You’ve likely heard or are familiar with the acronyms related to CMS’s current quality incentive program: MACRA, QPP, APMs, and MIPS, among others. Although the program has been in place for over a year, CMS’s phased approach to participation allowed providers to do very little in 2017 to avoid a payment cut. As the participation thresholds increase in 2018 and beyond, it is important to understand the basics of this program and what, if anything, you need to do to avoid a Medicare payment cut.

MACRA

MACRA stands for the Medicare Access and CHIP Reauthorization Act of 2015. It is the law that repealed the Sustainable Growth Rate (SGR) formula and created the Quality Payment Program (QPP).

The SGR dated back to a deficit-reduction law passed in 1997, which enacted a formula known as the “sustainable growth rate” to determine future changes to Medicare payment rates. The SGR calculated adjustments to the Physician Fee Schedule (PFS) based on characteristics of the Medicare population and the economy. When Medicare spending remained below the target, healthcare providers saw small annual increases to their payments, but when heath care utilization by Medicare beneficiaries increased, the SGR required large payment cuts to keep costs in line with the spending targets. The result was threats of annual payment decreases ranging from 4.8% to as much as 21%. Congress repeatedly took temporary action to stop these cuts, but each time the temporary action expired, an even larger cut would be due to compensate for the increased spending.

MACRA finally ended the across-the-board cuts of the SGR and created the Quality Payment Program (QPP) in its place. The QPP allows CMS to adjust Medicare payments for individual clinicians and groups based on their performance on selected measures, resulting in upward payment adjustments for high performers and downward payment adjustments for those who do not participate or who perform poorly.

QPP

The Quality Payment Program (QPP) replaced the three legacy programs of the Physician Quality Reporting System (PQRS), Meaningful Use, and the Value-Based Payment Modifier, although many elements of these programs remain part of the QPP.

Under the QPP, there are two tracks: the Merit-based Incentive Payment System (MIPS), and Advanced Alternative Payment Models (Advanced APMs). Some clinicians are excluded from the QPP entirely based on their provider type or volume of Medicare patients and payments, but those who are not excluded fall under one of these two tracks.

CMS has provided an NPI lookup tool to help providers determine their participation status, and if they qualify for any special exemptions or scoring rules: https://qpp.cms.gov/participation-lookup

Advanced APMs

Under the Advanced APM track of the QPP, participation in certain quality-improvement and cost-containment programs is recognized with an automatic 5% increase in Medicare payments. While an APM can be any “payment approach that gives added incentive payments to provide high-quality and cost-efficient care” (https://qpp.cms.gov/apms/overview), only certain APMs affect QPP participation.

Some APMs are designated by CMS as “MIPS APMs,” meaning participants in these programs will still participate in the MIPS track of the QPP, but with different scoring rules than providers who are not APM-participants. Only certain participants in those APMs specifically designated by CMS as meeting the “Advanced APM” standards are completely excluded from MIPS and eligible for the automatic 5% payment adjustment.

For more details, visit https://qpp.cms.gov/apms/overview.

MIPS

Under the MIPS track of the QPP, providers or groups are scored across four categories. Each category is separately weighted, and there are bonus points available within categories and as part of the overall score. The specifics of the category weights, total points, and scoring can change from year to year, but the categories remain constant (so far): Quality, Cost, Improvement Activities, and Promoting Interoperability (formerly called Advancing Care Information).

The Quality category derives from PQRS, Cost retains concepts from the Value-Based Payment Modifier, and Promoting Interoperability is the successor program to Meaningful Use. Only the Improvement Activities category is new to CMS incentive programs. Details of how each category is reported and scored are available at https://qpp.cms.gov under the “MIPS” heading.

To calculate a final MIPS score for a provider or group, CMS will take the percentage score for each category, multiply it by the category weight, and add these points together along with any bonus points to generate a final score. This score will then be compared to pre-determined thresholds to decide if a provider or group earned a downward, neutral, or upward payment adjustment.

Once the direction of the adjustment is determined, the amount will vary based on the participation and performance of other clinicians in the program. The program is mostly budget-neutral, meaning the majority of the money available for upward adjustments for providers with high scores must come from other providers who receive downward adjustments for low scores or non-participation. Put another way, if few providers receive payment cuts, the upward adjustments will be much smaller than if many providers receive payment cuts.

What Do You Need to Do?

The Quality Payment Program can seem overwhelming, but there are a few simple things you can do to determine your next steps:

  1.  Check your participation status. You may be exempt from the QPP entirely or may benefit from preferential scoring rules.
  2.  If you are part of an APM, reach out to them for guidance and assistance. Many have resources to help you.
  3.  If you are subject to MIPS, determine your goal(s) as it relates to your payments and future programs:
    • Do you just want to avoid a payment cut, or do you want to maximize your chance at a possible upward payment adjustment?
    • What would a payment adjustment mean for you in real dollars?
    • What will you need to change in the organization to meet your goal(s), and what will that cost you in time, productivity, and vendor expenses?
    • Is it only about the payment adjustment, or is participating at a higher level important to you to prepare for future years or to drive change in your practice?
    • What are you already doing that you can use to meet MIPS categories and measures?

Knowing the answers to these questions will guide your decisions for which categories to report and how to report them.