MACRA, MIPS, and APMs: Clear as Mud?

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Clear as mudLast week Diana Strubler provided a wonderful overview of the MACRA implementation requirements published 10 days ago. This massive 962-page tome contains something for everybody. Over the past 6 years, I have read every proposed and final MU rule, along with the annual PFS sections for PQRS and the physician VM, and I must say this beast is easily the most complex of the bunch. Hat’s off to Diana for providing last week’s overview with such a short runway! Today let’s turn to the back half of the proposed rule and try to unpack the mystical Advanced Alternative Payment Model (Advanced APM) and define what it takes to qualify for the CMS carrot attached to its use.

New dictionary

One of the reasons this document is so complicated is because our good friends at CMS have introduced a boatload of new terms. Reminds me of reading a work of fiction that contains dozens of characters with unusual names—you have to constantly flip back to the beginning of the book to remember who’s who. War and Peace anyone?

So let’s start from the beginning. In years past you were considered an “eligible professional”. That’s no longer the case. In the world of MIPS and APMs you are now an “eligible clinician”. Also lumped into the eligible clinician bucket are NPs, PAs, and a host of other providers with NPI numbers. As Diana pointed out last week, as an eligible clinician the MIPS and APM clock starts ticking on January 1, 2017. The “performance period” (i.e. the surveillance period) for the 2019 MIPS adjustment is calendar year 2017. Stated another way, your upside/downside exposure to MIPS in 2019 depends very much on what you do next year. Likewise, your eligibility for the APM bonus, which includes a monetary payout and the opportunity to avoid most of MIPS, is based on what you do next year. Newly minted docs and those of you who see no more than 100 Medicare beneficiaries and collect less than $10,000 in Part B revenue each year are excluded from the tyranny of MIPS and you can stop reading this post.

What’s an APM?

CMS paints this canvas with a broad stroke. There is a table in the middle of this document (table 32 on page 501 for those of you keeping score at home) that serves up a laundry list of advanced payment models: every flavor of ACO (Medicare Shared Savings Program tracks 1, 2, and 3 along with NextGen), BPCI, ESCOs, the compulsory Comprehensive Care for Joint Replacement (a personal favorite), the Oncology Care Model, and the list goes on. Basically if CMMI produced it, or if it is part of the ACA Medicare Shared Savings Program (MSSP), you will find it on the list.

Having said that, the proposed rule has decided we need several APM categories in order to add a bit of complexity to the MACRA implementation. Within the proposed rule, I see at least three APM categories:

  • Advanced APMs
  • Other Payer Advanced APMs

Before we unpack each flavor of APM, let’s tackle another new definition from our friends at the agency: the “APM entity”. An APM entity is an entity that participates in an APM through a contract with a payer. Stated another way, if you are a doc (eligible clinician) participating in an APM (like an ACO or an ESCO) through a contractual relationship, you are part of a specific APM entity. This is an important concept because the proposed rule suggests that your performance in both the MIPS and the APM tracks of this program may be scored as a group as opposed to an individual provider…so be careful who you partner with. More on this later.

What’s a MIPS APM?

A MIPS APM is defined as an APM that meets the following three criteria:

  1. APM entities participate in the APM under an agreement with CMS,
  2. The APM entities include at least one eligible clinician on the Participation List, and
  3. The APM bases payment incentives on performance (either at the APM entity or eligible clinician level), cost/utilization, and quality measures.

Note, every MSSP ACO and all ESCOs would be considered MIPS APMs. The importance of this distinction is that if you are one of the docs in a MIPS APM, you are now part of an APM entity and that impacts how you report data for MIPS. Generally this impact is favorable (you don’t need to separately report quality measures to satisfy MIPS because the APM is already reporting quality for you), but pay attention to this distinction as it is a potential source of confusion.

What’s an Advanced APM?

That’s a very good question. An Advanced APM is the only type of APM in which your participation could lead to becoming a “QP” (honestly I am not making this up). A QP (qualifying APM participant) is an eligible clinician (like you) participating in an Advanced APM (like an ESCO) who clears the financial hurdles established within the proposed rule, and in doing so receives the APM Incentive. Makes perfect sense, no? Let’s regroup a bit. CMS will identify an APM as an Advanced APM if the following three criteria are present:

  1. Require participants to use certified EHR technology,
  2. Provide payment for covered professional services based on quality measures comparable to those used in the quality performance category of MIPS (read PQRS-like measures), and
  3. Be either a Medical Home Model or bear more than a nominal amount of financial risk.

Returning back to table 32 on page 501 of the proposed rule, one finds Large Dialysis Organization ESCOs and several flavors of the ACO (MSSP tracks 2 and 3 along with Next Gen ACOs) included in the Advanced APM category. Noticeably missing from a nephrologist’s perspective are the Small Dialysis Organization ESCOs (there is one of these in existence today) and the track 1 MSSP ACO, which is by far the most common Medicare ACO in existence today.

How do I become a QP?

In many sections of the proposed rule, reference is made to CMS’s interest in moving as many eligible clinicians as possible into an APM. The carrot is what’s referred to as the “APM Incentive” which consists of three things:

  • Exclusion from MIPS
  • A 5% Part B bonus in years 2019-2024
  • A higher fee schedule update for participants in Advanced APMs vs non-participants (0.75% vs. 0.25%), beginning in 2026

This is the essence of what defines the two tracks of MACRA! Providers will either face a fee schedule that is subject to the MIPS payment adjustment, or they will qualify for the APM track and receive the incentives in the 3 bullet points above. The cynic might point out that it takes 962 pages to make this case, but I digress.

So who gets the incentive? The answer is the Qualifying APM Participant, conveniently shortened to QP. For payment years 2019 and 2020, participation will focus on the Medicare Option. In later years participation will be measured via the Medicare Option and via the All-Payer Combination Option. The latter is reference to the fact that CMS will expand the determination of your eligibility for the APM track by examining how you perform in APMs funded by sources other than Medicare Part B.

Becoming a QP in 2019 or 2020 requires that during 2017 and 2018 respectively at least 25% of the Part B revenue you collect comes to you through the care you provide to Medicare beneficiaries attributed to the Advanced APM. At a very high level this means if during CY 2017 you collect $100,000 through Medicare Part B, you would qualify for the APM track if at least $25,000 of those dollars were paid to you for services rendered to a beneficiary attributed to an Advanced APM. Of course it doesn’t really work this way (that’s too easy to understand). What they will actually measure is the APM entity’s performance against that 25% threshold.

For example, suppose I am in an ESCO with 9 other docs. And suppose that in aggregate the 10 of us collected $1,000,000 from Medicare Part B in 2017. If at least $250,000 of that Part B revenue came from care we provided to beneficiaries attributed to the ESCO, we pass go and all 10 of us are now QPs. Clear as mud, right? Remember my earlier reference to choosing your APM partners carefully?

The devil is in the detail

Regular readers of this blog know by now this is one of my favorite phrases. There are dozens, if not hundreds of details buried in this tome, many of which will surface in the weeks ahead. One of those details is that QPs are determined retrospectively and the determination is made at the APM Entity level, which means you may need to play the “MIPS game” as an insurance policy before CMS anoints you as a qualifying APM participant.

Beyond its complexity, perhaps the most troubling piece of this puzzle is that CMS very clearly wants us to move into APMs, but their preliminary estimates reveal a glass that is half empty. By their count, somewhere between 687,000 and 746,000 eligible clinicians will be impacted by the MIPS adjustment in 2019. In contrast, they only estimate between 30,658 and 90,000 eligible clinicians will become QPs and receive the APM Incentive I highlighted above.

Fortunately, the ESCOs ensure nephrologists will be over represented in those numbers, but the hurdles suggested in this proposed rule will make it increasingly difficult to qualify in the years ahead. Over the next several weeks I anticipate a substantial outcry against this rule as organized medicine begins to weigh in. The final rule will likely surface in September or October. Difficult for me to believe the country will be ready to start the madness just a few months later. Some leaders within the HIT community have already weighed in. Others will follow. The comment period closes in late June. Do you have a comment? Drop us a note and let us know what’s on your mind.

Dr. Terry KetchersidTerry Ketchersid, MD, MBA, practiced nephrology for 15 years before spending the past seven years at Acumen focused on the Health IT needs of nephrologists. He currently holds the position of Chief Medical Officer for the Integrated Care Group at Fresenius Medical Care North America where he leverages his passion for Health IT to problem solve the coordination of care for the complex patient population served by the enterprise.

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