New Federal healthcare industry payment models based on the April 27th, release of a proposed rule propose MIPS, MACRA, and APM methodologies for calculating healthcare reimbursement.  There are 962 pages in a document that proposes once in a generation changes in how healthcare providers are compensated.  The Meaningful Use program is eight years old and the Medicare payment system is 25 years old.  What follows is a summary of the proposed rule as of May 2016.

The Premise for these changes is a continuing effort to achieve efficiencies in healthcare.  CMS and other industry leaders generally believe that 30% of healthcare expenditures are still wasted.

CMS Proposed Rule-making on MIPS and MACRA

According to the Centers for Medicare and Medicaid (CMS), “Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repeals the Medicare sustainable growth rate (SGR) methodology for updates to the physician fee schedule (PFS) and replaces it with a new Merit-based Incentive Payment System (MIPS) for MIPS eligible clinicians or groups under the PFS. This proposed rule would establish the MIPS, a new program for certain Medicare-enrolled practitioners.

  • MIPS would consolidate components of three existing programs, the Physician Quality Reporting System (PQRS), the Physician Value- based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (EPs),
  • It would continue the focus on quality, resource use, and use of certified EHR technology (CEHRT) in a cohesive program that avoids redundancies.
  • This proposed rule also would establish incentives for participation in certain alternative payment models (APMs) and includes proposed criteria for use by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in making comments and recommendations on physician-focused payment models.”  (See

The Quality Payment Program and HHS Goals

The Secretary announced new goals including 30% of payments based on alternate payment models by end of 2016. By 2018 the goal is to have 50% of payment tied to value based models by 2018.

health care value based payments illustrated

U.S. Health and Human Services Goals for Value Based Care.
Source: GE Healthcare IT.

MIPS – Fresh Start for Value Based Care

The goal is to measure E.H.R. usage under care coordination.  The entry ticket to MIPS is that providers are a Meaningful User of Electronic Health Records.

  • Quality
  • Resource Usage
  • Clinical Practice Improvement
  • Advancing Care Information

Expanded Participation

In years one and two, Physicians (MD / DO and DMD / DDS, PAs, NPs, nurse specialists, certified registered nurse anesthetists. Program may be broader, including Physical or occupational therapists, speech language pathologists, audiologists, nurse midwives, clinical social workers, clinical psychologists, dietitians / nutritional professionals.

Who is Excluded from MIPS?

  • First year Medicare Part B providers
  • Below low patient volume threshold of less than $10,000 and provides care for 100 or fewer Medicare patients in one year

CMS Policy and Performance Category Weights – Determined by Statute

The prioritization of performance is illustrated in the graph below.  A MIPS Advancing Care Information Performance Category aggregate score would be composed of:

  • Base score of 50 points for advancing care information
  • 80 points for advancing care information performance
  • 1 point for total advancing care information performance – bonus
  • Which equates to a composite score of 100 points or more possible

There is a proposal to eliminate clinical decision support and clinical provider order entry (CPOE) objectives which are more rudimentary measures of the current Meaningful Use program.  The new measures are again focused more on more advanced usage of E.H.R. technology.

health care delivery performance category weights

Source: GE Healthcare IT

Risk Adjustment Mechanisms for Value Based Care – Stay Tuned

There are no firm commitments from CMS but we can expect revisions to Risk Adjustment methods in the future.

The Affordable Care Act (ACA) provides for a program of risk adjustment in the individual and small group markets in 2014 as Marketplaces are implemented and new market reforms take effect. The purpose of risk adjustment is to lessen or eliminate the influence of risk selection on the premiums that plans charge.

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