MACRA Delay? Don’t Count On It

magic-eight-ball-dont-count-on-it-photo-researchers-incYou may have seen a headline or two last week stating that the Centers for Medicare & Medicaid Services (CMS) may delay MACRA’s effective date.  However, the agency has not announced any such delay.  Instead, CMS’ top official indicated the agency is considering some adjustments to the initial performance period.

The U.S. Senate Finance Committee held a hearing on MACRA last week, and CMS Acting Administrator Andy Slavitt was called upon to testify.  In his prepared remarks, Slavitt highlighted CMS’ outreach activities, beginning last year, intended to inform the rulemaking process, but never used the word “delay.”   Instead, during questioning, Senator Orrin Hatch (R-Utah), the committee chair, noted that many physician groups have been calling for a six-month delay, and stated that the statute gives CMS the flexibility to move the start date for the reporting period back.  In response, Slavitt acknowledged that CMS had received significant feedback on this point, and that the agency remained open to the option of an alternative start date and shorter performance period.

In the proposed rule, CMS has stated the initial performance period will be January 1, 2017, to December 31, 2017.  Physicians then will report on their 2017 performance on the MACRA measures during the first part of 2018.  CMS will announce individual physician composite performance scores in late 2018.  Then, starting January 1, 2019, physicians’ Medicare payments will be adjusted based on those composite performance scores.

The potential delay discussed during the committee hearing last week would mean a shortening of the initial performance period.  Instead of measuring performance for the entirety of 2017, CMS may elect to measure only the last six months, for example.  That would afford physicians extra time to identify relevant measures, focus on performance improvement, and figure out reporting mechanisms.  But it would not delay the release of the first round of composite performance scores or the start of payment adjustments January 1, 2019.

In light of this, providers should continue preparing for MACRA, rather than merely hoping it will go away.  Right now, the focus should be on education—helping physicians understand how MACRA works and the impact on their practices—and strategies for maximizing their composite performance scores.

2017 OPPS Proposed Rule: 4 Things to Know and 4 Things to Think About Regarding Site-Neutral Payments


The recently published 2017 Outpatient Prospective Payment System (OPPS) Proposed Rule provides additional information regarding the site-neutral payment provisions included in Section 603 of the Bipartisan Budget Act of 2015. The Proposed Rule explains certain aspects of the provisions that will prohibit newly established off-campus hospital outpatient departments (HOPDs) from billing services and receiving payments under OPPS. Listed below is a summary of items “to know” regarding the Proposed Rule, along with items “to think about” when considering the impact on your organization.

To Know…

  • Provider-based outpatient departments (excluding ERs) that are located off-campus and have not billed as such prior to November 2, 2015, will be precluded from billing under the OPPS payment system effective January 1, 2017.
  • On-campus facilities, as currently defined under 42 CFR §413.65, are excluded from the site-neutral payment provisions. These include facilities located in physical areas immediately adjacent to the hospital’s main buildings or other areas that are not strictly contiguous but within 250 yards of the main buildings.
  • Considerations for established off-campus HOPDs that began billing prior to November 2, 2015, include:
    • Established off-campus HOPDs should be reported on the hospital’s CMS 855A Medicare Enrollment Form. This form may be used in the future to confirm HOPD billing status.
    • Claims for services provided by established off-campus HOPDs require a modifier during calendar year 2016. The billed modifier also may be used by CMS to confirm HOPD status.
    • Established off-campus HOPDs will lose the potential payment benefit under OPPS if relocated to another physical address. Exceptions to this provision are being considered and will be addressed in the Final Rule.
    • Established HOPDs that provide new services after November 2, 2015, outside the current clinical service family, will be precluded from billing the new services under the OPPS payment system.
    • Should ownership of established off-campus HOPDs change, the payment benefit under OPPS will not be extended to new owners unless the main hospital is also acquired and the Medicare provider agreement is accepted.
  • For CY2017 only, off-campus HOPD services not meeting the exception criteria will be paid under the physician fee schedule with the physicians billing the claims, unless reassigned.

To Think About…

  • Hospitals with existing HOPDs should take stock of the services currently being billed under the OPPS payment system and ensure off-campus facilities are included on their CMS 855A Medicare Enrollment Form. Although an established off-campus provider-based facility may be excluded from the proposed payment provisions, future changes to a facility’s location or services will impact the facility’s billings and payments under OPPS.
  • Hospitals should review facilities currently billed as provider-based that are close in proximity to the hospital’s main campus, and also review any previously filed provider-based attestations regarding such sites. Facilities located on-campus are excluded from the site-neutral payment provisions, regardless of operational or physical changes.
  • No changes have been proposed to date regarding the Medicare cost report form, but may be forthcoming in the Final Rule. Future cost report revisions should be monitored closely for implications to other programs and services, such as Medicaid, 340B, Medicare bad debt, etc.
  • The Proposed Rule states specific challenges regarding implementation of the OPPS payment provisions. Services provided by off-campus HOPDs during CY2017 that do not meet the exception criteria will be billed and paid along with the practitioner’s services under the Medicare physician fee schedule non-facility rates.  This payment methodology may prove problematic for HOPDs serviced by independent healthcare professionals.  Public comments have been requested for consideration in developing a new billing and payment policy for periods after CY2017.  Given these stated concerns regarding implementation, modifications to the proposed provisions are expected in the Final Rule.

Comments regarding the 2017 OPPS Proposed Rule are due to CMS on or before September 6, 2016.

May 31 Deadline for 2017 Medicare Shared Savings Program

An organization interested in participating in the Medicare Shared Savings Program (MSSP) as an accountable care organization (ACO) must file a non-binding notice of intent (NOI) by 5:00 pm EDT Tuesday, May 31.  Only those organizations that file an NOI will be permitted to file an MSSP application, which will be due by 5:00 pm EDT Friday, July 29.

The NOI must be submitted electronically.  Detailed instructions are available on the MSSP website.  Keep in mind the NOI is non-binding; there is no prejudice to an organization that submits an NOI, but later elects not to file an MSSP application.  Nor is there any prejudice to an organization that files an MSSP application, but later elects not to sign a Participation Agreement.

Since the program’s inception in 2012, the number of MSSP ACOs has grown by approximately 100 each year.  We anticipate another bumper crop of MSSP ACOs this year, as physicians see the advantage of MSSP participation vis-à-vis the soon-to-be-launched Merit-Based Incentive Payment System, or MIPS.  A physician participating in an MSSP ACO will not be required to report separately on MIPS performance measures.  Instead, CMS will convert the ACO’s performance on the required MSSP quality measures into a MIPS composite score for participating physicians.  For a much more detailed explanation of how MIPS composite scores are calculated and how they impact physician payments, please see our earlier blog post on the MIPS proposed rule.

PYA has assisted numerous now-successful MSSP ACOs in evaluating the opportunity, filing the NOI, preparing and submitting an MSSP application, and establishing ongoing operations.  For more information, contact Martie Ross or David McMillan, (800) 270-9629.

MIPS Proposed Rule: Big Changes to Medicare Physician Payments Starting in 2017


Good news:  2016 is the last year physicians have to report performance measure scores to the Centers for Medicare & Medicaid Services (CMS) to avoid up to a 9% reduction in Medicare Physician Fee Schedule (MPFS) payments under the Physician Quality Reporting System (PQRS), the Value-Based Modifier Program, and the Meaningful Use Program.

Not-so-good-news:  A physician’s 2017 scores on measures in four weighted performance categories – quality, resource use, advancing care information, and clinical practice improvement activities – will dictate that physician’s 2019 composite performance score (CPS) under the new Medicare Incentive Payment System, or MIPS.  The CPS, expressed as a number from 1 to 100, will be used by CMS to determine the physician’s 2019 MPFS payment rate.  CMS also will report the physician’s score publicly on Physician Compare.

So what just happened?   Back on April 16, 2015, the President signed into law the Medicare Access and CHIP Reauthorization Act.  MACRA repealed the much-despised sustainable growth rate (SGR) formula for determining MPFS payments.  In its place, Congress directed CMS to implement MIPS as a new physician payment system that incentivizes quality and efficiency rather than merely rewarding volume.

A year later, on April 26, 2016, CMS published its much-anticipated 962-page MIPS proposed rule.  According to the agency, it has striven to “propose a program that is meaningful, understandable and flexible with a critical focus on transparency, effective communication with stakeholders and operational feasibility.”

The underlying MIPS concept is relatively straightforward:  a physician whose CPS is above the national performance threshold will receive an upward adjustment to his or her MPFS payments (up to 4% in 2019, increasing to 9% by 2023), while a physician whose CPS is below that threshold will be subject to a corresponding downward adjustment.  CMS’ proposed processes for identifying specific performance measures, compiling data and calculating each physician’s CPS, establishing performance thresholds, and making payment adjustments, however, are anything but straightforward. Continue Reading

Addressing Confusion Around Comprehensive Primary Care Plus


In the immediate aftermath of the Center for Medicare and Medicaid Innovation’s (CMMI) announcement of Comprehensive Primary Care Plus (CPC+), we have fielded numerous questions regarding the interplay of this new program with other Medicare initiatives.  Specifically, we have been asked how a provider should decide between participating in CPC+ and joining or continuing to participate in a Medicare Shared Savings Program (MSSP) accountable care organization.

The 2,188 providers in the 445 practices now participating in the predecessor to CPC+, the Comprehensive Primary Care Initiative (CPCI), applied for that program in 2011, prior to the launch of the MSSP.  Because CPCI providers are eligible to receive shared savings payments, they have not been eligible to participate in the MSSP.

Unlike CPCI, CPC+ does not have a shared savings component.  Instead, CPC+ providers will receive a prepaid incentive payment of $2.50 (Track 1) or $4.00 (Track 2) per beneficiary per month.  The provider will be required to repay some, or all, of this amount based on specified quality and efficiency measures scores.  Despite the lack of any shared savings payment, CPC+ providers will be prohibited from participating in the MSSP.

CMMI’s decision to prohibit dual participation in CPC+ and MSSP threatens to undo the significant gains many MSSP ACOs have made in care coordination and collaboration among primary care providers, specialist physicians, and other providers.  ACOs will now face the difficult challenge of proving to primary care providers – on which ACOs rely for beneficiary attribution – that waiting several months for any payout is a better deal than the immediate payment received under CPC+.  If unable to meet this challenge, these ACOs may be forced out of the MSSP, as they lose current primary care participants and are unable to recruit new primary care participants.

As we noted in our prior blog entry, this problem is compounded by the fact primary care providers will not know until late June or early July whether their region has been identified for CPC+ participation.  Thus, it is likely these providers will agree to participate (or continue to participate) in an MSSP ACO conditioned upon their selection for CPC+.  Such uncertainty makes it difficult for all parties to make the investments necessary for MSSP success.  Certainly this is not what CMMI intended with CPC+, but now it needs to deal with this unintended consequence head-on.

CMS Announces New Alternative Payment Model for Primary Care Providers

bird in the handBack in 2012, the Center for Medicare and Medicaid Innovation (CMMI) launched the Comprehensive Primary Care Initiative (CPCI), joining with 38 payers to support 500 practices across 7 regions in transforming primary care.  With CPCI scheduled to end later this year,  CMMI announced (April 11) the launch of its largest investment in advanced primary care to date: the Comprehensive Primary Care Plus (CPC+) model.

Application Process.  CPC+ is set to commence on January 1, 2017, and continue for five years.  To implement the program, CMMI is seeking commercial health plans and State Medicaid programs to participate.  Eligible payers must be willing to utilize a similar payment model (discussed below), align quality measures, and provide claims data to participating practices.  Interested payers must submit a proposal to CMMI by June 1, 2016.

CMMI then will select up to 20 regions to participate in CPC+ based on levels of payer participation.  Practices in these regions will have until September 15 to submit an application.  CMMI intends to have up to 5,000 CPC+ practices, 10 times the number of participants in CPCI.

Selected practices will use defined, stepwise requirements to develop the capacity to provide five comprehensive primary care functions: (1) access and continuity, (2) risk-stratified care management, (3) planned care for chronic conditions and preventive care, (4) patient and caregiver engagement, and (5) comprehensiveness and coordination of care. Continue Reading

2016 Medicare Physician Value Modifier Results – More of the Same

more-of-the-same-aheadWhat Happened in 2016?

The Centers for Medicare & Medicaid Services (CMS) has now released the official results for the second year of the Medicare Physician Value Modifier Program (VM Program).  Groups of 10 or more eligible professionals (EPs) are subject to adjustments in their 2016 Medicare Physician Fee Schedule payments based on their 2014 performance.

Last year, the VM Program impacted only those physician groups with 100 or more EPs. The 2015 VM Program impacted payments for a few hundred groups, many of which did not even qualify for tiering under the VM Program because they failed to successfully participate in the Physician Quality Reporting System (PQRS). The total dollar amount for funds that were shifted from poor to high performers was just over $11 million.

The 2016 results are consistent with the 2015 results, with one major exception: the program has impacted many more groups. Compared to 2015, there are significantly more groups that will experience a payment reduction in 2016. This year, it is projected that nearly $80 million will be redistributed from poor to high performers. Continue Reading

CMS Proposes Changes to Part B Drug Payments

19941On March 8, 2016, the Centers for Medicare & Medicaid Services (CMS) released its proposal to test new ways to pay for Part B drugs.  Presently, Medicare pays the average wholesale price (AWP) plus 6% for a Part B drug administered by a physician, durable medical equipment (DME) supplier, or hospital outpatient department.  For example, if a physician administered a drug with an AWP of $100, Medicare would pay the physician $106 plus a separate administration fee.

Concerned that the AWP+6% payment rate may lead providers to favor higher-priced drugs over their equally effective lower-priced counterparts,  CMS proposes to test whether changing the payment rate to AWP+2.5% plus a flat fee of $16.80 per drug per day would change prescribing habits.  CMS also wants to study whether the use of certain value-based purchasing tools now used successfully by commercial payers would have a similar effect. Continue Reading

Transition to Alternative Payment Models Ahead of Schedule

smart-goals1In January 2015, the Department of Health and Human Services (HHS) set an ambitious goal of having 30% of Medicare fee-for-service payments tied to alternative payment models (APMs) by the end of 2016.  On March 3, 2016, HHS announced this goal had been achieved nearly a year early, with roughly $117 billion of a projected $380 billion in payments going to APM participants.  According to HHS, these “estimates were evaluated by the independent Centers for Medicare & Medicaid Services (CMS) Office of the Actuary and found to be sound and reasonable.”

HHS also marked the one-year anniversary of the launch of the Health Care Payment Learning and Action Network (LAN).  Now numbering more than 5,000 participants, the LAN helps align initiatives across the private, public, and non-profit sectors. The LAN is accelerating the transition to APMs by supporting collaboration between HHS, private payers, large employers, providers, consumers, and state and federal partners.

According to HHS, the LAN’s first-year accomplishments include:

  • Serving as a convener to facilitate joint implementation and expansion of new payment and delivery models.
  • Building consensus around methods to facilitate the transition to alternative payment models.
  • Collaborating to generate evidence, share approaches, and remove barriers.
  • Developing common approaches to beneficiary attribution, financial models, benchmarking, and risk adjustment.
  • Creating implementation guides for payers and purchasers.

Importantly, the LAN has developed an APM Framework, categorizing the different types of APMs to facilitate a common understanding of payment reform initiatives.

HHS now faces its more ambitious goal of having 60% of Medicare fee-for-service payments tied to APMs by the end of 2018, with commercial payers pursuing similar targets.  Providers should expect to see all payers pushing these models, using both carrots and sticks to increase participation.

In the face of these dramatic changes, providers should remain focused on the basic core competencies necessary to succeed in an APM:  understanding the risk in the population served, learning to manage total cost of care, and enhancing operational efficiency.  Regardless of the specific APM in which a provider may participate, these core competencies are the keys to success.