The Medicare incentive programs with which you and your medical practice are familiar will soon be no more.  As of January 1, 2017, these programs (including the Electronic Health Records (EHR) Meaningful Use Incentive Program, the Physician Quality Reporting System (PQRS), and the Physician Value-Based Modifier Program) will morph into the new Medicare Quality Payment Program (QPP).   The QPP will also include a fourth category of incentives entitled “Clinical Practice Improvement Activities”, which we discuss in more detail below.

The purpose of the QPP is to create one central program that will govern Medicare Part B payments to physicians, while incentivizing physicians to increase quality of care and decrease inefficiencies in the cost of care for Medicare patients.  Participation in the QPP will be mandatory beginning January 1, 2017.  The QPP will either reward or penalize physicians and their practices by adjusting their reimbursement rates under the Medicare Physician Fee Schedule two (2) years after the reporting year.  Therefore, physicians/practices will have their reimbursement rates adjusted in 2019 based on their reporting data for the year 2017.

As we noted in our first blog post in the Series, accessible here, physicians will have the option to choose between two payment tracks under the QPP:  (1) the Merit-Based Incentive Payment System (MIPS); and (2) an Advanced Alternative Payment Model (Advanced APM).  This blog post will discuss the basics of the MIPS and how to qualify for the MIPS in 2017, while our next post will touch on the basics of participation in Advanced APMs.

Basics of the MIPS

Each physician or group practice (you may report individually or as a group) participating in the MIPS in 2017 will earn a “composite performance score” based on the physician/group’s scores within the following four (4) categories:

  1. Quality of Care – 60%
    • Explanation: Scored based on the reporting of “quality measures”, which will be published annually by CMS.  Physicians will be able to choose which quality measures they will report each year.
    • Replaces: PQRS and quality component of the Value-Based Modifier.
  2. Advancing Care Information – 25%
    • Explanation: Scored based on the reporting of EHR use-related measures with which you are familiar from the current EHR Meaningful Use Incentive Program.  However, unlike the existing program, the QPP measures will not have “all-or-nothing” targets.
    • Replaces: EHR Meaningful Use Program.
  3. Clinical Practice Improvement Activities – 15%
    • Explanation: Scored based on attestation by the physician/group that the physician/group has performed certain care coordination, beneficiary engagement, population management and patient safety activities.
    • Replaces:   New Program.
  4. Resource Use – 0%
    • Explanation: Scored based on per capita patient costs and episode-based measures.  CMS collects and analyzes the data from your claims submissions.  No additional reporting will be required.
    • Replaces: Cost component of the Value-Based Modifier.

How to Qualify for 2017

CMS has eased the reporting requirements for the first year of the QPP.  No physician/group will be required to begin collecting data in accordance with the QPP’s requirements on January 1, 2017 (but may elect to do so).  To receive a neutral or positive payment adjustment, physicians/groups will need to report data for only a 90-day performance period during the year.  There are also minimum threshold reporting requirements to avoid a negative payment adjustment and full participation requirements which are more likely to result in a guaranteed positive adjustment.  The table below organizes the requirements in an easy-to-read format:

MIPS Measures Chart

Final Thoughts on Qualifying for the MIPS in 2017

  • Get involved sooner rather than later. CMS has kept reporting requirements minimal in 2017 in order to encourage clinicians to participate in the QPP.  Take advantage of that opportunity to ensure your practice has the right software to report the quality and EHR use-related measures.  Since adjustments will be made based on threshold scores, it may be easier in 2017 to earn a positive adjustment, and even an exceptional bonus, than in later years.
  • Ensure that your current EHR technology meets the requirements for the QPP in 2017, including reporting capabilities for quality measures and EHR use-related measures. The easiest way to do this is to contact your EHR vendor.
  • CMS has given providers plenty of time to report 2017 data. The deadline for reporting 2017 data is March 31, 2018.

As always, if you have questions specific to your practice, please contact a knowledgeable and experienced attorney.

There are big changes coming to the Medicare incentive programs as we know them.  Beginning on January 1, 2017, the new Quality Payment Program (the “Program”) will replace all existing Medicare incentive programs with a comprehensive incentive model.  The Program will involve a modified set of EHR Meaningful Use requirements, new quality of care metrics, new cost efficiency goals and “clinical practice improvement activities” (for which physicians will be rewarded for care coordination, beneficiary engagement and patient safety).  The Program will also have a separate track for incentive payments associated with participation in Advanced Alternative Payment Models (such as Accountable Care Organizations) (“APMs“).

Congress provided for the development of the Program in the 2015 Medicare Access and CHIP Reauthorization Act (the “MACRA”).  Under the MACRA, the Program must be “budget-neutral” each year.  In other words, the rewards paid by Medicare to well-performing physicians and practices must be equally offset by the penalties levied against poor-performing providers.  The rewards will continue to take the form of payment adjustments to the Medicare Physician Fee Schedule.  The first year of payment adjustments will be 2019, based on data from the 2017 reporting year.  For 2019, the reward paid to (or penalty levied against) any provider may not exceed a 4% adjustment to the Medicare Physician Fee Schedule.  However, in subsequent years, the limits are set to increase, reaching a maximum of 9% in 2022.

The potential for substantial penalties under the Program has led to concerns that the Program will make it difficult for smaller practices with higher numbers of Medicare patients to be financially viable.  Foreseeing these economic issues, Congress earmarked $100 million over five years to help small practices successfully participate in the Program.

In June, the U.S. Department of Health and Human Services (“HHS”) announced that the first $20 million of these earmarked funds will be awarded by the end of 2016.  The recipients of the funding will be organizations that provide education, training and consultation on the Program to small practices.  In particular, these organizations will assist small practices in understanding what quality measures, EHR options and clinical practice improvement activities are most appropriate for their practices.  The organizations will also help small practices evaluate their options for joining an APM.  HHS has not announced when the organizations will begin training and educating small practices.

While the intention behind such training and education is laudable, it does not lay to rest the concern that small practices serving substantial Medicare populations will be under greater pressure and financial strain to continue to operate independently.  After all, the Program itself must remain budget-neutral.  If practices improve their compliance and quality of care metrics, payment adjustments will have to be reduced or compliance standards raised.  In the long-term, this may lead to small practices being forced to join an APM in order to continue to serve Medicare patients.

Stay tuned for updates on the Program from CMS, including details on the final regulations for the Program.  If you have specific questions about how the Program may affect your practice, be sure to contact a knowledgeable healthcare attorney.

The deadline for providers to file a hardship exception application to the electronic health record (EHR) meaningful use requirements for the 2015 reporting period is July 1, 2016.

If you have any concern that your practice or certain eligible professionals in your practice may have been unable to meet the meaningful use requirements for the 2015 reporting period, it may be appropriate for the applicable provider to file a hardship exception application with CMS to avoid future payment adjustments.  Note also that certain provider types may automatically qualify for a hardship exception for the 2015 reporting period without the need to file an application.

For more information, please see the Health Law Practice Alert recently published by Fox Rothschild LLP on this topic, accessible at this link:  Fox Rothschild LLP Health Law Practice Alert – Hardship Exception (June 17, 2016).

In July, the Centers for Medicare and Medicaid Services (CMS) released the much-anticipated final regulations that providers are required to meet in order to receive the Medicare incentives for adoption of a certified electronic health record system. In those regulations, In the final rule, CMS set forth 15 core elements which must be met in order to qualify for “meaningful use” of the EHR system.

Notwithstanding the regulations, the requirements are complex and many physicians and other providers have a host of questions regarding both the regulations and the incentive program. To address some of these questions, CMS has issued a number of Frequently Asked Questions (FAQs) on its website. To review the new EHR FAQs, physicians can click here and type the term “EHR” into the search window.