Medicare Incentives for New Models of Care
Psychiatrists and other clinicians may soon qualify for Medicare payment incentives for participating in new models of care and delivery that improve quality, lower health care spending, or both. This is one of the new pathways created by the Medicare Access and CHIP Reauthorization Act (MACRA). The other pathway is the new quality reporting and incentive program known as the Merit-Based Incentive Payment System (MIPS). Both programs begin with reporting in 2017 and payment adjustments starting in 2019. On October 16, 2016, the Centers for Medicare and Medicaid Services (CMS) issued the first final rule implementing these programs. The rule establishes the regulations and major policies for these programs and sets specific guidelines for the first year.
Who Can Earn the New APM Incentive Payments?
Qualifying Participants (QPs) are physicians, clinicians, and group practices with substantial revenue or patients in one or more “advanced” alternative payment models (Advanced APMs).
QPs enjoy three advantages:
- An annual 5% “APM Incentive Payment” on their Medicare Part B payments, available each year from 2019 through 2024. This is given as a lump sum and calculated as a percentage of their total payments for Part B services in the prior year.
- Exclusion from MIPS reporting requirements and MIPS payment adjustments, even after the APM incentives expire in 2025.
- Slightly higher annual “updates” (increases) in all Medicare Part B payments starting in 2026 – 0.75% versus 0.25%.
There are three routes to qualifying for these advantages as a QP:
- By receiving a major portion of your total Medicare payments for Part B services through an Advanced APM. The percentage must be at least: 25% in 2017 or 2018; 50% in 2019 or 2020; or 75% in 2021 or 2022.
- By having a significant portion of your Medicare Part B patients in an Advanced APM. The percentage must be at least: 20% in 2017 or 2018; 35% in 2019 or 2020; or 50% in 2021 or 2022.
- These criteria may be met through participation in non-Medicare payment arrangements, when the "All-Payer Combination Option" begins with 2019 participation (and incentives in 2021).
Partially Qualifying Participants (PQPs) have a slightly lower percentage of revenue or patients tied to Advanced APMs than QPs. PQPs do not qualify for the 5% incentive available in 2019-2024 or the higher annual increase that starts in 2026. However, they may elect not to participate in the Medicare MIPS quality reporting program, without incurring any penalty.
Eligible Clinicians can be QPs or PQPs for the purposes of Advanced APMs. These include all physicians, as well as psychologists, social workers, nurse practitioners, physician assistants, and other non-physician clinicians.
What is an "Advanced APM?"
CMS must approve all Advanced APMs. There are four threshold criteria which any model must meet in order to be considered for Advanced APM status:
- First, the model itself must either be: a) approved by the CMS Innovation Center; b) part of the Medicare Shared Savings Program; or c) a certain type of federal demonstration program.
- Second, the model must require at least 50% of its participants to use certified electronic health record technology (CEHRT). Any hospital within the APM must also use CEHRT.
- Third, the model must tie at least some payments to performance on one or more quality measures comparable to those under the MIPS program. These may include measures used by qualified clinical data registries (QCDRs). At least one outcome measure is required, if an appropriate MIPS outcome measure is available.
- The final, most controversial requirement is the APM must agree to take on “more than nominal” financial risk. This means it must suffer financial consequences for failing to meet cost and/or quality metrics. The consequences could be in the form of lower payments, deductions, or even the return of funds. The amount of risk is lower for 2017 and 2018, then increases for later years. Medical homes have lower risk than other APMs. Full capitation risk arrangements meet the risk criteria for “Other Payer” Advanced APMs.
Which Models Qualify as "Advanced" APMs in 2017 and 2018?
CMS has approved the following models as Advanced APMs for the 2017 participation year and incentives in 2019:
- Medicare Shared Savings Program Accountable Care Organizations (ACOs) – Tracks 2 and 3
- Next Generation ACO Model
- Comprehensive Primary Care Plus (CPC+)
- Comprehensive End-Stage Renal Disease (ESRD) Care Model
- Oncology Care Model – Two-sided risk arrangement
In 2018, CMS plans to add the following models as Advanced APMs:
- Medicare Shared Savings Program ACOs – Track 1+ (with less risk than Tracks 2 or 3)
- New Voluntary Bundled Payment Model
- Comprehensive Care for Joint Replacement Payment Model – CEHRT track
- Advancing Care Coordination through Episode Payment Models (Cardiac and Joint Care) – Track 1 (CEHRT track)
Will There Be More "Advanced" APMs in the Future?
CMS contemplates upcoming additions and adjustments to the lists of Advanced APMs. CMS wants to build a portfolio of APMs that collectively allows participation by a broad range of physicians and other practitioners. More models are likely to be proposed and developed in partnership with the clinician community and the Physician-Focused Payment Model Technical Advisory Committee (PTAC). The PTAC was established to advise physicians on how to develop new models of care and to ensure that physicians’ ideas for new models are given serious and timely consideration. CMS has expanded the focus of the PTAC to also include models of care developed by non-physician clinicians. The PTAC is charged with reviewing and assessing proposals for new models of care, and creating policies and procedures for submission of such proposals. The PTAC can recommend certain models to CMS for evaluation, testing, and possible adoption by the CMS Innovation Center. CMS has the final authority to decide which models to test or adopt, and which to deem as Advanced APMs. CMS has indicated in the rule that not all models recommended by the PTAC or implemented by the CMS Innovation Center may ultimately qualify as Advanced APMs.
What Does This Mean for Psychiatrists?
Despite the rigorous requirements, a small number of psychiatrists are expected to earn these incentives in the early stages of the program. CMS estimates that 70,000 to 120,000 clinicians will receive 5% bonuses in 2019 for participating in Advanced APMs in 2017. Of these, only 229 psychiatrists, or 0.7% of the 33,632 who receive Medicare Part B payments, are projected to meet the QP definition for 2017 and receive this bonus in 2019.
At least in the early years, the main emphasis is clearly on Advanced APMs that involve primary care or costly medical procedures or diagnoses. At first, psychiatrists who are involved in ACOs or the CPC+ initiative will have the best chance of earning incentives. As more models are developed and approved as Advanced APMs, psychiatrists will have more opportunities to qualify for either the incentives as a QP, or the ability to opt out of MIPS as a PQP.
Unfortunately, there are currently no mental health/substance use models of care that have been approved as Advanced APMs. The APA will be working with member experts, including the APA Committee on Reimbursement, to explore opportunities for more psychiatrists to participate in new models of care and to be rewarded for their efforts.
What should I do if I have questions or issues regarding Medicare quality and payment reform?
APA members can submit questions by email to APA staff at email@example.com.
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