CMS releases Quality Payment Program Year 2 Final Rule

The Centers for Medicare and Medicaid Services (CMS) recently published in the Federal Register the Quality Payment Program Year 2 Final Rule for the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). This Final Rule provides updates for both Year 2 and subsequent years of the Quality Payment Program. The comment period will expire Jan. 2, 2018. The following information reflects key takeaways from the Year 2 Final Rule.

Merit-based Incentive Payment System (MIPS) Low-Volume Threshold

The low-volume threshold for eligible participation in MIPS is increasing in Year 2. In performance Year 1, clinicians included in the MIPS program were those who billed at least $30,000 in Medicare Part B claims and treated at least 100 Medicare Part B beneficiaries. CMS is now raising this threshold to include physicians who bill at least $90,000 in Medicare Part B claims and treat at least 200 Medicare Part B beneficiaries. Voluntary reporting remains an option for those clinicians who are exempt from the Program.

Performance Categories and Periods

In performance Year 1, CMS elected not to include the Cost category in the MIPS final score. For Year 2, Cost is included in the final score and accounts for 10% of the final score. The MIPS final score determines if the clinician receives a positive, negative or neutral payment adjustment for a given performance year.

With this change, CMS is increasing the performance periods for each measure. Clinicians are required to report 12 months of Quality and Cost measures to be eligible to receive the maximum 100 points. The table below illustrates the minimum performance period for each category for the Year 2 Final Rule.

Advanced Alternative Payment Models (APMs)

The basic criteria for Advanced APMs are:  1) require participants to use certified EHR technology, 2) provide payment for covered professional services based on quality measures comparable to those used in the MIPS quality performance category; and 3) either: (A) be a Medical Home Model expanded under the CMS Innovation Center authority OR (B) require participants to bear more than nominal financial risk. These criteria remain unchanged for performance Year 2; however, CMS has provided more flexibility for Medical Home Models as well as nominal risk criteria.

The nominal amount standard for Medical Home Models is increasing the minimum required amount of total risk more gradually, starting at 2.5% average estimated Medicare revenue for all providers and suppliers in APMs in performance year 2018. It will increase every performance year by 1%, with a maximum 5% average estimated total in performance year in 2021 and thereafter.

The general nominal amount standard is extending the 8% potential Medicare revenue risk for an additional two years through performance year 2020. Initially, this standard was only valid for performance years 2017 and 2018.

All-Payer Combination Options and Other Payment Advanced APMs

All-Payer Combination Options and Other Payment Advanced APMs are future APM options for performance year 2019. Eligibility of qualified All-Payer Combination Options and Other Payment Advanced APMs will be determined by CMS prior to performance year 2018, through a new system called the Payer Initiated Process. In the Year 1 Final Rule, Qualifying APM Participants (QPs) reported information about payment arrangements they participated in to CMS after the performance year was due to end for performance year 2019.  In the Year 2 Final Rule, the following two pathways exist for reporting payment arrangement information:

• a voluntary Payer-Initiated Process that will allow payers to request that CMS determine whether the payment arrangement they participate in qualifies as an Other Payer Advanced APM; or
• an Eligible Clinician Initiated Process in which eligible clinicians may request that CMS determine whether the payment arrangement that they participate in qualifies as an Other Payer Advanced APM (if the APM Entity has not previously done so or ineligible).

All-Payer Combination Options and Other Payment Advanced APMs determination processes start January 2018 with critical deadlines throughout the year. CMS will post final determinations in December 2018, for usage in performance year 2019.

Nominal Amount Standards

All-Payer Combination Options and Other Payment Advanced APMs must meet similar criteria to become CMS approved Advanced APMs. CMS has made changes to the nominal amount standards for All-Payer Combination Options and Other Payment Advanced APMs for performance year 2. In the Final Rule, an 8% revenue based nominal amount standard for total risk (which is the same as the Medicare Option general nominal amount standard) has been added to the existing 30% marginal risk and 4% minimum loss rate requirement.

APM Scoring Standard

The APM Scoring Standard will be consistent across all MIPS APMs. Quality will be assessed and weighted at 50% of the total APM score. Improvement Activities will be assessed and weighted at 20%, and the remaining 30% is placed in the Advancing Care Information domain.

For more information on the Quality Payment Program Year 2 final rule, visit the CMS Quality Payment Program webpage.

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