires providers to bring other payers to the table
Examples: Pioneer ACOs, Health Care Innovation Awards Round 2
Partner with states: CMS works with states, which have broad regulatory authority to drive payment and delivery system reform
Examples: State Innovations Model, Maryland All-Payer Model, Multi-Payer Advanced Primary Care Practice, system-wide Medicaid transformations such as Oregon

7. Six Years Later - Affordable Care Act

8. Results: Higher Value, Lower Costs
According to the Congressional Budget Office, federal spending on major health care programs in 2020 will be $200 Billion lower than predicted in 2010.

9. 'Jaw-dropping': Medicare deaths, hospitalizations AND costs reduced
Sample consisted of 68,374,904 unique Medicare beneficiaries (FFS and Medicare Advantage).
1999
2013
Difference
All-cause mortality
5.30%
4.45%
-0.85%
Total Hospitalizations/
100,000 beneficiaries
35,274
26,930
-8,344
In-patient Expenditures/
Medicare fee-for-service beneficiary
$3,290
$2,801
-$489
End of Life Hospitalization (last 6 months)/100 deaths
131.1
102.9
-28.2
Findings were consistent across geographic and demographic groups.
Mortality, Hospitalizations, and Expenditures for the Medicare Population Aged 65 Years or Older, ; Harlan M. Krumholz, MD, SM; Sudhakar V. Nuti, BA; Nicholas S. Downing, MD; Sharon-Lise T. Normand, PhD; Yun Wang, PhD; JAMA. 2015;314(4): ; doi: /jama

10. Major Reductions in Harm AHRQ 2010 Baseline & Results to Date
145 Harms/1,000 Discharges
2010
142 Harms/1,000 Discharges
2011
132 Harms/1,000 Discharges
2012
121 Harms/1,000 Discharges
2013
2014
Source: Secretary Burwell announces results of patient safety improvement efforts, HHS News Release, December 2, 2014.

11. National Momentum on Patient Safety Substantial Progress Thru 2014, Compared to 2010 Baseline
17 percent reduction in overall harm; 39 percent reduction in preventable harm
87,000 lives saved
$19.8B in cost savings from harm avoided
2.1M fewer harms over 4 years
Source: Agency for Healthcare Research & Quality. “Saving Lives and Saving Money: Hospital-Acquired Conditions Update. Interim Data From National Efforts To Make Care Safer, ” December 1, 2015.

12. PfP National Scorecard by AHRQ Earns “Geppetto Checkmark”
Significant omissions and/or exaggerations
President Obama uses AHRQ analysis in remarks on 5th anniversary of ACA
“Fact Checker” awards Geppetto Checkmark
One of three Geppettos awarded*
Most popular “Fact Check” for April 2015
AHRQ analysis published in December 2014 on the impact of the Partnership for Patients
Fact Checker, by Glenn Kessler
The Geppetto Checkmark
“the truth, the whole truth, and nothing but the truth”
One Pinocchio
Some shading of facts
Two Pinocchios
Significant omissions
Three Pinocchios
Significant factual errors
*97 “Fact Checker” articles published January 2015 through April 15, 2015
see:

13. Medicare all-cause, 30-day hospital readmission rate is declining
Legend: CL: control limit; UCL: upper control limit; LCL: lower control limit

14. Beneficiaries move to MA plans with high quality scores
Medicare Advantage (MA) Enrollment Rating Distribution
Sent prompt to beneficiaries enrolled in plans with 2.5 star rating or lower
Letters only sent to beneficiaries in consistently low-rated plans
Switch rate 44% (prompt) v. 21% (no prompt)
20%
29%
5-star
45%
4-star
3-star
2-star
61%
57%
45%
Beneficiaries are making choices based on quality—each year more and more beneficiaries are selecting 4 and 5-star MA plans. 9% 5% 1%
2012
2013
2014
% 4 or 5 star
29%
37%
55%
% 2 or 3 star
71%
63%
45%

15. Using Information to Make Better Decisions
Quality comparison websites for nursing facilities, hospitals, physicians/clinicians and ultimately all major provider types
Data releases on spending, quality, charges, and other consumer-relevant information
Quality rating system for qualified health plans
Electronic Heath Record adoption
Participate in the learning and action network

16. QUALITY PAYMENT PROGRAM
The Medicare Access & Chip Reauthorization Act of 2015
QUALITY PAYMENT PROGRAM

17. Quality Payment Program
Repeals the Sustainable Growth Rate (SGR) Formula
Streamlines multiple quality reporting programs into the new Merit-based Incentive Payment System (MIPS)
Provides incentive payments for participation in Advanced Alternative Payment Models (APMs)
The Merit-based Incentive Payment System (MIPS) or
Advanced Alternative Payment Models (APMs)
The proposed rule is the next step in actually putting the new system envisioned by MACRA into place, in the form of the new Quality Payment Program. I want to thank you for all that you did to make this happen. It was thanks to strong support from medical associations and other stakeholders, that MACRA was signed into law last year. I also want to ask for your continued help, support, and input as we move forward with implementation.
MACRA replaced a patchwork collection of quality programs with a single system where every Medicare physician and clinician has the opportunity to be paid more for better care. Doctors will be able to practice as they always have, but will also have the chance to get paid more for high quality care and investments that support patients. There are two paths to quality in this program:
O The Merit-based Incentive Payment
O The Advanced Alternative Payment Models
In developing the rule, we were guided by the core goals of the legislation –streamlining and strengthening quality-based payments for all physicians; rewarding participation in Advanced Alternative Payment Models that create the strongest incentives for quality and coordinated care; and giving clinicians flexibility to choose how to participate in the new system.
We will be providing tools and education to help you get ready for performance year Clinicians can visit go.cms.gov/QualityPaymentProgram for more information. In addition, we’re organizing groups across the country, so you can have local help as you get ready.
First step to a fresh start
We’re listening and help is available
A better, smarter Medicare for healthier people
Pay for what works to create a Medicare that is enduring
Health information needs to be open, flexible, and user-centric

18. Medicare Payment Prior to MACRA
Fee-for-service (FFS) payment system, where clinicians are paid based on volume of services, not value.
The Sustainable Growth Rate (SGR)
Each year, Congress passed temporary “doc fixes” to avert cuts (no fix in 2015 would have meant a 21% cut in Medicare payments to clinicians)
Unfortunately, costs regularly exceeded predicted targets, and since 2002 Congress has regularly passed temporary so-called “doc fixes” to avert cuts. The fix meant that the deficit or cut would roll over to the next year, compounding the problem. For example, no “doc fix” in 2015 would have resulted in a 21% payment cut across the board to clinicians.
Instead of relying on these last minute “doc fixes,” MACRA replaces the SGR with a more predictable payment method that promotes value over the long term.
MACRA replaces the SGR with a more predictable payment method that incentivizes value.

19. Medicare Reporting Prior to MACRA
Currently there are multiple quality and value reporting programs for Medicare clinicians:
Medicare Electronic Health Records (EHR) Incentive Program
Physician Quality Reporting Program (PQRS)
Value-Based Payment Modifier
Another thing to know about Medicare today is that there are currently a number of different quality and value reporting programs—for example the Physician Quality Reporting Program, Value Based Payment Modifier and Medicare Electronic Health Record Incentive Program [TRANSITION]

20. Medicare Reporting Prior to MACRA
MACRA streamlines these programs into MIPS.
Medicare Electronic Health Records (EHR) Incentive Program
Physician Quality Reporting Program (PQRS)
Value-Based Payment Modifier
MACRA streamlines these programs into one new quality reporting system, known as the Merit-Based Incentive Payment System, or “MIPS.”
Merit-Based Incentive Payment System (MIPS)

21. MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS)

22. 2 : a MIPS: First Step to a Fresh Start MIPS is a new program
Streamlines 3 currently independent programs to work as one and to ease clinician burden.
Adds a fourth component to promote ongoing improvement and innovation to clinical activities.
MIPS provides clinicians the flexibility to choose the activities and measures that are most meaningful to their practice to demonstrate performance. 2 : a
Talking points:
MIPS Principles
Use a patient-centered approach to program development that leads to better, smarter, and healthier care
Develop a program that is meaningful, understandable and flexible for participating clinicians
Design incentives that drive movement toward delivery system reform principles and APMs
Ensure close attention to excellence in Implementation, operational feasibility, and effective communication with stakeholders
Quality
Resource use
Clinical practice improvement activities
Advancing care information

23. Who Will Participate in MIPS?
Affected clinicians are called “MIPS eligible clinicians” and will participate in MIPS. The types of Medicare Part B health care clinicians affected by MIPS may expand in the first 3 years of implementation.
Years 1 and 2
Years 3+
Secretary may broaden Eligible Clinicians group to include others such as
Affected clinicians are known officially as “eligible professionals” (EPs). In years 1 and 2, EPs will include physicians, PAs, nurse practitioners, clinical nurse specialists and nurse anesthestists.
But the types of Medicare Part B clinicians who will participate in MIPS will likely expand during the first three years of implementation of the law.
For example, in years 3 and beyond, the group of EPs will be expanded to include a much larger group, ranging from physical therapists to dieticians. The exact groups included will be defined in rule-making, expected to be released later in 2016.
Physical or occupational therapists, Speech-language pathologists, Audiologists, Nurse midwives, Clinical social workers, Clinical psychologists, Dietitians / Nutritional professionals
Physicians (MD/DO and DMD/DDS), PAs, NPs, Clinical nurse specialists, Nurse anesthetists

24. 1 Who will NOT Participate in MIPS?
There are 3 groups of clinicians who will NOT be subject to MIPS: 1
So what are the exceptions to participation in MIPS? There are actually three groups of clinicians who will NOT be subject to MIPS. These include
Those in their first year of Medicare Part B participation
Those that have a very low volume of patients. (The exact threshold for “low volume” is also yet to be defined, but will likely be defined in rulemaking to be released later in 2016)
And certain participants in eligible alternative payment models, or “APMs” (we’ll talk more about this later)
In addition to these three groups, it’s very important to clarify that MIPS does NOT apply to hospitals or facilities – it applies to individual clinicians.
FIRST year of Medicare Part B participation
Below low patient volume threshold
Certain participants in ELIGIBLE Alternative Payment Models
Medicare billing charges less than or equal to $10,000 and provides care for 100 or fewer Medicare patients in one year
Note: MIPS does not apply to hospitals or facilities

25. Alternate payment models (apms)

26. What is an Alternative Payment Model (APM)?
APMs are new approaches to paying for medical care through Medicare that incentivize quality and value.
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
As defined by MACRA, APMs include:
So what is an alternative payment model, or APM? Some of you may have heard of this term or even be in an APM yourself. Alternative Payment Models are new approaches to paying for care in ways that incentivize quality and value. Broadly speaking, these models differ from regular fee-for-service in that providers are accountable for both the cost AND the quality of care of patients in their model.
It’s important to note that MACRA has a specific definition for APMs. According to MACRA statute, APMs include: CMS Innovation Center models, the Medicare Shared Savings Program, demos under the Health Care Quality Demonstration program, and demos required by federal law.

27. Advanced APMs meet certain criteria.
As defined by MACRA, advanced APMs must meet the following criteria:
The APM requires participants to use certified EHR technology.
The APM bases payment on quality measures comparable to those in the MIPS quality performance category.
The APM either: (1) requires APM Entities to bear more than nominal financial risk for monetary losses; OR (2) is a Medical Home Model expanded under CMMI authority.
So that’s what APMs in general include. But now we want to talk about advanced APMs, which are the most sophisticated APMs. According to MACRA, advanced APMs have to meet certain criteria which include:
basing payment on quality measures comparable to those in MIPS,
requiring use of EHR, and
either bearing more than nominal financial risk OR being a medical home model expanded under CMMI authority.
That all might sound pretty technical – the main takeaway point here is that advanced APMs are the most advanced APMs and must meet these specific criteria. It is a very high bar to be an “advanced APM.”

28. Note: MACRA does NOT change how any particular APM functions or rewards value. Instead, it creates extra incentives for APM participation.
So how do these special alternative payment models fit into the broader changes in MACRA? The key point is that MACRA creates extra incentives for APM participation. It does NOT change how any particular APM rewards value. That is, its goal is not to replace existing incentives, but to supplement them. You entered an APM to practice care in responsible ways, and MACRA is a way to acknowledge and reward you for that commitment.

29. In Advanced APM, but not a QP
Note: Most practitioners will be subject to MIPS.
Subject to MIPS
QP in Advanced APM
Not in APM
In non-Advanced APM
While the financial incentives for participating in an advanced APM and getting the bonus are large, it’s important to note that most people will likely not be QPs and therefore will not receive the bonus and instead will be subject to MIPS. No matter which side of the dotted line you fall on in this picture, however, the Quality Payment Program provides multiple ways for practitioners to be rewarded for responsible practice, and multiple incentives to participate in APMs.
In order to avoid duplicative reporting across APMs and MIPS while still holding APM participants accountable for MIPS goals to the extent feasible, we propose unique reporting and scoring standards for APM participants who do not become QPs.
In Advanced APM, but not a QP
Some clinicians may be in Advanced APMs but not have enough payments or patients through the advanced APM to be a QP.
Note: Figure not to scale.

30. Maximum MIPS Payment Adjustment (+/-)
MIPS adjustments and APM Incentive Payment will begin in 2019.
2017
2018
2019
2020
2021
2022
2023
2024
2025
+4%
+9%
+5%
+7%
MIPS
-4%
-5%
-7%
-9%
Maximum MIPS Payment Adjustment (+/-)
QP in Advanced
Bonuses to qualified participants in advance APMs will also begin in 2019 and last till That 5% bonus payment will be based on the estimated total payment received by the provider for the prior year. So that means that a clinician’s bonus in 2019 will be based on payment for services in 2018.
APM
+5% bonus
(excluded from MIPS)

31. The Quality Payment Program:
The Medicare Access & Chip Reauthorization Act of 2015
The Quality Payment Program:
Pick Your Pace!

32. Advanced Alternative Payment Models
Quality Payment Program:
Pick Your Pace in Year One
Clinicians will pick their pace for the first year – both in how they participate and when.  We expect that everyone who is eligible for the Quality Payment Program will participate.
We’ve announced four options that we plan to further describe in the final rule:
Test
Participation or
Partial
Participation or
Full Participation
Pick Your Pace: Physicians will pick their pace for the first year – both in how they participate and when. We designed the final rule to allow physicians to pick how they phase into the program. We’ve announced three choices:
Test: Physicians may choose any point in 2017 to begin. As long as they submit some 2017 quality information to Medicare by March 2018, they will avoid a negative payment adjustment. This first option is designed to help physicians test their systems and prepare for broader participation in 2018 and 2019.
Partial: Physicians may choose to participate for part of the calendar year. This means they could begin later than January 1, 2017 and their practice could still qualify for a small bonus.
Full: For practices ready to go on January 1, 2017, they may choose to participate for a full year and may qualify for a modest bonus. We've seen physician practices of all sizes successfully submit a full year’s quality data, and expect many will be ready to do so.
Of course, clinicians can also choose to join an Advanced Alternative Payment Model in 2017 and potentially qualify for a 5 percent bonus. or
Advanced Alternative Payment Models

33. Contact Information
Kate Goodrich, MD MHS Director, Center for Clinical Standards and Quality