MIPS, MACRA, & CJR: MedicarePayment TransformationPresenter: Thomas Barber, M.D.May 31, 2016

Michael Porter- Value Based Care Delivery,Annals of Surgery 2008Principals:Define Value as a GoalCare should be Organized around theway value is createdThere is a need to measure valueValue Outcome/Cost

Berwick, IHI and the Triple Aim 2008 “The Triple Aim: Care, Health, And Cost”: HealthAffairs, Vol 27 #3 1. Improve the Experience of Care 2. Improve the Health of Populations 3. Reduce per capita Costs of Health Care “we will need new financing and competitive dynamics”

Medicare Payments “Large Variations in Medicare Payments for Surgery HighlightSavings Potential from Bundled Payment Programs”, HealthAffairs, November 2011, Vol 30 # 11, David Miller, et al Medicare episode payments for certain inpatient proceduresvaried by 49-130 percent Post discharge care accounted for a large proportion ofvariation in payments, as did discretionary physician services It can be argued that strong incentives exist for CMS expandor refine its bundled payment policies include spending forhome health

Risk and ComplexityCJR –totalJointBundleRISKMD OnlyAncillaryServicesKnee pecialties90 DayGlobalComplexity of ManagementACOPopulationManagement

What is “MACRA”?MACRA stands for the Medicare Access and CHIP Reauthorization Act of2015, bipartisan legislation signed into law on April 16, 2015.What does it do? Repeals the Sustainable Growth Rate (SGR) Formula Changes the way that Medicare pays clinicians andestablishes a new framework to reward clinicians for value overvolume Streamlines multiple quality reporting programs into 1 newsystem (MIPS) Provides bonus payments for participation in eligiblealternative payment models (APMs)

What is an Alternative Payment Model (APM)?APMs are new approaches to paying for medical care through Medicare thatincentivize quality and value.As defined byMACRA,APMsinclude: CMS Innovation Center model MSSP (Medicare Shared Savings Program) Demonstration under the Health Care Demonstration required by federal law(under section 1115A, other than a HealthCare Innovation Award)Quality Demonstration Program

Advanced APMs meet certain criteria.As defined by MACRA,advanced APMs must meetthe following criteria: The APM requires participantsto use certified EHRtechnology. The APM bases payment onquality measures comparableto those in the MIPS qualityperformance category. The APM either: (1) requiresAPM Entities to bear more thannominal financial risk formonetary losses; OR (2) is aMedical Home Modelexpanded under CMMIauthority.

PROPOSED RULEAdvanced APM Criterion 2:Requires MIPS-Comparable Quality MeasuresQualityMeasures An Advanced APM must base payment on qualitymeasures comparable to those under the proposedannual list of MIPS quality performance measures; No minimum number of measures or domainrequirements, except that an Advanced APM musthave at least one outcome measure unless there isnot an appropriate outcome measure available underMIPS.Comparable means any actual MIPS measures or other measures that areevidence-based, reliable, and valid. For example: Quality measures that are endorsed by a consensus-based entity; or Quality measures submitted in response to the MIPS Call for QualityMeasures; or Any other quality measures that CMS determines to have an evidencebased focus to be reliable and valid.

APMs: But, tough to meet the thresholds of participation:– 2019 and 2020, EPs must have 25% of Part B paymentsfor covered professional services furnished by APM thatmeets criteria of eligible alternative payment entity.– 2021/2022 50% of Part B payments– 2023 onward 75% of Part B payments

Calculating the Composite Performance Score(CPS) for MIPSCategoryQualityWeight50%Scoring Each measure 1-10 points compared to historicalbenchmark (if avail.)0 points for a measure that is not reportedBonus for reporting outcomes, patient experience,appropriate use, patient safety and EHR reportingMeasures are averaged to get a score for the category Resource Use10% Similar to qualityCPIA15% Each activity worth 10 points; double weight for “high”value activities; sum of activity points compared to a targetAdvancing careinformation25% Base score of 50 points is achieved by reporting at leastone use case for each available measureUp to 10 additional performance points available permeasureTotal cap of 100 percentage points available Unified scoring system:1. Converts measures/activities to points2. Eligible Clinicians will know in advance what they need to do to achieve top performance3. Partial credit available

Proposed RuleMIPS: Quality Performance CategorySummary: Selection of 6 measures 1 outcome measure and 1 cross-cutting measure, or otherhigh priority measure, OR Selection of a specialty-specific measure set Key Changes from Current Program (PQRS): Reduced from 9 measures to 6 measures with no domainrequirement Measure Applicability Validation (MAV) process is retired Year 1 Weight: 50%

PROPOSED RULEMIPS: Resource Use Performance CategorySummary: Assessment under all available resource use measures, asapplicable to the clinician CMS calculates based on claims so there are no reportingrequirements for clinicians Key Changes from Current Program (Value Modifier): Adding 40 episode specific measures to addressspecialty concerns Year 1 Weight: 10%

PROPOSED RULEMIPS: Clinical Practice Improvement Activity PerformanceCategorySummary: Minimum selection of one CPIA activity (from 90 proposedactivities) with additional scoring for more activities Full credit for patient-centered medical home Minimum of half credit for APM participation Key Changes from Current Program: Not applicable (new category) Year 1 Weight: 15%

PROPOSED RULEMIPS: Advancing Care InformationPerformance CategorySummary: Scoring based on key measures of health IT interoperabilityand information exchange. Flexible scoring for all measures to promote care coordinationfor better patient outcomes Key Changes from Current Program (EHR Incentive): Dropped “all or nothing” threshold for measurement Removed redundant measures to alleviate reportingburden. Eliminated Clinical Provider Order Entry and ClinicalDecision Support objectives Reduced the number of required public health registriesto which clinicians must report Year 1 Weight: 25%

Putting It All Together:2016 2017 2018 2019 2020 2021 2022 2023 2024 2025FeeSchedule 0.5% each yearNo change2026& on 0.25%or0.75%MIPSMax Adjustment( /-)QP inAdvanced 5% bonusAPM(excluded from MIPS)457999

CJR – Possible APM?

CJR Proposed Rule Key Points Hospital Initiator (owner) of Bundle Mandatory in 67 markets (1/3rd of all markets inUSA) Retrospective Payment Design Quality Thresholds Financial Options/Gainsharing with physicians and“collaborators” April 1, 2016 start

Components of the Model Triggered by MS-DRG 469 or 470 Includes hemiarthroplasty for hip fx, Total AnkleArthroplasty, Primary THR, TKR Services in the bundle include hospital services, allphysician services, post-acute care, PT. ALL In hospital & post acute expenses (for 90 days)

Retrospective Payment Design If the hospital meets quality thresholds and the totalspending is less than the calculated (anddiscounted) “target price” the hospital eligible for“reconciliation payment” from Medicare If the total spend is greater than the “target price,”the hospital must repay Medicare

Mandatory In 67 Markets “MSA”: Metropolitan Statistical Area2 stage stratified randomization to determine areasNeed for inclusion of entire marketRepresents about 1/3 of THA/TKA in the country

Quality Thresholds Hospital required to report on 2 quality measures:– Hosp Level Risk Standardized Complication RateFollowing Elective Primary THA and/or TKA– Hospital Consumer Assessment of Healthcare Providersand Systems (HCAHPS)

Pt Reported Outcome Measures Voluntary collection of PROMs May prove burdensome to measure; estimatedabout 75/pt to administer Cover the cost by reducing year 1 “discount” from2% to 1.7%

Quality Payments 50% Complication Measure 40% HCAPS 10% Voluntary PRO program Overall 0-100 score developed

Quality Payments 10% Below Acceptable: No Quality or TargetPayments 12% Acceptable: No Quality Bonus, yes targetpayment 64% Good 1% quality bonus, yes target payment 14% Excellent 1.5% Quality Bonus, yes targetpayment

How Can Hospitals Manage? Cherry Picking or Lemon Dropping Individual case management Proper systems/processes– Registries– Managing the entire care continuum– Careful co-management by hospital and doctor

Infrastructure Needs Quality MeasurementCare ManagementContracts & Relationships with SNF & Home HealthCollaborative EnvironmentCost Monitoring

The Seven Controllable Variables inPatient Outcome in Orthopedic icalExpertiseSystems/Hospital/F Processacility

California Hospitals 20132013 TOTAL HIPSHIPHospitalsVolumeInfectionsRate 2013 1001066314350.55%Less than 500 but more than 100137313912060.66%Less than 1000 but more than 50053154200.63%More than 10002244320.08%250433022630.61%HospitalsKNEE 1002013 TOTAL s than 500 but more than 100148381331720.45%Less than 1000 but more than 5001612153220.18%3375420.05%259609652170.36%More than 1000

The Best & The WorstKey BenchmarksQualityWorstAverageBestHospital Risk Standardized Complication .5%0.1%7%5%3%1.0%0.4%0.1%Revisions @ 5 yearsMortalityResource UseWorstLength of Stay% Discharged to SNFLOS in SNFProsthetic Cost 5,500.00AverageBest4.531.140%25%7%30204 3,500.00 2,100.00

More Implications Must have an infrastructure to gather quality data Must meet meaningful use Must be able to work cooperatively with otherstakeholders Need to lead the process in order to maximizerevenue

The Future Movement from 20% of Medicare Payments being“value based” to 80% by 2018 Medicare has identified 53 “bundles” being readiedto roll out over the next few years

Summary Bundled payments are here to stay The types of procedures covered will increase overtime Significant infrastructure changes are necessary inthe hospitals and office practices to adapt to thischange There will be greater risk

Key Areas of Concern Risk Adjustment - Including SocioeconomicSmall Practice IssuesInfrastructure NeedsPossible success strategiesInability to contract on in hospital issuesMeasure DevelopmentQCDR functionMedicare Data