Quality Payment Program, Year 2

In January, physicians and other eligible clinicians began their second year of Medicare’s Quality Payment Program, established by the Medicare Access and CHIP Reauthorization Act of 2015. The overarching goal of QPP remains the same: tying clinician payment to performance on quality and cost metrics.

The Centers for Medicare & Medicaid Services, however, made some adjustments to the program in its 2018 final rule, giving more clinicians, particularly those in small and rural practices, additional time to prepare before they have to participate. In addition, several new options, including virtual groups and facility-based reporting, will give providers more flexibility in how they comply. At the same time, certain requirements, including cost measurement, are intensifying in the next few years.

Because QPP is intricately linked with the industry’s shift to value-based care, hospital trustees and senior executives need to continually assess how the program aligns with their organization’s near-term and longer-term strategy. In this Q&A, the following leaders share their thoughts on what QPP conversations need to cover:

  • Akin Demehin, director of policy, American Hospital Association.
  • Rhonda Medows, M.D., executive vice president of population health, Providence St. Joseph Health in Renton, Wash.
  • Adam Myers, M.D., senior vice president, chief operating officer and chief medical officer, the Texas Health Physicians Group in Dallas.

For trustees who need a brief refresher on QPP, what would you emphasize?

Myers: The reality is that we live in a world with finite resources and infinite perceived health needs. The traditional fee-for-service payment model has incentivized hospitals and physicians to do more, emphasizing volume over value, resulting in continued growth in the overall health care spend. Now QPP is helping to move physicians and health systems closer toward value, which is defined as quality over cost.

Trustees also need to know that QPP is not a program that clinicians opt into. If they meet the eligibility criteria, they will be in QPP whether or not they are willing participants.

Medows: The number of clinicians required to participate is lower in 2018 because of eligibility criteria changes. This may be a relief for some small or rural hospitals, but it only means that these clinicians were given a delay. They shouldn’t count on this for the long term.

Demehin: Explaining QPP in a simple fashion is a tall task because it is a complex program with many nuances. But I would emphasize two things: First, QPP is a new approach to paying physicians based on how they perform on quality and cost metrics. Given the financial stakes, QPP will have a significant impact not only to the bottom line but also to day-to-day clinical practice.

Second, I’d emphasize that there are incentives in QPP to encourage providers to enter Alternative Payment Models. APMs move payment away from fee-for-service reimbursement and instead pay providers based on the quality and cost of care for particular episodes (such as bundled payment) or defined patient populations (such as accountable care organizations).

Myers: The two wings of QPP need to be explained. Many eligible clinicians still will be in [the Merit-based Incentive Payment System], which is more of a traditional track with quality and utilization reporting requirements.

Others will be in an Advanced APM, which requires providers to take on both downside and upside risk — or share in any financial losses as well as strive for a savings bonus. In contrast, nonadvanced APMs only have upside risk or a chance to earn shared savings.

What might hospital leaders want to discuss about participating in an Advanced APM versus MIPS?

Demehin: Some organizations have participated in APM models already, which could lead to such questions as: Is it time to accelerate those efforts and get more affiliated clinicians involved? Is it time to sign up for an Advanced APM model that entails more significant downside financial risk in order to access the 5 percent payment bonus?

Myers: Texas Health Resources has worked for many years to progressively take on risk. We developed needed skill sets in the Medicare Advantage space and participated in commercial ACO contracts with varying degrees of upside and downside risk. Then we built a regional network, called Southwestern Health Resources, and took part in [the Medicare Shared Savings Program's] Track 1. In 2016, we received a shared savings payout of more than $37 million.

Based on that success, we decided to embrace the Advanced APM approach and entered the Next Generation ACO in 2017.

Demehin: For those organizations that are more tentative about taking on risk, CMS has provided opportunities to experiment through the MIPS-APM pathway. Providers that participate in, for example, Track 1 of the Medicare Shared Savings Program, are in the MIPS-APM track.

I don’t want to minimize the amount of infrastructure and the intensity of resources that go into participating in something like MSSP Track 1, but it does not carry downside risk for performance in the same way as an Advanced APM.

Medows: Our board members [at Providence Health St. Joseph] asked us about Advanced APMs and whether we were ready for downside risk. We discussed how the Advanced APM models are a new program for Medicare, and we wanted to wait and see what comes of it. In addition, we did the math and figured out through modeling that most of our clinicians would fare better for now in MIPS and the hybrid MIPS-APM tracks versus the Advanced Alternative Payment Models. We do have one group in Texas that is ready for downside risk, and they’ve applied to be in an Advanced APM.

Demehin: The all-payer option is going to change the calculus somewhat. Starting with the 2019 performance year, providers can count participation in some Medicaid, Medicare Advantage and private-payer APMs toward meeting participation thresholds in the Advanced APM track.

This puts Medicare Advantage in play. It does not mean that every Medicare Advantage arrangement would count. The arrangement has to meet CMS requirements for an Advanced APM, including downside risk, quality measurement and the use of an electronic health record. CMS is going to have a process by which private payers can apply to have their model count as an Advanced APM.

For 2018, leaders will want to have a good understanding of the payment arrangements their organizations have with private payers and where those relationships might be headed.

For providers in MIPS, what do trustees need to have on their radar?

Medows: When we started briefing our board of directors in March 2016, we informed them of the four MIPS performance categories: quality, improvement activities, advancing care information and cost. We offered assurances that we are prepared for quality reporting. We reminded the board that we have aligned ourselves around a set of Core Quality Measures that our clinicians agreed upon and that are also included in the standardized measures that CMS and other payers utilize. Our doctors, nurses, etc., are already tracking these metrics via dashboards and working to improve them. We are also confident about the improvement activities and advancing care information categories.

However, the fourth performance category — costs — concerns us because we don’t yet know how that score will be determined. In 2018 [that is, the 2020 payment year], the cost metric is weighted at 10 percent of the MIPS score. Then, in 2019 [the 2021 payment year], it will be weighted at 30 percent. That’s a notable escalation. But we can’t do any cost modeling yet, because we don’t have enough information from CMS. 

Another issue is that CMS has made some quality-reporting changes for 2018. It is requiring different data fields and greater data accuracy. Both of those changes will require a great number of labor-intensive coding changes in our information systems. 

What about hospital-physician alignment? What can hospital leaders do to support their affiliated physicians under QPP?

Medows: Our board likely would enlist us in a discussion about whether we are acting as a network with our employed and affiliated ambulatory-based clinicians and whether we are using this opportunity to strengthen our integration with them. Our board gets this. They encourage us to assess what our ambulatory care looks like and to ensure that our clinicians are getting the resources they need to perform well.

Myers: One specific thing health systems can do to help physicians is to build an infrastructure that produces actionable data around cost, quality, experience and utilization at the individual provider level. The average independent physician simply can’t get those data.

At Texas Health Resources, we built our own data-analytics program and dashboard. We’ve found that the degree to which providers use the dashboard is the degree to which their performance improves. It’s an exact linear relationship.

We have also built various programs to help providers manage patients across the care continuum. For instance, in our transitions house-call program, nurse practitioners visit high-risk patients who were recently discharged. A key focus is on medication reconciliation. Nurse practitioners pull all of a patient’s medications from the medicine cabinet and various drawers — and talk wth the patients about which medicines they need to continue and which ones they don’t. They also ensure that patients are following up with their primary care physicians. This program has improved our readmission rates for this population from 26 to 14 percent in one year.

Demehin: For hospitals in rural areas that are interested in working more closely with clinicians in their community on quality and cost, the new virtual group-reporting option may be an option. This allows groups of 10 or fewer clinicians to band together for MIPS reporting.

For example, five clinicians employed at a critical access hospital could convene with small groups of radiologists or cardiologists in the area to select and report MIPS quality measures. Then their performance on MIPS would be tied together.

CMS is also rolling out a new facility-based measurement option. Is that something for hospitals to consider?

Demehin: This new reporting option, which starts in 2019, could be a strategic opportunity. It allows clinicians who spend most of their time at the hospital — such as hospitalists and anesthesiologists — to be scored under MIPS based on the hospital’s Value-Based Purchasing Program performance.

This helps to minimize duplicative reporting and is a great opportunity to spend more time on improving hospital care and less time on collecting data. As with any other MIPS reporting option, leaders need to consider whether the hospital’s VBP performance is strong enough to have their clinicians’ performance tied to it.

What else do trustees need to take into account relative to QPP?

Medows: One thing is that value-based care is underway. It’s not a “maybe.” The movement away from fee for service is slow, and it varies by market, but it is happening. For now, we have to be able to manage in two worlds: the future state for value-based care and the traditional fee-for-service model for things like acute specialty care.

Myers: Trustees also need to know that the transition from volume to value will be capital-intensive, requiring EHRs, care coordination and data analytics. These are not inexpensive, particularly when you deploy them across the care continuum.

The investments we make in these new models of care will not immediately yield full financial or outcome returns. The full [return on investment] is going to be somewhat delayed. For instance, we are looking at reducing diabetes complications in our surrounding community. When you consider the complexity involved in doing that, as well as how slowly the diabetes disease process moves, our efforts may not yield full fruit for years.

This is a new space for hospitals. Leadership teams are going to make mistakes. Sometimes, they are going to move in the wrong direction. It helps when trustees understand that there will be bumps in the road and that hospitals need time to learn.

Maggie Van Dyke is a contributing writer to Trustee.

Low-volume threshold gives more clinicians a reprieve from MIPS in 2018

2017 Conditions for Exclusion

2018 Conditions for Exclusion

  • ≤ $30K billed to Medicare Part B
  • Provide care to ≤ 100 Medicare patients
  • ≤ $90K billed to Medicare Part B
  • Provide care to ≤ 200 Medicare patients


Quality Payment Program pathways

The American Hospital Association has developed an infographic on MACRA.

The MIPS cost metric gradually takes on more weight

2019 payment year (based on 2017 performance)

  • Quality: 60%
  • Advancing care information: 25%
  • Improvement activities: 15%
  • Costs: 0%

2020 payment year (based on 2018 performance)

  • Quality: 50%
  • Advancing care information: 25%
  • Improvement activities: 15%
  • Costs: 10%

2021 payment year (based on 2019 performance)

  • Costs: 30%
  • Quality: 30%
  • Advancing care information: 25%
  • Improvement activities: 15%