CMS charts the way to a new Medicare payment system

Medicare is transitioning to a new value-based payment system, and the agency has outlined specifics about how it intends to implement it.


One hopes that most physicians are aware by now that Medicare is transitioning to a new value-based payment system, established as a result of the Medicare Access and CHIP Reauthorization Act (MACRA). What they couldn't know, because it wasn't available, were the specifics of how the Centers for Medicare and Medicaid Services (CMS) planned to implement MACRA's value-based payment system.

Largely because the law's requirements are very complex, and physicians and their practices have highly variable needs, CMS has faced a challenging task in translating Congress' intent into practical implementation rules. The law requires that beginning in 2019, CMS must establish 2 pathways for physicians to be paid based on the quality and cost of care attributed to them.

One pathway is the Merit-Based Incentive Payment System (MIPS), which will adjust fee-for-service payments upwards or downwards based on measures of quality and cost. This MIPS quality reporting program replaces the 3 existing Medicare quality reporting programs—the Physician Quality Reporting System (PQRS), Meaningful Use (MU) of electronic health records (EHRs), and the Medicare Value-Based Payment Modifier program, and adds a fourth reporting category for clinical practice improvement activities.

The second pathway is for physicians to participate in advanced Alternative Payment Models (APMs), which are models of care that require clinicians to accept accountability (and in most cases, financial risk) for achieving better outcomes and lower costs. Physicians in CMS-approved APMs generally will receive higher upfront prospective payments and also be eligible for 5% annual bonuses on their fee-for-service payments. If they don't achieve the required savings, however, they have to pay the program back at least a portion of their prospective payments. The law gives CMS the authority to exempt advanced primary care medical homes from such financial risk requirements if they meet other requirements established by MACRA.

In the 14 months since MACRA was enacted into law, the College has provided extensive input to CMS to help the agency write the rules needed to implement MACRA as Congress intended. One constant refrain in all of ACP's communications is the need for the agency to simplify, reduce, harmonize, and ease the burden of quality reporting under the MIPS program. Another is for the agency to provide multiple opportunities for physicians and their practices to qualify as APMs. We received indications from CMS that it was listening and shared our hope for a simplified reporting system, yet we couldn't say for sure if the agency truly “got it” and would make our recommended changes.

That is, until now. With the agency's release in late April of a 900-plus-page proposed new rule to implement MACRA, we are beginning to get the answers we need from CMS. (Keep in mind because it's a proposed rule, things could still change between now and when physicians and their practices actually have to comply with the law's requirements and related regulations.) While we are still digesting the full implications of the proposed rule, our overall assessment is that CMS's proposed implementation plan is quite responsive to the College's recommendations, particularly as it relates to simplifying quality reporting and revamping the meaningful use program.

For the new quality reporting system (MIPS), CMS proposes the following improvements as recommended by ACP:

  • Reduce the number of clinical quality measures that need to be reported from 9 down to 6. These 6 measures must include 1 cross-cutting measure and 1 outcome measure. If an outcome measure is not available, then a clinician can select a “high-priority measure” (e.g., appropriate use, patient safety, efficiency, patient experience, and care coordination measures). ACP had specifically asked CMS to allow flexibility in the use of outcome measures initially, while expressing our support for their use.
  • Allow physicians to select measures individually or from a specialty-specific measure set. MIPS participants have flexibility to determine the most meaningful measures for their practice. ACP had asked CMS to allow clinicians to only use the measures most applicable to their patient population.
  • Provide opportunities for qualified clinical data registries to submit new and innovative measures for consideration.
  • Provide numerous options for reporting practice improvement efforts. The clinical practice improvement activities (CPIA) measure, which will represent 15% of a physician's total MIPS score, includes more than 90 options for clinicians to select from, including activities focused on care coordination, beneficiary engagement, and patient safety. A patient-centered medical home (PCMH) will receive full credit if it is a nationally recognized or accredited PCMH (by the National Committee for Quality Assurance, Accreditation Association for Ambulatory Health Care, The Joint Commission, or URAC), a Medicaid medical home, or another recognized medical home program as determined by CMS.
  • The renamed new Advancing Care Information program eliminates threshold measure requirements of meaningful use; instead, reporting requires only the numerator and denominator of each measure where appropriate. The all-or-nothing requirement has been eliminated. Measures have been simplified and made optional. Incentives for use of health information technology are also provided in other categories of MIPS, including a bonus point for reporting quality measures via certified EHR technology and some CPIA activities involving enhanced use of certified EHR technology.

For the APM pathway, the results are more mixed from the College's perspective. CMS will allow primary care practices that participate in the new Comprehensive Primary Care Plus (CPC+) program to qualify as advanced APMs, making them eligible for higher upfront prospective payments plus 5% fee-for-service annual bonus payments. CPC+ practices will receive prospective risk-adjusted per beneficiary per month (PBPM) payments, in addition to their fee-for-service payments.

CPC+ practices are required to accept some financial risk, however; a portion of their PBPM payment will have to be paid back to CMS if they don't demonstrate savings to the program. And because, at most, 5,000 practices in up to 20 regions will be invited to participate in CPC+, this leaves other primary care practices, even those organized as PCMHs, no way to be accepted as advanced APMs in 2019.

There also is no clear pathway for most internal medicine subspecialists to participate as advanced APMs. These limitations, plus the lack of a pathway for PCMHs to participate as advanced APMs without financial risk, are concerns that ACP will raise in its formal response to CMS on the proposed rule.

In sum, the proposed rule isn't perfect—no proposed rule is—but it begins to offer physicians the answers they need to chart their journey to Medicare value-based payments, while easing the trip with streamlined quality reporting and a revamped meaningful use program.