Some provider advocates have raised concerns that the rules could push physicians in APMs back toward FFS payment.


April 28—Physicians participating in many existing alternative payment models (APMs)—including most Medicare accountable care organizations (ACOs)—will not qualify to receive future Medicare pay increases under proposed rules issued this week.

The highly anticipated rules implementing the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) detailed how physicians will be paid under Medicare starting in 2019. MACRA will split physicians into those paid under the Merit-based Incentive Payment System (MIPS) and those paid annual lump sums and excluded from MIPS quality-reporting requirements if they sufficiently participate in qualifying APMs.

The rules issued this week identified the APMs that will qualify participating physicians for bonus payments and exemption from MIPS reporting:

  • Comprehensive Primary Care Plus (CPC+)
  • Next Generation ACO
  • Medicare Shared Savings Program (MSSP) Tracks 2 and 3
  • Oncology Care Model with two-sided risk
  • Comprehensive ESRD Care (for large dialysis organizations)

Although the rule stated that the Centers for Medicare & Medicaid Services (CMS) will continue to add to the list of qualifying APMs, not included in the initial list were any bundled payment program and Track 1 MSSP ACOs. Ninety-five percent of the 434 MSSP ACOs are in Track 1, and participating physicians would not qualify under the MACRA proposed rules, according to a CMS official.

Additionally, physicians participating with about 800 hospitals in the newly launched Comprehensive Care for Joint Replacement (CJR) model also would not qualify for APM payments.

“Although this a large and complex rule, a leading concern for physician practices appears to be the relatively small number of APMs it designated as qualifying participating physicians for bonus payments under MACRA,” said Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA.

Many physicians who participate in existing APMs will not qualify for MACRA bonus payments, officials at the U.S. Department of Health and Human Services acknowledged in a release. Instead, the proposed rule aimed to offer them financial rewards within MIPS, “as well as to make it easy for clinicians to switch between the components of the Quality Payment Program based on what works best for them and their patients,” the release stated. HHS officials noted that they expected most Medicare clinicians to participate initially in MIPS instead of in qualifying APMs.

The appeal of the APM track for many physicians was chiefly due to the accompanying 5 percent annual bonus that provides a more generous inflation update through 2024 than is available through MIPS, Piper Su, a vice president for The Advisory Board Company, noted in an interview. MIPS pay increases depend on meeting quality-reporting requirements.

“So there is a real financial difference potentially in the APM and MIPS strategy,” Su said.

The MIPS rules were supposed to streamline some reporting requirements, “but it is unclear how much difference there is going to be” from current requirements.

“Every practice is going to have to do a close assessment of how these incentives align with their broader strategy and where they are in their care transformation process and building their capabilities for practice management, quality reporting, and all of the things that are implicated in the new payment system,” Su said about the choice between the payment tracks.

The proposed rule also established three criteria that APM participants will need to meet to satisfy MACRA’s nominal financial risk requirement:

  • Marginal risk of at least 30 percent
  • Minimal loss rate of no more than 4 percent
  • Total potential risk of at least 4 percent of expected expenditures

The limited number of existing models qualifying as APMs drew concerns from several provider organizations, including Premier.

“As we have learned through members in our Population Health Management Collaborative, these programs require providers to not only forgo revenue through a lower volume of services, but also invest millions of dollars in redesigning care through new technologies, data analytics, additional staff, etc.,” Blair Childs, a premier spokesman, said in a written statement. “We think most businessmen would call that more than nominal risk, yet CMS choses to define it as only cases where there is risk to the government.”

Not including Track 1 ACOs and bundled payment programs could lead physicians to leave APMs and return to fee-for-service payment, Childs warned.

Another possible consequence, according to Mulvany, was departures from the MSSP for other APMs.

“If an MSSP ACO is struggling under Track 1 and about to be compelled to take risk, CPC+ might be a more attractive alternative if it’s available in the ACO’s market,” Mulvany said.

Even experienced practices may face struggles under the proposed rule.

Donald Fisher, PhD, president and of AMGA, formerly the American Medical Group Association, said in a release that “we remain concerned that qualifying as an APM remains challenging at best, even for AMGA members, many of whom are very experienced with risk-based payment models.”

Su noted that CMS will reassess qualifying APMs annually and could add CJR as that model adds provider downside risk in future years.

Health IT Requirements

Among the range of payment specifics in the 962-page rule was that clinicians in APMs will have to meet new health IT requirements, including the share of physicians in a qualifying APM who use certified electronic health records (EHRs): at least 50 percent by 2017 and 75 percent by 2018.

The rule also spelled out the expected replacement of the meaningful use guidelines for the EHR incentive program with a new Advancing Care Information program. The replacement program aims to offer more flexibility, including by moving away from all-or-nothing EHR measurement requirements.

“These improvements should increase providers’ ability to use technology in ways that are more relevant to their needs and the needs of their patients,” Andy Slavitt, administrator for CMS, and Karen DeSalvo, national coordinator for health IT, wrote in a blog post.

The rule would affect only EHR-related criteria for Medicare payments to physician offices, not Medicare payments to hospitals or Medicaid payments. CMS is meeting with hospital advocates about ways to align the EHR programs, the CMS officials wrote.

The changes to EHR requirements drew support from the American Medical Association (AMA).

“The AMA has been vigorously pressing for needed changes to these programs,” Steven J. Stack, MD, president of the AMA, wrote in a statement. “While we have not yet digested the entire 962-page regulation, it appears on our initial review that CMS Acting Administrator Andy Slavitt and his senior management team have listened.”

MIPS Details

The proposed rule also delineated the share of components that will determine quality scores and, in turn, whether physicians receive bonus payments under MIPS, with quality measurement beginning in in 2017:

  • Quality (50 percent of total score in year 1): Clinicians select six measures to report from a range of options designed to accommodate differences among specialties and practices.
  • Advancing Care Information (25 percent): This component includes customizable measures clinicians from which clinicians can choose that reflect how they use technology and that particularly emphasize interoperability and information exchange. Unlike the replaced meaningful use reporting program, this component would not involve all-or-nothing EHR measurement or redundant quality reporting.
  • Clinical Practice Improvement Activities (15 percent): Clinicians report on clinical practice improvements from a list of more than 90 options.
  • Cost (10 percent): This component is scored based on Medicare claims, requiring no reporting by clinicians, and tracks 40 episode-specific measures to account for differences among specialties.

Asked whether the new requirements will further incentivize physicians to move to hospital employment, Su noted that the new rules add to the complexity of Medicare payment.

“There’s no doubt that the program is very complex and is going to require resources to report all of the elements—whether in the MIPS track or the APM track—and for providers that were contemplating whether they want to spend their time as practice managers versus time with patients or as practitioners, certainly this adds some complexity,” Su said.

HHS will accept comments on the proposed rule through June 26.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, April 28, 2016