You’re right, it is alphabet soup – government style. MACRA is the Medicare Access and CHIP Reauthorization Act of 2015 – legislation that replaced the Sustainable Growth Rate (SGR) as Medicare’s basis for determining physician reimbursement and is often referred to as the “SGR Fix.”

MIPS and APMs are the two reimbursement pathways created by MACRA.  APMs are Alternative Payment Models, one type of which is the ACO (Value-Based Care Organizations). APMs are emphasized in the second MACRA pathway, which will be the focus of this article.

MIPS is short for the Merit-based Incentive Payment System. Most physicians will be reimbursed through this pathway. Our article on that topic appeared in the August edition of Physician Strategy News, and was entitled “What Your Doctors Need to Know to Prepare for MACRA and MIPS

The APM Path

When creating the APM path, MACRA stipulated three criteria for including an APM in the pathway. First, the APM must base incentive payments on measures comparable to those included in MIPS. Second, APM members must use certified EHR technology. Third, the APM must bear more than “nominal” financial risk “if actual aggregate expenditures exceed expected aggregate expenditures” – i.e., must be at risk for a share of any losses. The path also permitted inclusion of expanded medical home models.

Eligible clinicians who participate in qualifying APMs would receive a guaranteed 5% incentive bonus each year starting in 2019 – and they would not be at risk for any penalties. The legislative reasoning behind the bonus guarantee is to aid the transition to and the maintenance of the new payment models. Creating a separate path also allows the APMs to concentrate on their business models and avoids duplicative MIPS reporting.

CMS (the Centers for Medicare and Medicaid Services) is tasked with creating the regulations to actually implement the MACRA legislation. In the proposed Final Rule that was released on April 27, 2016, CMS modified the APM path name to the Advanced APM path and more specifically defined the inclusion criteria. Regarding the use of certified EMR technology, CMS defined the criterion as requiring 50% APM member usage in Year 1 and 75% in Year 2.

More notably, CMS defined the “nominal” financial risk criteria as participating in a CMS agreement in which the APM has an actual risk of sharing losses – not just sharing savings. According to that definition, only APMs participating in the programs below would qualify:

  • MSSP Tracks 2 and 3
  • Next Generation Medicare ACOs
  • Comprehensive End Stage Renal Disease Care Model
  • Comprehensive Primary Care Plus (CPC+) (starting January 2017)
  • Oncology Care Model Two-Sided Risk Arrangement (anticipated to start in 2018)

A number of organizations objected to the CMS APM path inclusion criteria – specifically indicating that the expense of initiating and maintaining an MSSP Track 1 ACO (or a standard medical home) is considerable and does not guarantee any shared savings bonuses. As such, they argue that MSSP Track 1 ACOs do undertake more than a nominal financial risk just to function. They further argue that CMS achieves savings benefit even when an individual MSSP ACO does not achieve the shared savings threshold. They therefore conclude that these ACOs should be included in the MACRA APM path as they meet the intent of the legislation and their exclusion deters further APM development.

CMS feels that it interpreted the legislation correctly – that Congress intended the requirement of shared losses based on the legislation’s phrase “bear more than nominal financial risk if actual aggregate expenditures exceed expected aggregate expenditures.” CMS indicates that operating expenses alone do not meet the legislated definition. CMS’ impression maybe fueled by Congressional concern that relatively few ACOs are enrolled in Medicare APM models that requires a risk for losses and has been asking CMS about specific plans to transition ACOs to full risk sharing. It will be interesting to see how these differences of opinion are reconciled in the actual Final Rule, which is expected to be published in November.

The Advanced APM Path “double-whammy”

A less publicized APM path requirement is that participating in a qualifying APM is not enough. Each individual eligible clinician in a qualifying APM must also meet the criteria as a Qualifying APM Participant (QP). A QP must receive a substantial portion of revenue or patients through the qualifying Advanced APM – defined by CMS as receiving at least 25% of Medicare revenue through the qualifying APM or having at least 20% of Medicare patients attributed through the qualifying APM. For now, revenue and patients attributed through commercial plans do not count. Commercial attribution will enter the equation for 2021, when the percentages also increase to 50% and 35% respectively.

In a twist, CMS is proposing that the Advanced APM entity (e.g., ACO) could qualify as a QP if the aggregate performance of its eligible clinicians meet the performance thresholds. This option is designed to

  • Promote APM cohesion and collaboration
    • Faces risks and rewards as single unit
    • Reports aggregate performance data as a single unit
    • Affords greatest opportunity to effect positive change when it acts as a single unit
  • Recognize that multiple providers might contribute to attributed patient’s care/outcomes
  • Overcome attribution process shortcomings
  • Prevent multiple provider designations within APM or group
  • Simplify administrative burden for both CMS and APM

In this instance, every eligible clinician on the APM’s Participation List as of December 31st of the performance year would be designated as a QP for that performance year.

Even with the APM designation twist, the dual APM and QP requirement is anticipated make the number of providers who will ultimately be able to participate through the Advanced APM path and receive the guaranteed 5% incentive bonuses each year rather small – perhaps 30,000 nationwide (or less than 10% of all eligible clinicians).

What if I participate in an APM but do not qualify for the Advanced APM Path?

Providers who do not qualify for the Advanced APM path can participate in the MIPS path under the “MIPS APMs” umbrella. CMS is creating specific rules of engagement for MIPS APMs to recognize the value of APMs, to promote the APMs’ functional goals and objectives, and to avoid duplicative reporting for APM participants.

Reporting Quality Data: To avoid duplicative effort, APMs will continue to report quality measures via the CMS Web Interface as is currently accomplished. The single submission will meet both MSSP/Next Generation ACO reporting requirements and MIPS reporting requirements.

Reporting Other Performance Data: Clinical Practice Improvement Activities and Advancing Care Information data will be reported at the Tax Identification Number (TIN) level for MSSP ACOs and at the individual eligible clinician level for Next Generation ACOs as these categories are not currently included in CMS ACO Agreements.

Composite Performance Score (CPS) Determination: The Composite Performance Score for MIPS APMs will be created by aggregating the scores for all Eligible Clinicians listed under the APM to the MIPS APM level. This methodology is intended to accentuate an APM-centric focus for performance and drive APM initiatives to globally improve member performance. This approach creates risks for highly successful members with high individual CPS scores. A poorly performing APM may drag them down. To address this new concern, the ACO governance infrastructure will need to morph slightly to address performance issues in areas other than the traditional quality metrics, such as clinical practice transformation and information technology utilization and optimization.

Another issue to be aware of related to the APM CPS determination process is that performance category weighting will vary from the standard MIPS Eligible Clinician scoring. Since the Resource Use category does not apply to APMs, Quality will remain weighted at 50% while Clinical Practice Improvement Activities will be weighted at 20% (instead of 15%) and Advancing Care Information at 30% (instead of 25%) in Year 1. This forms another reason for heightened APM infrastructure focus on these areas.

MIPS APM Inclusion: Note that the MIPS APMs category applies to APMs with a CMS agreement who have individual clinicians listed on their participation lists. This means that facility-based APMS, like those in the Comprehensive Joint Replacement program, do not qualify for inclusion.

What should we do next?

The next steps for APMs are very similar to those for individual eligible clinicians and associated practices.

Become familiar with the Quality Improvement Program regulations.

Educate all involved – especially the Board and the member physicians – about MACRA and its potential impact on the APM.

Conduct a participation readiness assessment to cross walk current reporting processes and measures with those included in MIPS. This process will determine strengths and weaknesses and what needs to change – including infrastructure support.

Explore opportunities to score better through enhanced performance improvement efforts, preferred reporting mechanisms, alternate care delivery model exploration, and clinical practice transformation.

Consider which MSO capabilities may need to be augmented to allow the APM membership, and consequently the APM, to perform better.

Where can we get help?

NAACOS, AMA, AAFP, CMS, and other organizations offer suggestions and checklists. We can offer direct assistance with individual or group education, practice readiness assessments, performance improvement program development, and clinical practice transformation including PCMH and PCSP pursuit.

Call Dr. Terry McWilliams at (502) 614-4292. We’ll partner with you as you strive to be the best you can be in this increasingly complex healthcare environment.

Terrence R. McWilliams, MD, FAAFP

Chief Clinical Officer and Managing Director, Employed Provider Networks