What Is an “Advanced” APM?

For your convenience:

APMs = Alternative Payment Models

MIPS = Merit-based Incentive Payment System

QPs = Qualifying APM Participants

CEHRT = Certified Electronic Health Record Technology

 

The MACRA rule has introduced a load of new acronyms (see above), but here is another wrinkle. What exactly is an “Advanced” Alternative Payment Model? Luckily, several attorneys wrote an overview in a recent American Health Lawyers Association article, the bulk of which appears below.

 

An Advanced APM is an APM that: (1) bears financial risk that is more than “nominal” (or is a medical home); (2) requires practitioners to use certified electronic health record technology (CEHRT); and (3) pays for services based on quality measures comparable to MIPS.

 

Providers and Accountable Care Organization (ACOs) with a specified percentage of patients or payments directed through Advanced APMs can become Qualifying APM Participants (QPs). This means they will be exempt from MIPS and may qualify for a 5 percent APM incentive payment beginning in 2019.

 

To have a “more than nominal” risk, an Advanced APM must have provisions to owe CMS or forgo an amount equal to at least: (1) for performance periods 2017 and 2018, 8 percent of the average Medicare Parts A and B revenues of participating APM entities (the “revenue-based standard”); or (2) for all performance periods, 3 percent of the expected expenditures for which an APM Entity is responsible under the APM (the “benchmark-based standard”).

 

Unlike the proposed rule, the final rule does not require an Advanced APM to carry required marginal risk or minimum loss rate.

 

In 2019 and 2020, QP determinations will be made based only on Medicare Part B services. Accordingly, CMS expects Advanced APMs to include, primarily, MSSP Tracks 2 and 3, the Next Generation ACO Model, the Comprehensive Joint Replacement Model, the Comprehensive Primary Care Plus Model, and the Comprehensive End-Stage Renal Disease Care Model. A new MSSP Track 1+, carrying less risk than MSSP Track 2 or 3, will be available as an Advanced APM starting in Program Year (PY) 2018. CMS will provide more detail about Track 1+ in a forthcoming rule.

 

Risk-bearing Medicare Advantage (MA) plans will not qualify as Advanced APMs, but CMS notes they may qualify under the “All-Payor Combination Option.”

 

In addition to carrying financial risk, at least 50% of clinicians in an Advanced APM must use certified electronic health record technology (CEHRT). However, this provision is not applicable to MSSP ACOs, which may qualify through placing penalties or rewards on participants based on the degree of CEHRT use among eligible clinicians.

 

 

iProtean thanks the American Health Lawyers Association for permission to use its article, “Assessing the MACRA Final Rule and the Impact on Shared Savings Programs,” AHLA Weekly, October 21, 2016. Article by Mary Beth Johnston, Limo Cherian, Ryan Severson, and Steven Pine, K&L Gates LLP. The Accountable Care Organization Task Force sponsored the article.

 

 

 

iProtean subscribers, the advanced Governance course, Governance in an Era of Population Health, featuring Jim Rice, Karma Bass and Marian Jennings is now in your library. These experts discuss the implications of population health management for governing boards, governing across boundaries and how to prepare for population health initiatives.

 

And coming soon, Driving a Culture of Quality, What Works, What Doesn’t, featuring Larry McEvoy, M.D., and Stephen Beeson, M.D.

 

 

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

CMS Releases Final Rule on Controversial New Payment Program for Physicians

For your convenience:

MACRA = Medicare Access and CHIP Reauthorization Act

QPP = Quality Payment Program

APMs = Alternative Models

MIPS = Merit-based Incentive Payment System

 

 

CMS has issued the much-anticipated final rule to implement the controversial Medicare Access and CHIP Reauthorization Act of 2015. MACRA replaced the sustainable growth rate formula for Medicare physician payments, redirecting the focus to a quality and value-oriented approach.

 

The Quality Payment Program was introduced in the proposed rule in April; it garnered thousands of public comments. (“CMS Issues Final Rule on New Medicare Payment Program for Physicians, AHLA Weekly, October 14, 2016)

 

Last month, CMS announced that under the QPP, physicians would be able to “pick their pace of participation” during the transition from a fee-for-service system to alternative payment models (APMs) that reward quality, not quantity, of services.

 

2017 is a transition year for the new program. During this time, clinicians will have four options for participating in the QPP—three flexible options for submitting data to MIPS and a fourth to join Advanced APMs. The options are outlined below:

 

  • Remaining on the fee-for-service path subject to the Merit-based Incentive Payment System (MIPS), which consolidates the three existing programs:
  1. Physician Quality Reporting System
  2. Physician Value-based Payment Modifier
  3. Medicare Electronic Health Record Incentive Program for Eligible Professionals,
  • Participating in Advanced APMs, with the potential for bonuses and higher updates. APMs can apply to a specific clinical condition, a care episode, or a population.

(Quality Payment Program Executive Summary, Department of Health and Human Services, October 14, 2016)

 

CMS noted that 2018 may also be “transitional in nature to provide a ramp-up of the program and of the performance thresholds.” CMS plans to propose the parameters of the second transition year in rulemaking next year. (“CMS Issues Final Rule on New Medicare Payment Program for Physicians,” AHLA Weekly, October 14, 2016)

 

 

To review an executive summary of the final rule, click here.

 

To review a copy of the final rule and other agency fact sheets, click here.

 

 

Other Items of Note

 

Hospital Readmissions Reductions Program

 

The Healthcare Financial Management Association reported that new research “challenges the fairness and accuracy of the government’s quality measures and penalties for exceeding hospital readmissions standards and suggest changes are warranted.”

 

Researchers noted that although the readmission program was based on an assumption that hospitals should be responsible for post-discharge care coordination, there actually is no empirical evidence that supports the use of a 30-day readmission interval for assessing “hospital-modifiable” quality. They said it’s not clear whether hospitals can practicably affect care for such a long period after discharge.

 

Others have noted, “hospital care determines outcomes only within a week or two of discharge. After that period, health outcomes reflect other aspects of patient lives.”

 

Commercial ACOs

 

New research shows that accountable care organizations (ACOs) operated through commercial insurers are “considerably leaner” organizations than their Medicare and Medicaid counterparts. However, all types of ACOs have far to go in critical areas such as restructuring physician compensation and tracking financial performance.

 

 

iProtean subscribers, the advanced Governance course, Governance in an Era of Population Health, featuring Jim Rice, Karma Bass and Marian Jennings is now in your library. These experts discuss the implications of population health management for governing boards, governing across boundaries and how to prepare for population health initiatives.

 

And coming soon, Driving a Culture of Quality, What Works, What Doesn’t, featuring Larry McEvoy, M.D., and Stephen Beeson, M.D.

 

 

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

IRS Audits Show 24% of Hospitals May Be Noncompliant With Charity Care Requirements

As required by the Affordable Care Act (ACA), the Internal Revenue Service (IRS) reviews hospitals for compliance with Internal Revenue Code 501(r). Through June 30, 2016, 166 of the 692 completed reviews were referred for “field examination” for what appeared to be noncompliance with charity care requirements.

 

Issues for which field examination referrals were made include:

 

  • Lack of a Community Health Needs Assessment (CHNA) under IRC 501(r)(3)

 

  • No Financial Assistance and/or Emergency Medical Care Policies under IRC 501(r)(4)

 

  • Billing & Collection Requirements under IRC 501(r)(6)

 

(Tax Exempt and Government Entities FY 2017 Work Plan, IRS, September 28, 2016)

 

Internal Revenue Code 501(r)) requires 501(c)(3) hospitals to:

 

  • Add measures, such as written financial assistance policies and emergency medical care policies, that limit the amounts charged for emergency or other medically necessary care to patients eligible for assistance under a hospital’s financial assistance policy

 

  • Undertake reasonable efforts to determine whether individuals are eligible for assistance under a hospital’s financial assistance policy before engaging in extraordinary collection actions

 

  • Create a Community Health Needs Assessment (CHNA)

 

  • Post the CHNA on hospitals’ websites, with instructions on how patients can obtain hard copies of the CHNA

 

  • Post the financial assistance policy on hospitals’ websites, a plain-language summary and a financial assistance application

 

(“Hospitals Draw Growing Charity Care Scrutiny,” HFMA Weekly News, October 7, 2016)

 

The vagueness of some of the 501(r) requirements poses significant challenges for hospitals. For example:

 

  • One hospital posted its financial assistance policies on its website in six different languages, while other hospitals in the community posted their policies in only two of the principle languages spoken in the community.

 

  • Some—but not all—hospitals collect and make available to patients financial information on non-employed physicians who might treat the hospital’s patients.

 

  • To qualify as “widely publicizing” charity care policies, some hospitals go to inner city churches weekly to notify community members in person about policies.

 

Some industry spokesmen are concerned that efforts to publicize the charity care policies and community benefit obligations may seem substantial to hospitals, but the IRS can claim their efforts are not sufficient.

 

Hospital billing and collections have experienced unexpected effects of the new charity care requirements. A few, as reported by the Healthcare Financial Management Association, appear below:

 

  • One health system decided to include all medical bills—including those of its primary competitor—in the required calculations of patients’ ability to pay bills as part of the determination of whether they qualify for charity care.

 

  • The requirements may have pushed some hospitals away from the practice of requiring payment up front for elective procedures . . . Instead, more hospitals are focusing efforts on trying to provide a reasonable estimate of the actual patient costs and then providing financial counseling based on that.

 

  • Hospital lawsuits have arisen, where patients who were sued to collect outstanding bills have questioned whether the hospital is compliant with 501(r) requirements.

 

The IRS noted in its 2017 Work Plan that it will continue to review tax-exempt hospitals’ compliance with requirements under IRS 501(r).

 

 

 

 

iProtean subscribers, the advanced Governance course, Governance in an Era of Population Health, featuring Jim Rice, Karma Bass and Marian Jennings is now in your library. These experts discuss the implications of population health management for governing boards, governing across boundaries and how to prepare for population health initiatives.

 

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.

Is CMS “Starving” ACOs?

A former Medicare official recently spoke about the “irony” of the ACO world, noting that CMS is making the deals as hard as they can be—thereby “starving ACOs.”

 

The official, now a large system president and CEO, said there doesn’t appear to be provider resistance to ACOs; nevertheless, it was time to make some significant changes to the program.

 

“The difference between now and the 1990s is that providers feel good about the accountable care work that is going on,” he said. The major obstacle for providers remains poor financial incentives, specifically Track 1 of the Medicare Shared Savings Program (MSSP). Track 1 carries only upside-risk, and 95 percent of MSSP ACOs currently are in this track. But from a quality and cost perspective, as well as the financial incentive structure, it doesn’t make sense to participate in Track 1.

The former Medicare official suggested changes that include:

 

  • Allowing participating providers to earn up to 80 percent, instead of the current 50 percent limit, of shared savings generated in the upside-only MSSP model “for a while”

 

  • Allowing more physicians to qualify for participation in alternative payment models (APMs)—in the proposed rule, Track 1 MSSP ACOs are excluded

 

  • Using waivers to give physicians up to five years to get results before forcing them to exit the APM track

 

  • Making some technical changes to ACO benchmarking

 

  • Additional shared savings for top performers

 

  • Relief from sequestration

 

  • More flexibility to move up the risk continuum

 

(Source: “Former CMMI Chief Warns CMS Is ‘Starving’ ACOs,” HFMA Weekly News, September 30, 2016)

 

 

 

iProtean subscribers, the advanced Governance course, Governance in an Era of Population Health, featuring Jim Rice, Karma Bass and Marian Jennings is now in your library. These experts discuss the implications of population health management for governing boards, governing across boundaries and how to prepare for population health initiatives.

 

 

 

For a complete list of iProtean courses, click here.

 

 

For more information about iProtean, click here.