In the rule proposed by the Centers for Medicare and Medicaid Services to implement MACRA's Quality Payment Program (QPP), a number of insights and action items are becoming clearer for provider organizations.

Following are some of the important findings that I and other policy experts at Advisory Board have identified as top takeaways.

CMS pumped the brakes on its plan to require QPP participants to upgrade their Certified EHR Technology (CEHRT) in 2018.

The news isn't entirely surprising, since CMS this past April in its 2018 Inpatient Prospective Payment System (IPPS) proposal floated doing the same for hospitals that participate in the Inpatient Quality Reporting and Meaningful Use (MU)—although the agency did not go so far as to formally propose it.

Bloomberg/file photo

Should CMS choose not to align the CEHRT requirements between IPPS and QPP, health systems that manage both hospital and ambulatory quality programs would have to monitor very different sets of requirements. Additionally, health systems would have to choose between an accelerated CEHRT upgrade timeline for all providers or a competing timeline across programs.

This proposed rule provides even more evidence that payment reform remains one of CMS's primary goals and that new payment models are gaining traction with providers.

After factoring in the latest models and application periods—especially MSSP Track 1+, the Next Generation ACO Model, and the CPC+ program—CMS now expects that as many as 245,000 providers will qualify for the Advanced Alternative Payment Model (APM) Track based on their 2018 participation decisions. That's double CMS's projection for 2017 participation.

Perhaps even more important, MACRA is already encouraging providers to push beyond the upside-only risk models that initially dominated the Medicare ACO landscape. The number of Medicare ACOs participating in downside risk models has more than doubled from 2016 to 2017, reaching 87 this year. We expect this migration to downside risk will continue as more providers reach their MSSP renewal dates, especially because CMS is proposing to maintain the current standard for payment models to count toward the Advanced APM track through 2020. By law, payment models must impose more than a "nominal amount" of risk to qualify.

Overall, the proposed rule gives providers renewed clarity that they must develop an intentional Medicare risk strategy to successfully prepare for MACRA.

The proposed creation of a path for facility-based clinicians to participate in the Merit-based Incentive Payment System (MIPS) also is a significant development.

By enabling clinicians to use their facility's value-based purchasing (VBP) score, CMS would finally be making the connection between MACRA's QPP and inpatient VBP performance. This would accomplish two goals. First, it would expand the options these eligible clinicians have to successfully participate in the QPP. Second, and perhaps more importantly, it would create a direct connection between physician performance metrics and the hospital-based pay-for-performance (P4P) programs. The necessity of ensuring strong alignment with facility-based clinicians means hospital leaders would have an even stronger incentive to focus on improving P4P performance.

Separately, some providers in the MIPS track might see the proposed rule as an excuse to pull back from cost-control efforts—but that would be a mistake. While the proposed rule would zero out the cost category under MIPS for 2018, that wouldn't last long. Under the MACRA law, the cost category must account for 30 percent of the MIPS score by the 2019 performance year. That's a big jump, and providers should use the coming year to prepare.

In last year's QPP rulemaking cycle, it became abundantly clear that smaller groups were not likely to fair well under MIPS. Recall that CMS estimated that 42 percent of groups with one to nine eligible clinicians would receive a negative payment adjustment under the program.

This time around is a different story: The 2018 proposal shows CMS is dedicated to leveling the playing field for smaller groups. They propose doing so in two key ways:

  • By making it easier for smaller groups to meet the MIPS requirements by giving them preferential treatment in certain MIPS categories and adding virtual groups as a participation option.
  • By increasing the threshold of Part B patients or charges necessary for an eligible clinician or group to be subject to MIPS from less than or equal to $30,000 in Part B allowed charges or fewer than 100 Part B beneficiaries, to less than or equal to $90,000 in Part B allowed charges or fewer than 200 Part B beneficiaries.

But if providers believe they could avoid MIPS altogether because of these elevated thresholds, they should think again.

It is important to remember that these thresholds would apply to individual providers or groups of providers. That means that if a group is reporting as a group under MIPS and the entire group has more than $90,000 in Part B charges or more than 200 Part B beneficiaries, then the entire group would be subject to MIPS. Therefore, the only providers this new proposal actually helps would be those reporting individually. Many providers that are part of medium to large medical groups or systems have already migrated to group reporting so, these thresholds may have less of an impact on the number of providers subject to MIPS than you might expect.

It's also likely that these thresholds would cut the portion of MIPS eligible clinicians that would have otherwise been unable to meet the MIPS requirements, resulting in an even more competitive MIPS landscape. This could result in lower bonuses for the higher performers and a narrower spread between high and low performers.

This was one of the first opportunities for the new administration to put its mark on the future of payment reform, and they proposed leaving the structure of MACRA's QPP intact. In fact, the proposed rule would offer significant flexibility and give clinicians even more ways to succeed in the program.

The new administration—most notably, HHS Secretary Tom Price—had previously expressed conflicting views about MACRA. While Price voted in favor of the passage of MACRA in 2015, he was also somewhat critical of the law's implementation in its first year and expressed concerns about the rapid pace at which the Obama administration had pressured providers to take on risk.

However, the content of this rule, along with the fact that Price has maintained implementation of other payment reform initiatives, such as the Medicare Shared Savings Program and The Center for Medicare and Medicaid Innovation's (CMMI) programs, gives us even more confidence that payment reform will continue during his tenure.

Others from Advisory Board contributing to this article included Hamza Hasan, Practice Manager, Medical Group Strategy Council; Naomi Levinthal, Practice Manager, Health Care IT Advisor and Quality Reporting Roundtable; Krista Teske, Consultant, Physician Practice Roundtable; and Kathryn Martucci, Senior Analyst, Health Policy.

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Rob Lazerow

Rob Lazerow

Rob is a managing director with the Health Care Advisory Board research program.