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From Health Law Daily, November 3, 2017

Year 2 of Quality Payment Program speeds transition, eases burdens

By Kathryn S. Beard, J.D.

Most of the changes proposed by CMS will be implemented for the second year of the Quality Payment Program (QPP), including those intended to give small physician practices greater flexibility through virtual groups and an increased low-volume threshold. One major change, however, is the weight given to the cost performance category for providers participating in the Merit-based Incentive Payment System (MIPS), which will be 10 percent, rather than the proposed zero percent. Additionally, the facility-based measurement, which CMS hoped to implement for year two, was postponed to year three due to operational constraints. The Final rule with comment period was made available as an advance release and will be published in the Federal Register on November 16, 2017; it also includes an Interim final rule with comment period on the extreme circumstances MIPS eligible clinicians may experience in the wake of regional or local catastrophic events like hurricanes.

The QPP was created under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) and gives providers the opportunity to choose between two participation tracks: MIPS and Advanced Alternative Payment Models (Advanced APMs). The rule addresses the 2018 performance period, which will affect Medicare Part B payments to providers made in 2020, and takes into account comments received on the Proposed rule (see Halfway through QPP ‘transition year,’ CMS proposes substantial changes, June 30, 2017).

MIPS performance categories. MIPS eligible clinicians receive a payment adjustment based on their MIPS composite performance score, which is calculated through four performance categories. For performance year 2018 (payment year 2020), the weight given to each performance category is as follows:

  • quality—50 percent;
  • improvement activities—15 percent;
  • advancing care information—25 percent; and
  • cost—10 percent.

In the Proposed rule, CMS had suggested keeping the weight for the quality and cost performance categories the same as in performance year 2017, 60 and zero percent, respectively. However, for the Final rule, CMS decreased the weight to quality by 10 percent, and increased the cost category weight to 10 percent. For performance year 2019 (payment year 2021) and beyond, both quality and cost performance categories will be weighted at 30 percent. The change from the Proposed rule is designed to ease the transition by being an intermediate step between zero and 30 percent.

Participants’ payment adjustments will range from negative 5 percent to a positive adjustment calculated by multiplying 5 percent by a scaling factor that will be determined to achieve budget neutrality; the scaling factor cannot exceed three. To determine the adjustment available to each participant, their performance will be compared against a performance threshold, which for year two is 15 points, up from three for year one. The exceptional performance threshold will remain 70 points.

Small practices. CMS finalized its proposal to increase the low-volume threshold, which excludes providers who do not provide services to many Medicare Part B beneficiaries from required participation, to $90,000 in Part B allowed charges (triple the year-one threshold) or 200 Part B beneficiaries (double the year-one threshold). Solo practitioners and practice groups of 10 or fewer eligible clinicians have the opportunity in year two to join together into a "virtual group" without regard to specialty or location and participate in MIPS for a performance year, and CMS developed a Virtual Groups Toolkit on the required process. Virtual group members must exceed the low-volume threshold, and the virtual group election process for 2018 runs from October 11 through December 31, 2017. There will also be a five-point small practice bonus added to the composite score for any MIPS eligible clinician or small group that submits data on at least one performance category and is part of a small practice of 15 or fewer eligible clinicians.

Facility-based measurement. Due to operational constraints, the facility-based measurement proposal will not be implemented for QPP year two. The measurement is an optional, voluntary scoring mechanism based on the hospital value-based purchasing program created by Sec. 3001 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) for facility-based clinicians who supply at least 75 percent of their covered professional services in the inpatient hospital setting or emergency department. It will begin in year three (performance year 2019) and CMS has plans to ensure operational readiness for that year.

Advanced APMs. The Final rule mostly keeps intact the Advanced APM policies from year one of QPP, but it includes changes to increase participation in Advanced APMs and promote alignment the standards that apply to Medicare and Other Payer Advanced APMs. CMS stated that it is working to simplify the Advanced APM program, and provided additional detail on the All-Payer Combination Option, which will be available beginning in performance year 2019.

Catastrophic events. In August and September 2017, three large hurricanes made landfall in the United States and caused widespread injuries and catastrophic damage to health care facilities (see Emergency preparedness in the wake of historic hurricanes, October 3, 2017). CMS and HHS moved quickly to establish reporting requirement exceptions for providers in areas that received a public health emergency declaration (see, e.g., They’ve suffered enough; Hurricane Harvey facilities get reporting relief, September 6, 2017). CMS included an Interim rule with comment period with changes to the "extreme and uncontrollable circumstance policy" for the 2017 MIPS performance period that would automatically provide clinicians affected by the hurricanes a catastrophic event exception, without requiring an application. The affected regions identified in the Interim final rule include all counties in Florida and Georgia, all municipios in Puerto Rico, all of the U.S. Virgin Islands, and an enumerated list of some Louisiana parishes and some Texas and South Carolina counties. The agency determined that the size and scale of the destruction and displacement caused by the hurricanes warranted good cause to waive the usual notice-and-comment requirements for rulemaking. Comments on the Interim final rule should be received by January 1, 2018, to ensure consideration.

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