On April 27, 2016, the Department of Health & Human Services Centers for Medicare & Medicaid Services (CMS) released its proposed rule regarding models for tying professional reimbursement to quality. While this may be great news for providers who enjoy the challenges of tracking and reporting data, these challenges are going to cause problems (namely, reimbursement reductions) for some providers. Regardless of whether providers think this is good or bad, providers should start looking at the proposed regulations now because, as proposed, quality-based payments will be a fact of life for all physicians, mid-levels, CRNAs and groups effective Jan. 1, 2019. The regulations will be published in the May 9, 2016, Federal Register. The comment period will officially start at that time and run through 5 p.m. on June 27, 2016.

The new quality-based reimbursement will take the form of the Merit-based Incentive Payment System (MIPS) unless a provider participates in an alternative payment model (APM). The MIPS consolidates components of three current programs that are ending – the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program. Under the MIPS, payment will be based on scores for performance within four categories that are weighted as follows:

Click here to view table.

Notably, weight for advancing care information could decrease (not below 15 percent) if the Secretary estimates that the proportion of physicians who are meaningful EHR users is 75 percent or greater. The remaining weight would then be reallocated to one or more of the other performance categories. CMS estimates it will take a total of six hours for a clinician’s billing clerk to review the quality measures list, review the various submission options, select the most appropriate submission option, identify the applicable measures or specialty measure sets for which they can report the necessary information, review the measure specifications for the selected measures or measures groups, and incorporate submission of the selected measures or specialty measure sets into the office work flows.

The only exclusion from the MIPS for a provider (other than a low-volume provider with less than $10,000 in allowable claims and fewer than 100 Medicare patients or a new provider) is participating in an APM. An APM model is proposed to mean: (1) a model under section 1115A of the Act (other than a health care innovation award); (2) the shared savings program under section 1899 of the Act; (3) a demonstration under section 1866C of the Social Security Act; and (4) a demonstration required by federal law. Of course, exclusion from MIPS for providers participating in an APM does not mean that APM participants are free from quality measures because APMs incorporate various quality measures.Notably, weight for advancing care information could decrease (not below 15 percent) if the Secretary estimates that the proportion of physicians who are meaningful EHR users is 75 percent or greater. The remaining weight would then be reallocated to one or more of the other performance categories. CMS estimates it will take a total of six hours for a clinician’s billing clerk to review the quality measures list, review the various submission options, select the most appropriate submission option, identify the applicable measures or specialty measure sets for which they can report the necessary information, review the measure specifications for the selected measures or measures groups, and incorporate submission of the selected measures or specialty measure sets into the office work flows.

Why should a provider care about MIPS and APMs? Because, beginning in 2019, payments to providers will be affected by performance within these programs. Specifically, the amounts paid to individual eligible clinicians will be subject to adjustment through one of two mechanisms, depending on whether the eligible clinician meets the threshold for participation in an APM or is instead evaluated under MIPS.

  • For APMs, from 2019 through 2024, eligible clinicians receiving a substantial portion of their revenue through Advanced APMs and meeting other applicable requirements to become “qualified APM participants” would receive a lump-sum payment after each year equal to 5 percent of their Medicare covered professional services for services reimbursed according to the physician fee schedule in the preceding year.
  • MIPS-eligible clinicians would receive positive, neutral, or negative adjustments to their PFS payments in a payment year based on performance during a prior performance period. At least initially, CMS estimates there will be $833 million in negative adjustments – but an equal amount of positive adjustments and an additional $500 million in exceptional performance payments. Adjustments to performance will be calculated using an applicable percent for each year as follows: (i) for 2019, 4 percent; (ii) for 2020, 5 percent; (iii) for 2021, 7 percent; and (iv) for 2022 and subsequent years, 9 percent. For example, a provider in the lowest performance threshold in 2019 (the worst performers) would receive a 4 percent reduction to payments; whereas the best performers could receive a payment increase of greater than 4 percent due to the exceptional performance bonus.

Although 2019 may seem far off, all physicians, mid-levels, CRNAs and groups that plan on billing Medicare after 2019 should take the time to review the proposed regulations because these regulations are going to impact reimbursement going forward after that date. Entities that have been successful in complying with current programs such as PQRS or the EHR Incentive Program may not have significant hurdles to overcome; however, entities that have tried to get by without paying attention to these types of programs may have a lot of work to do. Identifying issues and questions now offers the opportunity to submit the issues and questions to CMS and potentially obtain clarification or even changes to the regulations – so start reading and let CMS know what you think.