Moving to Accountable Care through the ACA & MACRA

Jim Whitfill, MDPresident Lumetis, LLC

Clinical Associate Professor, Departments of Internal Medicine and Biomedical Informatics University of Arizona College of Medicine-Phoenix

2

Introduction

• Macro trends have come together to drive legislation that incorporates cost and quality as variables in reimbursement from CMS

• MACRA legislation brings relief from the SGR fee schedule cuts but brings performance standards to fee for service Medicare payments

• Advanced payment models interact with MACRA and can offer an alternative for very specific groups of physicians

3

Macro Factors Influencing US Healthcare System

4

Federal Costs Rising

5

Employer and Employee Costs Rising

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits

6

Healthcare Costs in the Elderly Drive US Costs

http://blogs-images.forbes.com/danmunro/files/2014/04/hccostsbyage.pngHagist; Kotlikoff. Working Paper 11833 National Bureau of Economic Research Dec 2005Fischbeck, Paul. "US-Europe Comparisons of Health Risk for Specific Gender-Age Groups.” Carnegie Mellon University: September 2009

7

Cms.gov 1/2015

8

CMS Pushing for Cost and Quality Transparency to Get More Care for Same or Fewer Dollars

Alternate Payment Methods (ACO/BPI)

Managed Medicare/MA

Fee for Service/MIPS

• Choice• Quality • Cost

9

Where Did MACRA Come From?

(US physicians missed this cut by hours)

10

Incremental Approach Towards Quality with Medicare in the 2000s

• Tax Relief and Health Care Act of 2006 began what is Physician Quality Reporting System (PQRS)

• Health Information Technology for Economic and Clinical Health Act (HITECH) of 2009 added Meaningful Use adoption of EHR technology

• Affordable Care Act (ACA) of 2010 created the Value Based Modifier to add differential payments to physicians based on cost and quality

11

2014: The Boiling Point

• Federal macro costs out of control

• Overlapping quality programs and threats of annual fee schedule cuts from SGR top target for AMA

• Strong desire at CMS to align cost and quality with payment

11

12

Medicare Access & CHIP Reauthorization Act of 2015 (passed April 2015)

• Repeals the SGR Formula

• Ties Part B Fee Schedule to cuts or increases based on cost & quality

• Combines three quality reporting systems into one (with 3 parts…)

• Incentivizes providers into Advanced Alternative Payment Models (AAPMs)

MIPS brings threats of fee schedule cuts and incentives based on MIPS scores

• All providers are required to participate in MIPS in 2017, proposed rule

• First reporting period 1/1/2017 to 12/31/2017

• Payments adjusted in 2019 based on performance in the 2017 period

• MIPS is budget neutral so any incentives are paid for via cuts to other providers

• However there is a budget exempt $500 million dollars for “exceptional” performance in the first 5 years

May 3, 2016

The Advisory Board Health Care Cheat Sheet SeriesMACRA: Educational Briefing for IR Professionals, April 2016

14

CMS Estimates of MACRA Impacts

• Solo Providers: 87% will suffer falling reimbursement rates

• 2-9 Providers: 70% will experience falling reimbursement rates

• 25-99 Providers: 55% will experience a rise in reimbursement

• >100 Providers: 81% projected to see a rise in reimbursement

https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program-merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm

15

Proposed Timeline

16

MIPS Score: First Year

Quality Category50% of score in year 1; replaces the Physician Quality Reporting System

Advancing Care Information Category*25% of score in year 1; formerly Meaningful Use

Clinical Practice Improvement Activities Category15% of score in year 1

Cost Category*10% of score in year 1; replaces the Value Modifier Program, also known as Resource Use) *For clinicians who do not meet these

category requirements, CMS proposes reweighting the score to 0 and recalculating the other categories.

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MIPS-Scoring-Methodology-slide-deck.pdf

Quality Metric Consolidation: MIPS: Quality

MIPS Quality Score (80-90 points)• Clinicians choose either 6 measures to

report:– 1 must be a crosscutting measure;– 1 must be an outcome or other “high

quality” measure

• OR may choose to report a specialty measure set

• MIPS will also calculate either 2 or 3 populations measures based on claims data, no additional reporting is needed.

– For individuals & groups of 2-9, MIPS calculates 2 population measures.

– For groups of 10+, MIPS calculates 3 population measures.

PQRS

6-9 Measures out of 284

Claims, and registries used for submission

Value Based Modifier (3)

Hospital admissions for ACSC

30 day all cause readmissions

18

Advancing Care Information (ACI) (max 100 points)

BASE SCORE: 50 points, 6 measures

PERFORMANCE SCORE: up to 80 points

• Max combined score = 100• Clinicians must use certified

EHR technology• No longer all-or-nothing

reporting• If the measures are not

applicable for a clinician, CMS may reweight the whole category to zero and adjust the weighting of the remaining categories

19

Clinical Practice Improvement Activities

Max Total Points: 60There are 90+ activities in the following categories:• Weighted: some are 20

points, others are 10• “Clinicians who are not

patient-facing (for example, pathologists or radiologists) will only need to report on one activity.”

• Clinicians will receive credit toward scores for participating in APMs (50%) and Patient-Centered Medical Homes (100%)

20

Resource Use/Cost

• MIPS calculates cost category scores based on Medicare claims, no additional reporting is required

• Uses 40+ “episode-specific measures to account for differences among specialties”

• Must see a sufficient # of patients, generally a min 20-patient sample is required

• If the clinician does not have enough patient volume, CMS may reweight the whole category to zero and adjust the weighting of the remaining categories

• Excluded for APM participants

• Reported in 2017 but does not count towards MIPS in year 1

21

MIPS Participant Exemptions

Are newly enrolled in Medicare;

Have < $30,000 in Medicare charges AND have < 100 Medicare patients;

Are significantly participating in an AAPM.

22

Medicare Shared Savings Program

– Track 1-Upside Risk only (2012 -)

∙ Retrospective attribution

∙ Max sharing rate 50%

∙ Payment limit 10%

∙ MSR: 2-4%

– Track 2- Upside and Downside Risk (2012-)

∙ Retrospective attribution

∙ Max sharing rate 60%

∙ Payment limit 15%

∙ Lower MSR and now with choice in MSR/MLR levels

∙ Loss limit 5%|7.5%|10%

– Track 3 (2015- ) Upside and Downside Risk

∙ Prospective Attribution

∙ Max sharing rate 75%

∙ Payment limit 20%

∙ More waivers

∙ Loss limit 15%

Sharing Rate: % of total savings to the MSSPMSR: Minimum Savings Rate. Threshold to receive $$MLR: Maximum Loss Rate: Threshold to pay $$Payment Limit: Maximum limit on savings $$Loss Limit: Maximum limit of $$ paid for losses

ACO Start DateOwnership/Structure

Service AreaPCP's

Attributed members/

#Beneficiaries

Banner Health Network* 1/1/2012BH, BPHO, BMG, AIP

Maricopa and Pinal Counties200 63,000

Arizona Care Network 1/1/2012Dignity Abrazo

Arizona331 29,000

Yavapai Accountable Care 1/1/2012Independent Physicians

Yavapai and Coconino CountiesNR 5,000

Commonwealth PCACO 1/1/2012Independent PCP's

Arizona, New Mexico100 16,000

Arizona Connected Care 4/1/2012Community Providers, TMC

Southern Arizona195 5,600

JC Lincoln ACO 7/1/2012JC Lincoln Health

Phoenix Metro140 14,800

Premier 1/1/2014Independent Physicians

Lakewood CANR 5,000

Scottsdale Health Partners 1/1/2014SHC & SPO

Maricopa Counties100 18,000

ASPA-Connected Care 1/1/2015Independent Physicians

Arizona, New Mexico30 5887

North Central AZ

Accountable Care1/1/2015

YRMC, NAH, Affil iates

Yavapai & Coconino Counties 54 10,800

Abacus ACO 1/1/2016Independent Physicians Southern

ArizonaNR NR

Optum ACO** 1/1/2016Optum Medical Network

Maricopa County203 37,000

*Pioneer Model ** Next Generation Model All others MSSP Model

Arizona Medicare ACO’s

24

CMS “Fast Facts” About ACOs (Jan 2017)• PROGRAM SIZE

– 480 Shared Savings Program ACOs

– 9 million assigned beneficiaries in 50 states plus Washington, DC and Puerto Rico

• PAYMENT CHARACTERISTICS

– Track 1 (one-sided) 438 ACOs (91%)

– Track 2 (two-sided) 6 ACOs (1%)

– Track 3 (two-sided/prospective) 36 ACOs (8%)

– Advance Payment (CMMI Initiative) 45 ACOs ( 9%)

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/All-Starts-MSSP-ACO.pdf

25

MSSP Results to Date

2012 2013 2014 2015

Earned Shared Savings 29 55 92 120

Achieved Savings below MSR 25 60 89 83

Increased Spending 60 88 223 230Increased Spending and Owed Money 0 1 0 0

Total # MSSP 114 204 404 433

26

New Payment Mechanism in Next Gen Model

• Goals of payment mechanisms:

– Offer ACOs the opportunity for stable and predictable cash flow

– Facilitate investment in infrastructure and care coordination.

• Alternative payment flows do not affect beneficiary out-of-pocket expenses or net CMS expenditures.

27

Interactions between MIPS and Track 1 MSSP

• No MSSP providers need to report additional quality measures outside MSSP reporting

• MSSP TINs will still need to report ACI measures

• MSSP providers will receive 100% credit in the CPIA category in 2017

• MSSP not scored on cost under MIPS

28

APM Scoring Standard

29

APM Scoring Standard

MACRA Timeline

2015& Earlier

2016 2017 2018 2019 2020 2021 2022 2023 2024 20252026

& Beyond

+0.5% +0.5% +0.5% +0.5%

0 0 0 0 0 0

PQRS

MU

Value Modifier(+/-)4%

(+/-)5%

(+/-)7%

(+/-)9%

(+/-)9%

(+/-)9%

(+/-)9%

+0.25%

+0.75%

Physician Payment Updates

MIPS Payment Adjustment

APM Bonus +5% annual bonus

TRA

CK

1TR

AC

K 2

Qualifying participants in an APM are exempt from MIPS

31

Qualifying Advanced APMs for 2017• Advanced Alternative Payment Models vs Alternative Payment

Models : only the former will count for incentives and MIPS exemption

• Comprehensive ESRD Care (CEC) - Two-Sided Risk• Comprehensive Primary Care Plus (CPC+)• Next Generation ACO Model• Shared Savings Program - Track 2• Shared Savings Program - Track 3• Oncology Care Model (OCM) - Two-Sided Risk• Comprehensive Care for Joint Replacement (CJR) Payment

Model (Track 1- CEHRT)• Vermont Medicare ACO Initiative (as part of the Vermont All-

Payer ACO Model)

32

AAPM Incentive Payments

33

Advanced APM Requirements Can Be Financial or Patient Volume Based

• In 2019-2020: requirements are for Medicare payments and patients only.• In 2021: non-Medicare payers and patients may count towards

participation requirements

Qualifying APM

% of Claims Volume* Needed Through APM

0%

10%

20%

30%

40%

50%

60%

70%

80%

2019 2020 2021 2022 2023 2024+

Medicare Only Option

APM %

0%

10%

20%

30%

40%

50%

60%

70%

80%

2019 2020 2021 2022 2023 2024+

All-Payer Option

Medicare APM% Total APM%

* Alternatively, patient count thresholds would also be measured

35

CMS Expects Most Providers to Be Subject To MIPS

37

38

Macro Economics in a Trump Administration Have Not Changed

CBO 2015 Infographic

39

Unravelling the ACA: A Three Front War

• Executive Orders

- Broad guidance to reduce regulation and increase discretion to blunt effects from the ACA

- Could eliminate mandate (IRS already not flagging returns)

- Could expand Medicaid waivers

- Opens door for intrastate insurance markets

- Could undo some ACA taxes

• Reconciliation

- Simple majority in Senate

- Limited to spending and tax changes

- Taxes and subsidies could be repealed

- Byrd rule prevents use if no impact on budget

• New Legislation

- Need 60 votes in the Senate to proceed

Obamacare

• Penalties (tax) for not having insurance

• Subsidies to Insurers for premium and co-pay support

• Expand Medicaid with 90-100% Federal funding

• Mandatory coverage of many conditions

• No lifetime limits and no preexisting conditions

Trumpcare

• Premiums increase without continuous coverage

• HSAs and tax credits for individuals

• Reform Medicaid to be a defined contribution program

• Relax coverage requirements to allow more access *

• Use high risk pools to insure the most costly patients *

https://www.nytimes.com/2017/02/16/us/politics/affordable-care-act-congress.html?_r=0

41

Employer Provided Insurance, Medicare, & Medicaid Likely to Follow Patterns from Employer Provided Retirement Plans

42

High Risk Pools: State level 1976-2013

• Estimated need for HRP in 2011: 4 Million

• First pools offered by MN and CT in 1976

• 35 states had risk pools in 2012 pre ACA and covered 212,000 people

– Medically eligible

– HIPAA eligible (covers those who had but lost group benefits)

– HCTC eligible

– Medicare Eligible

• Pools vary but always have

– Elevated premiums at 150-200% of market

– Pre-exisiting condition exclusions for 6-12 months

– Lifetime limits of 1-2$ million (some as low as $3,000 per year)

– Deductibles generally $1000-$2500

• All pools lost money

– 2011 $1.2 Billion/$5500 per enrollee

– Paid by state via assessments on non-group private insurance and other state sources

J Gen Intern Med. 2011 Jan; 26(1): 91–94http://kff.org/health-reform/issue-brief/high-risk-pools-for-uninsurable-individuals/

44

Selling Health Insurance Across State Lines

• RI, WY, GA, KT, ME each have laws to allow selling insurance across state lines

– AZ legislature passed a bill in 2012 but it was vetoed

• No state has had success in attracting out of state insurers

– National bills have not been endorsed by insurance lobbying groups when entered in Congress

• Large employers already self insured and not subject to state regulation

• Barrier to entry: regulatory vs network development

http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf401409

48