CMS finalizes rules on new Medicare payment methodologies for clinicians

On October 14, 2016, the Centers for Medicare and Medicaid Services (CMS) issued final rules to implement a new Quality Payment Program which includes the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs).  The new program is authorized under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).  That landmark bipartisan legislation: repealed Medicare’s flawed sustainable growth rate (SGR) formula, replaced three prior Medicare incentive programs, consolidated Medicare quality reporting requirements beginning in 2017, and authorized new pay-for-performance adjustments beginning in 2019 for eligible clinicians paid under the Medicare Part B physician fee schedule.

CMS now estimates that MIPS may distribute positive and negative Medicare payment adjustments in 2019 to 592,000 – 642,000 eligible clinicians, amounting to about $199 million in positive adjustments and $199 million in negative adjustments, plus $500 million in special bonuses for “exceptional performance” as defined in the new rules.  Another 70,000 – 120,000 eligible clinicians participating in Advanced APMs, such as certain types of risk-bearing Medicare accountable care organizations (ACOs), may receive $333 million – $571 million in performance-based supplemental incentive payments in 2019 under the rules.

Eligible clinicians not meeting reporting requirements in 2017 may face four percent negative adjustments in 2019, but the rules outline flexible reporting options for the 2017 transition year as well as certain “low volume” exceptions for small practices.  Eligible clinicians include physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and groups that include such clinicians.  Performance data may be submitted on behalf of eligible clinicians by third party intermediaries such as qualified clinical data registries and other authorized vendors that can extract data from electronic health records.

CMS will analyze clinicians’ reported 2017 performance data using widely accepted clinical metrics, by specialty, across four categories: quality of care, clinical practice improvement activities (e.g., care coordination, beneficiary engagement, and patient safety initiatives), advancing care information (e.g., data exchange through electronic health records), and cost/resource use.  For each clinician, initial performance scores will be calculated within each performance category and statistically weighted (e.g., a 50 percent weight for quality of care scores) to determine a composite performance score (CPS) for each clinician, statistical thresholds among comparable clinicians, and outliers that may be subject to positive or negative payment adjustments.

The new rules will be effective January 1, 2017, but CMS is offering a 60 day period for comments and questions.  Additional information is available here.

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