National Programs - CMS (MACRA)

 

The Centers for Medicare and Medicaid Services (CMS)

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As part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the permanent fix to Medicare's sustainable growth rate (SGR formula), the Merit-Based Incentive System (MIPS) will combine three existing incentive programs by 2017 (PQRS, value-based payment modifier, and meaningful use of electronic health records), resulting in payments by 2019 (327). By 2018 the vast majority of providers will be required to submit data to MIPS or an alternative payment model (APM) such as an accountable care organization (329) in order to be eligible for full medicare payments. To qualify as an APM, programs must: require use of certified EHR technology, link payment to quality measures similar to those in the MIPS category, and require participation in the APM to bear “more than nominal financial risk” (427). For its implementation in 2019, the law will only apply to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. Expansion to other nonphysician professionals who bill under the physician fee schedule may occur in 2021 (428). 

 

Physician composite scores of 0-100 points based on performance in quality, resource use, clinical practice improvement, and meaningful use of EHR technology will be calculated. Each year CMS will establish a performance threshold, with physicians meeting the threshold being eligible for a bonus and those below the threshold being administered a linear sliding-scale negative payment adjustment based on how far below the threshold they fall. Incentives will vary yearly as CMS cannot pay out more in bonuses than they withold in penalties becuase the system is budget neutral (428). The wording of MACRA leaves providers with numerous uncertainties due to the discretion CMS has in how the law is actually implemented. Mulvany urges providers to monitor the regulatory process related to MACRA closely, develop a strategic and financial framework for evaluating whether to default to MIPS or seek participation in an APM, and begin/continue experimenting with payments that transfer some degree of risk to providers (427).

 

It is believed that the implementation of MIPS will shift the predominant reliance upon fee-for-service payments that has shaped much of the healthcare culture over the past two decades. The US Department of Health and Human Services (HHS) is aiming to have 90% of fee-for-service payments tied to quality and performance by 2018 (327). Even prior to the implementation of MACRA, an increasing amount of Medicare hospital payments are tied to one of Medicare’s three pay-for-performance programs (Hospital Readmission Reduction Program, Value-Based Purchasing Program, and the Hospital-Acquired Condition Reduction Program). Kahn and colleagues predicted that in 2015 four out of five eligible hospitals would be penalized by one of the three programs and one out of three teaching hospitals will be penalized by all three programs. They, as well as others, have said reevaluation of program components may be necessary. Impovements could include: ensuring risk-adjustment appropriateness, minimizing program overlap and differences in scoring, increasing incentive to improve even if well below target levels, and considering alternatives to the current three programs (353). For a history of how we got to MIPS, read on.

 

CMS embraced P4P as a way to both lower costs and improve care. The implementation of P4P by CMS was rapid (56, 102, 225), but Glendinning (11) cautioned to prioritize quality improvement over cost control, Trapp (56) suggested that sustaining P4P will be challenging, Aston (235) advised against setting quality thresholds too high, and Glendinning (240) points out that clinicians were disappointed with delays in feedback from CMS. The implementation of P4P by CMS has raised many political issues, some of which are discussed in this site’s Politics and Law section. In addition to their Physician Quality Reporting Initiative (PQRI) which begun in 2007, CMS developed and implemented numerous pilot and demonstration projects to investigated P4P in different settings. From the outset CMS undertook a rigorous effort, described by Kmetik (243), to develop quality measures. Various hospital-based CMS programs are outlined (43, 183, 208). Other CMS P4P demonstration projects are outlined in articles by Glendinning and Kauter (11, 116). The Physician Quality Reporting Initiative (PQRI) is described by Stulberg, (175), while Bagley (171) walks clinicians through participation in the PQRI. Articles by Wennberg (156, 157) highlight how Medicare can improve quality and reduce spending through P4P. PQRI was successful enough to become the more permanent Physician Quality Reporting System (PQRS) in 2012, which was the precursor for MIPS in 2017.

 

 

 

CMS National Program Literature

Key Articles: 353, 427, 428

(11) Glendinning D. Medicare tests pay-for-performance: The AMA urges focus on quality improvement over cost control in the demonstration project. American Medical News. Feb. 21, 2005.

Link: http://www.ama-assn.org/amednews/2005/02/21/gvl10221.htm

Summary:

  • Article outlines the CMS P4P demonstration project in 10 large clinics by Medicare.
  • Addresses concerns, especially those regarding cost cutting reasoning.
  • Up front costs will be high, and it will take a lot of time to see dividends.

Significance to Literature:

AMA urges focus on quality improvement over cost control.

 

 

(31) Terry K. Score one for CMS. Medical Economics. June 16, 2006.

Link: http://medicaleconomics.modernmedicine.com/memag/Medical+Economics+magaz...

Summary:

  • P4P was used by CMS to divert decreased compensation to physicians.
  • Reimbursement is expected to decrease in future years.
  • P4P in non-Primary care settings will be difficult.

Significance to Literature:

Outline political deal making over compensation between CMS and AMA.

 

 

(43) Abelson R. Bonus Pay By Medicare Lifts Quality. The New York Times. January 25, 2007.

Link: http://www.nytimes.com/2007/01/25/business/25care.html

Summary:

  • News article outlines a Medicare hospital experiment in 266 hospitals to determine effectiveness of incentives and public reporting.
  • Hospital outcomes improved, which supports idea of rewarding care, and “a step in the right direction.”

Significance to Literature:

January 2007 news article covering 3-year Medicare hospital based P4P experiment.

 

 

(56) Trapp D. Medicare quality reporting called a promising start. American Medical News. March 17, 2008.

Link: http://www.ama-assn.org/amednews/2008/03/17/gvsa0317.htm

Summary:

  • 1/6 eligible physicians reported quality data to CMS, 50% will receive bonuses.
  • Experts worry that a 1.5% bonus is not enough for more growth.

Significance to Literature:

Sustaining and expanding CMS P4P will be difficult.

 


(102) Trapp D. Medicaid measures performance. American Medical News. August 6, 2007.

Link: http://www.ama-assn.org/amednews/2007/08/06/gvsa0806.htm

Summary:

  • Documents growth of P4P in Medicaid.
  • Provides case examples of Alabama, Maine, and Pennsylvania
    • e.g. In North Carolina physicians as a whole have improved 20-25% on process measures such as flu shots.
  • Questions whether P4P is worth physicians’ time due to the amount of reimbursement.

Significance to Literature:

Overview of some recent advances in Medicaid P4P.

 

 

(116) Kautter J, Pope GC, Trisolini M, Grund S. Medicare Physician Group Practice Demonstration Design: Quality and Efficiency Pay-for-Performance. Health Care Financing Review. 2007: 29(1) 15-29.

Link: http://www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/PGP_Demo_Design.pdf

Summary:

  • Paper outlines Medicare’s first Pay-for-Performance Physician Group Practice demonstration project from a business perspective.
  • Details who is participating, beneficiary assignment, measurements, performance payments, and reporting.
  • Supplies an outline of provider feedback about reason for participating and strategies for better care.
  • Outlines some of the benefits and challenges of P4P.

Significance to Literature:

Provides a business perspective of Medicare’s P4P demonstration project beginning in April, 2005, through publication of article in the fall, 2007.

 

 

(156) Wennberg JE, O’Connor AM, Collins ED, Weinstein JN. Extending The P4P Agenda, Part 1: How Medicare Can Improve Patient Decision Making And Reduce Unnecessary Care. Health Affairs. 2007: 26(1) 1564-1574.

PMID: 17978377

Summary:

  • CMS should extend its pay-for-performance to a shared-decision-making process, as Medicare should support informed patient choice as the standard of practice for preference-sensitive care.
  • Article proposes strategies to address the three major barriers to rapid adoption of informed patient choice.

Significance to Literature:

Article addresses conflicts at the intersection of P4P and patient choice.

 

 

(157) Wennberg JE, Fisher ES, Skinner JS, Bonner KK. Extending The P4P Agenda, Part 2: How Medicare Can Reduce Waste and Improve The Care Of The Chronically Ill. Health Affairs: 2007: 26(6) 1575-1585.

PMID: 17978378

Summary:

  • CMS should use P4P to ensure that within ten years all severe chronically ill patients have access to accountable health care organizations providing evidence-based care.
  • Outlines strategies to reform the treatment of the chronically ill:
  • Develop a research program for chronic care.
  • Share the savings realized with providers.
  • Use P4P to transition to cost-effective care for chronic care patients.
  • Implement a non-participation penalty.

Significance to Literature:

P4P can be utilized to appropriately manage chronic illness cost effectively.

 

 

(171) Bagley, B. Measuring for Medicare: The Physician Quality Reporting Initiative. Family Practice Management. June, 2007. 37-40.

Link: http://www.aafp.org/fpm/20070600/37meas.html

Summary:

  • Offers an overview on how the process of collecting and reporting data for the Physician Quality Reporting Initiative (PQRI) works, and how a clinic can participate.
  • Also points out that participating may not only provide monetary rewards, but also more consistent care, and more active quality improvement.

Significance to Literature:

Walks clinicians through participation in the CMS PQRI.

 

 

(175) Stulberg J. The Physician Quality Reporting Initiative—A Gateway to Pay for Performance: What Every Health Care Professional Should Know. Quality Management in Health Care. 2008: 17(1) 2-8.

PMID: 18204372

Summary:

  • Article examines PQRI, its key features, and discusses its possible implications
  • PQRI, a nationwide CMS quality measurement reporting program, will provide important groundwork for quality improvement if health care professional choose to report data.
  • PQRI is low-risk because it rewards for reporting only, and does not penalize for poor results.
  • PQRI affects individual Medicare providers.

Significance to Literature:

Overview of PQRI sponsored by CMS.

 

 

(183) Huff C. Good is Never Enough for P4P. Hospitals and Health Networks. 2008: 82(6) 26-32.

PMID: 18666732

Summary:

  • Hospitals in Medicare’s P4P demonstration project are working harder to continue to raise quality scores.
  • 4 case studies are discussed in the article that outlines hospitals efforts to improve quality of care.

Significance to Literature:

There is much debate about the direct effectiveness of P4P, but it is unquestionable that reporting hospitals in the demonstration project are improving.

 

 

(205) Milgate K, Cheng SB. Pay-for-Performance: The MedPAC Perspective. Health Affairs. 25(2) 413-419.

PMID: 16522581

Summary:

  • Article describes rationale for MedPAC backing of CMS use of quality incentives.
  • Issues that CMS must address include how rewards should be distributed, the evolution of the measures, and the number, type, and relative weights of the measures.

Significance to Literature:

Although CMS faces many challenges with P4P, choosing P4P was a step towards improving quality care.

 

 

(208) Grossbart SR. What’s the Return? Assessing the Effect of “Pay-for-Performance” Initiatives on the Quality of Care Delivery. Medical Care Research Review. 2006: 63 29S-48S.

PMID: 16688923

Summary:

  • Author analyzes the effects of the CMS P4P Premier demonstration project in a multi-hospital healthcare system (4 hospitals), while comparing 3 clinical areas against a similar hospital (6 hospitals) system not participating in the CMS program.
  • Study compared acute myocardial infarction, pneumonia, and heart failure guidelines followed over a 1 year time span.
  • Although both groups had performance improvement gains, the group participating in Premier’s demonstration project improved more. (89.7% vs. 85.6% composite quality scores, p<.001)
  • Participating hospitals were noted as collaborating amongst each other to report trends that worked and did not work.
  • It was also noted that leadership and hospital communications helped the new P4P program function well.

Significance to Literature:

The CMS premier project seems to aid quality improvement in both participating and non-participating hospitals, but more so in participating hospitals.


 

(225) Glendinning D. Doctors still can try for bonuses as Medicare expands quality reporting. American Medical News. May 26, 2008.

Link: http://www.ama-assn.org/amednews/2008/05/26/gvl10526.htm

Summary:

  • CMS has expanded its quality measures from 74 to 119.
  • CMS will also begin to allow data submission on qualified registries.
  • Article outlines milestones as CMS rolls out its program.

Significance to Literature:

CMS expands its quality reporting program in 2008.

 

 

(235) Aston G. Practices hit Medicare P4P quality targets, but bonuses still fall short. American Medical News. September 8, 2008.

Link: http://www.ama-assn.org/amednews/2008/09/08/gvl10908.htm

Summary:

  • After the second year of the PGPD, all 10 groups met performance measurements in 25 of the 27 measures, and 5 practices achieved the goals of all 27 measures.
  • However, only four groups received performance bonuses because CMS requires savings to exceed 2% when compared with the community control group in order to payout.
  • The AMA has expressed concerns that the current project is too focused on cost savings, and not quality improvement.

Significance to Literature:

It will be difficult to persuade physician groups if the bar for receiving payments is too high.

 

 

(240) Glendinning D. Medicare rated as poor performer during debut of pay-for-reporting. American Medical News. November 17, 2008.

Link: http://www.ama-assn.org/amednews/2008/11/17/gvl11117.htm

Summary:

  • Physicians and the AMA are disappointed with the lack of support and feedback provided by CMS.
  • Only 20% of surveyed physicians were able to download their 2007 feedback reports which told doctors whether or not they qualify for certain bonuses.

Significance to Literature:

A major change in CMS is needed to get physicians quicker feedback that they can use to improve their care.

 

 

(243) Kmetik K. PCPI: What you should know about Consortium performance measures. The Journal of Family Practice. 2007: 56(10A) 8A-12A.

Link: http://www.jfponline.com/ccp_article.asp?aid=5506

Summary:

  • Helps explain how many common P4P measures were developed for The Physician Consortium for Performance Improvement (PCPI).
  • Hundreds of physicians from all fields worked in measure-development work groups to develop guidelines with the highest level of evidence and strongest clinician recommendation.
  • Measures were open for public input, scrutinized by professionals, and re-edited numerous times before final implementation.

Significance to Literature:

Measures designed for the PCPI were agreed upon after much rigorous labor and debate.

 

 

(303) Glendinning D. CMS touts hospital demo as proof of pay-for-performance promise. American Medical News. February 19, 2007.

Link: http://www.ama-assn.org/amednews/2007/02/19/gvl10219.htm

Summary:

  • 30 Quality measures saw an average of 12% improvement in the first two years of the P4P hospital demo.
  • The next step is either a mandatory pay-for-reporting, or CMS may decide to make the leap to linking all measured quality scores to reimbursement.

Significance to Literature:

It will be an important step in the CMS program to decide which program to make mandatory, pay-for-reporting or P4P.

 

 

(327) Steinbrook R. The Repeal of Medicare's Sustainable Growth Rate for Physician Payment. JAMA. 2015;313(20):2025-2026. doi:10.1001/jama.2015.4550.

PMID: 25885640

Summary:

  • As part of a permanent fix to Medicare’s sustainable growth rate (SGR) formula, the Merit-Based Incentive Payment System (MIPS) will combine three existing incentive programs by 2019:
    • Physician Quality Reporting System
    • Value-based payment modifier
    • Meaningful use of electronic health records
  • MIPS will assess performance with four criteria: (1) Quality, (2) Resource use, (3) Meaningful use of health records, (4) Clinical practice improvement activities.
  • US Department of Health and Human Services (HHS) hopes to “have 85% all Medicare fee-for-service payments tied to quality by 2016, and 90% by 2018” as well as “to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016 and 50% of payments by 2018.”

Significance to Literature:

Overview of the repeal of Medicare’s sustainable growth rate (SGR) and planned implementation of the Merit-Based Incentive Payment System (MIPS)

 

 

(329) Walker T. MIPS versus APM: Four Factors Physicians Need to Consider. Ophthalmology Times. October 1, 2015.

Summary:

  • By 2019 physicians will be mandated to participate in Merit-Based Incentive System (MIPS) or an alternative payment model (APM)
  • APM options include ACOs, Patient-Centered Medical Homes, Bundled payments.
  • Although there may appear to be some time before the obligatory participation, author recommends choosing performance-based programs now.

Significance to Literature:

There is no one-size-fits all program and those who are prepared ahead of time will be more successful when MIPS or APM participation is required.

 

 

Key Article

(353) Kahn CN 3rd et al. Assessing Medicare's hospital pay-for-performance programs and whether they are achieving their goals. Health Affairs. 2015 Aug;34(8):1281-8. doi: 10.1377/hlthaff.2015.0158.

PMID: 26240240

Summary:

  • An increasing amount of Medicare hospital payments are tied to one of Medicare’s three pay-for-performance programs (Hospital Readmission Reduction Program, Value-Based Purchasing Program, and the Hospital-Acquired Condition Reduction Program)
  • In 2015, four out of five eligible hospitals will be penalized by one of the three programs and one out of three teaching hospitals will be penalized by all three programs

Significance to Literature:

Reevaluation of program components may be necessary. Authors propose ensuring risk-adjustment appropriateness, minimizing program overlap and differences in scoring, increasing incentive to improve even if below target levels, and considering alternatives to the current three programs.

 

Key Article

(427) Mulvany C. MACRA: the Medicare physician payment system continues to evolve. Healthc Financ Manage. 2016 Feb;70(2):32-5.

PMID: 26999974

Summary:

  • Summary of what is contained in MACRA, how it affects physicians, and recommendations for providers before its implementation in 2019
  • Starting in 2019 physician and physician extenders will need to participate in the Merit-Based Incentive System (MIPS) or an Alternative Payment Model (APM)
  • Congress offers two financial incentives for professionals to participate in qualifying APMs, including a 0.5% increased Medicare annual update compared to MIPS beginning in 2026 and a 5% annual bonus payment from 2019-2024
  • To qualify, APMs must:
    • Require use of certified EHR technology
    • Link payment to quality measures similar to those in the MIPS category
    • Require participation in the APM to bear “more than nominal financial risk”
  • The wording of MACRA leaves providers with numerous uncertainties due to the discretion CMS has in how the law is actually implemented. Providers should:
    • Monitor the regulatory process related to MACRA closely
    • Develop a strategic and financial framework for evaluating whether to default to MIPS or seek participation in an APM
    • Begin/continue experimenting with payments that transfer some degree of risk to providers

Significance to Literature:

Summary of the implications of MACRA and how to prepare for its implementation in 2019


 

Key Article

(428) Demehin A, Jackson M. Dissecting New Medicare Physician Pay. Trustee. 2016 Mar;69(3):17-9, 1.

PMID: 27125119

Summary:

  • In addition to the implementation of a predictable Medicare fee schedule, MACRA aims to move payment away from fee-for-service and towards a payment system tied to patient outcomes and population health
  • CMS seeks to accomplish this by encouraging participation in either the MACRA-created default Medicare payment scheme called the Merit-Based Incentive System (MIPS) or an alternative payment models (APM)
  • For its implementation in 2019, the law will only apply to physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists
  • Expansion to other nonphysician professionals who bill under the physician fee schedule may occur in 2021,
  • Physician composite scores of 0-100 points based on performance in four categories:
    • Quality
    • Resource use
    • Clinical practice improvement
    • Meaningful use of EHR technology
  • Each year CMS will establish a performance threshold:
    • Physicians at or above the threshold will receive no financial penalty or a bonus
    • Physicians below the threshold will receive a linear sliding-scale negative payment adjustment based on how far below the threshold they reside
    • Because the payment system is budget neutral, CMS cannot pay out more incentive than they withhold in penalties
  • Hospitals will be directly and indirectly affected by the new payment system:
    • Hospitals that employ physicians will bear the burden of implementation and compliance costs, as well as financial withholdings due to poor performance
    • More physicians may seek employment or contractual relationships with hospitals to achieve stability and potentially minimize their financial risk
    • Hospitals will experience pressure to participate in APMs

Significance to Literature:

Summary of key aspects of MACRA with an added focus on the implications on hospitals

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