AMA Medicare Access and CHIP Reauthorization

Act Proposed Rule Summary

The following is a high-level initial overview of key provisions in the proposed rule. AMA staff is
continuing a rigorous review of the proposed rule and will provide detailed comments to CMS by
the June 27 deadline. The proposed rule is the start of a long process before final requirements
are in place. Our Advocacy efforts will aggressively press CMS to make improvements in the
final rule and engage the congressional committees of jurisdiction as part of the oversight
process.

Merit-Based Incentive Payment System (MIPS)

Program Overview
Program structure: Creates a new payment program that includes the following
components:
o Quality Performance 50% of score in the first year (replaces the Physician
Quality Reporting System (PQRS) and some components of the Value-Based
Modifier (VBM)
o Resource Use 10% of score in the first year (replaces the cost component of
the VBM)
o Clinical Practice Improvement Activities (CPIA) 15% of score in the first year
o Advancing Care Information 25% of score in the first year (replaces the
Meaningful Use (MU) program)
Provides for group reporting: Allows group data submission and performance to be
assessed as a group (as opposed to the individual clinician).
Telemedicine: Provides for telehealth and remote patient monitoring as part of CPIA,
but does not mandate use. Ensures that telehealth is considered a patient facing service
for purposes of MIPS reporting.
Issues that need to be addressed:
o Individual and small group practices: Modifications will be needed, such as
adjusting the low volume exemption, to address the proposed rules Regulatory
Impact Analysis showing that physician practices of less than 10 clinicians would
account for an estimated 70 percent of the MIPS penalties in 2019. The rule,
however, does provide some consideration of individual and small group
practices by proposing alternative requirements. For instance, a physician
reporting as an individual or in a group of less than 10 clinicians is exempted
from the All-Cause Hospital Readmission measure and physicians in a practice
of 15 or less have a lower CPIA threshold.

Maintains performance period: Continues to use a two-year look-back period;

performance in 2017 would impact physicians 2019 payments. This continues
the problem of delayed feedback for physicians.

Quality Performance
Reduces reporting burden: Physicians would report on six rather than nine measures
and physicians would receive partial credit for measures.
Provides greater reporting options: Per AMAs request, proposes to remove the
requirement that measures must fall into certain quality domains, which constrained
choice for physicians.
o Instead, a physician must report on one cross-cutting measure and one outcome
measure, if available. If an outcome measure is not available, a physician may
select a high priority measure (e.g., appropriate use, patient safety, efficiency,
patient experience or care coordination measures). These requirements are
similar to the current Qualified Clinical Data Registry (QCDR) requirements.
Offers flexibility: Would allow physicians to 1) select individual measures or specialty
specific measure sets; and 2) report through claims, electronic health record (EHR),
registry, QCDR, or group practice reporting web-interface.
Encourages the use of QCDRs and electronic sources: Recognizing the cost to
report through electronic sources (CEHRT), CMS provides bonuses for physicians who
chose to report quality measures through an EHR, qualified registry, QCDR or webinterface. If eligible, a physician could earn one bonus point per each reported measure
reported through an electronic source with a cap (up to a maximum of five percent of the
denominator of the quality performance category score).
Issues that need to be addressed:
o Physician specialties that do not have outcome measures or measures in high

priority areas will be at a disadvantage under the proposed quality performance

scoring methodology.
o CMS proposes to utilize administrative claims based population health measures
that were previously part of the VBM. These measures were developed for use at
the hospital and community level and have low statistical reliability when applied
at the individual physician level and, at times, at the group level.
o The bonuses available for the use of CEHRT are encouraging but the
requirements to obtain the bonus may be too stringent for the majority of
practices.
Resource Use
Transitions to episode-based measures: CMS proposes to add 41 episode-based
measures to account for differences among specialties.
Recognizes the need for improved attribution: CMS plans on making refinements to
its attribution methodology starting in 2018, although this will not be in time for the 2017
reporting period, which will impact the 2019 payment adjustment.
Issues that need to be addressed:
o CMS continues the use of the flawed cost measures utilized in the VBM, and the

proposed initial methodology makes it difficult to make accurate and equitable

comparisons of costs in physician practices.

o While the AMA believes episode groups are a better way to assess a physicians

resource use, we are concerned with using episode groups in conjunction with
cost measures.
o Episode groupers have great potential but we do not believe that all of the
episode groups CMS has put out for review to date are ready for prime time.
o Making the category workable will require CMS to replace the current hospitalintended cost measures and focus on various methodological improvements,
including more sophisticated risk adjustment, more granular specialty comparison
groups and attribution methods that are relevant across specialties. Special effort
should be directed at eliminating flaws that have made practices with the most
high risk patients more susceptible to penalties than other physicians.
Clinical Practice Improvement Activity (CPIA)
Offers choice: CMS proposes to allow physicians to select from a list of more than 90
activities.
o Activities that would count for CPIA include:
Completion of the American Medical Associations STEPS Forward
program;
Hiring diabetes educators; and
Participation in a QCDR
Creates a shorter reporting period: Rather than requiring a full year of reporting, CPIA
activities would be performed for at least 90 days during the performance period.
Promotes medical homes: A Patient Centered Medical Home (PCMH) would count for
full credit if it is a national recognized accredited PCMH, a Medicaid Medical Home
Model, or has a National Committee for Quality Assurance (NCQA) Patient-Centered
Specialty Recognition.
Provides accommodations for small, rural, and non-patient facing physicians:
Under the proposal, these physicians would need to meet a lower reporting threshold.
Advancing Care Information (replaces Meaningful Use)
New Scoring: Moves away from a pass-fail program design by combining a Base Score
and Performance Score into an overall ACI score. The Base Score (worth 50 percent of
the overall ACI score) only requires attestation or simple yes/no options. The
Performance Score does not utilize thresholds and allows physicians to receive partial
credit on measures. Physicians can also receive a bonus point for reporting to multiple
public health and clinical data registries.
Reduces measures: No longer requires physicians to report on two measures that
hindered usability--computerized provider order entry (CPOE) and Clinical Decision
Support (CDS). Removes clinical quality measures to streamline overall quality reporting
in MIPS.
Eased reporting processes: Allows group data submission and performance to be
assessed as a group (as opposed to the individual clinician). Permits physicians to
submit data for the first time through QCDRs.
Issues that need to be addressed:
o The proposed rule would primarily change the scoring without changing the
actual measures. We had asked CMS to significantly overhaul and broaden the
patient engagement and health information exchange measures. The new
program would only change how these measures are counted.

o
o
o

The proposed rule would retain a pass-fail element in the base performance
score (Protecting Patient Information), which can make up half of the ACI total
score. This measure requires a security risk analysis, which has historically been
challenging for physicians.
The proposed rule would not leave any room for innovation (i.e., no credit given
for pilot programs, etc.).
As written, the proposed ACI component is complicated to explain, particularly as
part of the larger MIPS program.
The proposed rule would eliminate exclusions that many physicians took
advantage of to avoid reporting on certain measures and requires new
participants to start reporting under a full calendar year (instead of a 90-day
reporting period).

Alternative Payment Models (APM)

Advanced APMs
Advanced APMs defined as those that meet criteria for linking payments to quality
measures, using EHRs, and meeting nominal risk standard. Only participants in Advanced
APMs at MACRA thresholds (beginning at 25% of revenues or 20% of patients for 2019)
qualify for 5% lump sum payments.
o Current models that meet Advanced APM criteria are Track 2 & 3 ACOs, Next
Generation ACOs, Comprehensive Primary Care Plus (CPC+), most
Comprehensive ESRD Care organizations (ESCOs) and Oncology Care Model
Track 2.
6 (1%) MSSP ACOs are in Track 2 and 16 (4%) are in Track 3
There are 13 ESCOs and 18 Next Gen ACOs
CPC+ just announced on 4/11/16 and OCM participants not yet known
o Quality measure requirements for Advanced APMs seem flexible.
o In 2017, 50% of participants in Advanced APMs would need to use certified
EHRs.
o Nominal risk requirements are complex and likely unattainable. Given lack of
interest by Track 1 ACOs in moving to Tracks 2 & 3, CMS belief that more and
more APMs will meet this high bar over time is not realistic.
Nominal risk requirements are difficult to understand and would be hard
to explain to physicians considering APM participation. Bottom line is
minimum 4% of benchmark spending for APM Entity must be at risk of
being withheld, repaid, or cut from APM payments by CMS. Using ACOs
as example, this means 4% of the total cost of care for at least 5,000
patients would need to be at risk.
Practice investments and ongoing costs associated with APM not counted
as risk.
For medical homes, minimum potential loss starts at 2.5% of total
Medicare revenue for 2019 and increases to 5% in later years. Medical
homes may count as losses the additional payments the participating
physicians may be receiving, such as monthly care management
payments, but other APMs cannot count these payments.
o Advanced APM performance period would be same as MIPS = 2017. Lump sum
bonus payments would be made 18 months later in mid-2019. CMS

acknowledges applications for many APMs will be due to CMS before this rule
will be finalized.
MIPS APMs
MIPS APM participants can improve their MIPS scores in APMs that do not meet criteria to
be Advanced APMs or do not meet the revenue or patient thresholds to qualify for
bonuses.
o APM (such as a Track 1 ACO) would report quality for them under the MIPS
Quality Payment Program.
o MIPS APMs will have their resource cost component weight reduced to zero,
thus exempting them from this MIPS component. The 10% weight that would
have been assigned to resource costs is used to increase CPIA and ACI weights
by 5% each. As APM participation qualifies for CPIA, this is an advantage for
participating physicians.
Physician Focused Payment Models
Physician Focused Payment Model proposals from stakeholders, such as specialty
societies, will be submitted to the Physician-Focused Payment Models Technical Advisory
Committee (PTAC) that was created by MACRA. NPRM proposes criteria for use by PTAC
in reviewing the proposals. Payment models proposed to PTAC must be Medicare or
multi-payer models that include Medicare and must be physician-focused, not other
practitioners.
Issues that need to be addressed:
o Nominal risk definition must be modified. Spending benchmarks for APMs
typically include hospital, post-acute care, lab tests and other Medicare costs,
and Medicare ACOs are at risk for total patient care costs. As physician spending
is only 16% of total Medicare spending, 4% of APMs spending benchmark could
average 25% of physicians professional services, far more than 2019 MIPS
penalty risk. Physicians cannot estimate or control spending on hospital and
other costs included in APM benchmarks. A more appropriate definition of
nominal financial risk would be 4% of professional services revenues or an
equivalent dollar amount. This would make the risk of losses in an APM
equivalent to the penalty risk in MIPS for the first performance year and, because
it is a knowable amount, physicians could set aside the funds that are at risk in
case they need to be repaid at the end of the year. NPRM impact analysis states
that HHS has used 3% of physicians revenues as a standard for significant
impact for many years, so proposed standard for nominal risk is unreasonable
even by HHS standards.
o Performance period for APM participation is a serious problem. The 25% APM
participation threshold for 2019-2020 is the one physicians will have the easiest
time meeting in order to get the 5% bonus payments, but the Jan. 1, 2017 start
date will prevent the vast majority of physicians from having any possibility of
being qualified for these payments.
o Will need to get a better sense of what model designs CMS is willing to accept.
MIPS APM category could be a good alternative for physicians not in Advanced
APMs, but no list is provided in NPRM of what might qualify as a MIPS APM.
Needs to include APMs for specialists and be broader than ACOs.

Current AMA and CMS resources

AMA
Understanding Medicare payment reform (MACRA)
How to prepare for Medicares new payment systems
AMAs efforts to improve Medicare payment reform implementation
Understanding the Merit-Based Incentive Payment System (MIPS)
Preparing your practice for value-based care (STEPS Forward module)
CMS
CMS: Where can I find more information on the proposed rule?
CMS: Fact sheet on the proposed rule
CMS: Fact sheet on advancing care information