®

Should your practice reach for the gold?

®

APMs: THE NEW GOLD

STANDARD IN

QUALITY PAYMENTS:

ALTERNATIVE

PAYMENT MODELS

Continuum Health Alliance, LLC402 Lippincott DriveMarlton, NJ 08053856.782.3300www.continuumhealth.net

AS HEALTHCARE SHIFTS FROM A FEE-FOR-SERVICE TO A VALUE-BASED

SYSTEM, MEDICARE IS MAKING SWEEPING CHANGES TO HOW IT PAYS PHYSICIANS.

The Centers for Medicare and Medicaid Services (CMS) has introduced new

regulations and reporting requirements—as well as unprecedented potential for

financial rewards and penalties.

Indeed, doctors who achieve the highest levels of “value” will earn substantial

increases in their Medicare Part B payments. Conversely, those who do little or

nothing to address the new requirements will incur significant reductions.

Commercial payers are adopting similar models, further expanding the potential

impact of these changes—positive or negative—on a practice.

Physicians need to start acting now, so as not to fall behind and put their

practices at risk.

Fortunately, doctors don’t have to do it alone: a qualified enablement partner

can efficiently manage this complex transition.

MEDICARE’s FAR-REACHING IMPACT:

CMS is responsible

for about half of all

U.S. medical claims—

setting the standard

for the industry. In

other words, where

CMS goes, commercial

payers follow.

High Qualityof Care

Positive Patient Experience

Lower Overall Cost of Care

High Value =

Increases in Medicare Part B payments

VALUE-BASED CARE & PAYMENT MODEL

$C O N T I N U U M H E A LT H | 2

CHOOSE your path

The Medicare Access & CHIP Reauthorization Act (MACRA) of 2015 created the

Quality Payment Program (QPP), which offers physicians a choice between two

different reporting paths. Both started in the 2017 reporting year:

n The Merit-Based Incentive Payment System (MIPS). This new structure encomp-

asses CMS’s current models for measuring physician quality and cost of care, and

adds “clinical practice improvement” activities, such as expanding patient access

or being a patient-centered medical home.

n Advanced Alternative Payment Models (APMs). These are payment arrangements

in which clinicians accept financial risk for providing coordinated, high-quality

care. As an incentive to take on this risk, CMS offers increased monetary rewards.

CMS has designated specific payment models as Advanced APMs—including

certain medical homes, accountable care organizations (ACOs) and bundled

payment models—and it will continue to approve new models. Advanced APMs

are similar to one another, with variations based primarily on the different quality

measures they use—such as those for primary care, oncology, and end-stage renal

disease. In addition, CMS provides Advanced APM options that incorporate

non-Medicare payment arrangements to encourage these advanced,

value-based models across commercial payers and state Medicaid programs.

The APM track offers higher financial rewards than the MIPS track, but requires

more advanced levels of value-based activities. APMs also require physicians to

be part of a larger group (such as an ACO or medical home*), and to bear greater

financial risk.

Most physicians who see Medicare patients were required to report under either the

MIPS or Advanced APM track starting in January 2017. Those in Advanced APMs

were still required to complete MIPS reporting for the first year (2017), so CMS can

determine whether they meet the Advanced APM criteria. Additionally, 2017 MIPS

reporting will provide spending benchmarks for a prospective Advanced APM.

*CMS has not yet defined the term “medical home.”

“WE NEED TO EMPOWER PATIENTS WITH INFORMATION SO THEY

KNOW WHEN THEY’RE PICKING A PROVIDER… IS THIS A HIGH

VALUE DOCTOR? WHAT’S THE COST OF THE SERVICE AND WHAT

ARE THE OUTCOMES? WHAT’S THE VALUE FOR IT?”

— Seema Verma, CMS Administrator, in an

interview with Forbes December 5, 2017

C O N T I N U U M H E A LT H | 3

WEIGHING THE OPTIONS: ALTHOUGH THESE SYSTEMS ARE COMPLEX, ONE

THING IS CLEAR: DOCTORS MUST DETERMINE WHERE THEY STAND—AND WHERE THEY WANT

TO GO—IN ORDER TO PLAN EFFECTIVELY FOR THEIR FUTURE SUCCESS. WHETHER THEY

REPORT UNDER MIPS OR PURSUE THE ADVANCED APM TRACK WILL DEPEND UPON THEIR

GOALS, INTERESTS AND PREFERENCES FOR THEIR PRACTICE.

Consider:

n Do you want your income to be more certain but with lower potential rewards

(MIPS) or less certain but with higher rewards (Advanced APM)?

n Would you rather be measured on your own (MIPS) or as part of a virtual group

(MIPS or APM)?

n What would your future revenue look like under each model?

The status quo is not an option. At minimum, most physicians

must meet MIPS requirements or face increasing penalties. The

components of MIPS are shown below. For more information

about MIPS, download our white paper titled “How Physicians

Can Win in the New Healthcare Environment.”

COMPONENTS OF MIPS (MIPS SCORE: 0 – 100 POINTS)

Advancing Care Information(successor to Meaningful Use)

VBM Cost

10% in 2018

30% in 2019

PQRS/VBMQuality

50%

Clinical PracticeImprovement 15%

25% 50% 15%Advancing Care Information

includes measures related to

patient engagement, patient

electronic access, and use

of certified electronic health

record technology (CEHRT).

Physician Quality Reporting System—now being

replaced by MIPS reporting—required physicians and

other eligible providers to report quality data

in order to avoid Medicare payment penalties.

Value-Based Modifier is the measurement program

that preceeded MIPS. VBM quality is based on

PQRS data, including outcome measures and

patient surveys.

CMS lists more than 100

qualifying activities, from

increased patient access and

care coordination, to enhanced

patient engagement and being a

patient-centered medical home.

10%30%

Value-Based Modifier

cost is a provider’s

Medicare cost data.

®

Doctors need to act now — or risk losing ground

®

MIPS: HOW PHYSICIANS

CAN WIN IN THE

NEW HEALTHCARE

ENVIRONMENT

Continuum Health Alliance, LLC402 Lippincott DriveMarlton, NJ 08053856.782.3300fax 856.782.3526

C O N T I N U U M H E A LT H | 4

MIPS: More Information

MIPS features a continuum of financial incentives and penalties, which will increase

annually through the 2022 payment year. These adjustments can range from +/- 4%

of Medicare Part B payments in 2019, to +/- 9% in 2022. Additional payments are

available for exceptional performance. (There is a two-year lag between reporting

and payment years.)

Alternatively, the Advanced APM option provides a 5% incentive payment for

the first five years (payment years 2019-2024), followed by higher fee schedules

than MIPS. In addition, this track will feature larger annual Medicare Physician Fee

Schedule updates in 2026 and beyond.1 The risks and rewards are explained in

more detail on the following pages.

THIS IS “A HISTORIC OPPORTUNITY TO FINALLY

MOVE TO A SYSTEM THAT PROMOTES QUALITY OVER

QUANTITY AND BEGINS THE IMPORTANT WORK OF

ADDRESSING MEDICARE’S STRUCTURAL ISSUES.”

— Congressman Fred Upton, Chairman,

House Energy and Commerce Committee

C O N T I N U U M H E A LT H | 5

CRITERIA FOR ADVANCED APMs: IT IS IMPORTANT TO

DISTINGUISH BETWEEN APMs AND ADVANCED APMs. APMs INCLUDE KEY

FEATURES THAT ENHANCE VALUE AND HELP PHYSICIANS EARN PAYMENT

INCENTIVES. HOWEVER, ONLY CERTAIN APMs—THOSE CONSIDERED ADVANCED—

ARE ELIGIBLE FOR GREATER INCENTIVES OVER MIPS PAYMENTS AND ARE NOT

SUBJECT TO MIPS PENALTIES.

1 Use certified electronic health record technology (CEHRT) to document and

communicate clinical care. In its first year, 50% of the APM’s eligible clinicians

(ECs) must use CEHRT. After the first year, 75% of ECs must use CEHRT. (Under

the CMS Shared Savings Program only, ECs may receive a penalty or reward based

on their degree of CEHRT use.)

2 Report quality measures comparable to those of MIPS. The APM can use

actual MIPS measures or other measures that are evidence-based, reliable

and valid. At least one outcome measure must be used, unless none are

available under MIPS. The APM’s Medicare Part B payments are based on these

quality measures.

3 Assume sufficient financial risk. The APM entity must assume risk for

monetary losses of a certain magnitude. These losses are CMS penalties that

kick in if the APM exceeds its expenditure benchmark by a specific amount.

Or, the APM can avoid the risk requirement by being an “expanded” medical home

model per the CMS Innovation Center. Moreover, CMS applies lower financial risk

standards to medical homes that are not expanded to accommodate entities

with 50 or fewer clinicians.

AN ADVANCED APM MUST MEET THE FOLLOWING CRITERIA:

CRITERIA FOR AN ADVANCED APM:

+ +CERTIFIED

EHR

TECHNOLOGY

REPORT

QUALITY

MEASURES

ASSUME

FINANCIAL

RISK

C O N T I N U U M H E A LT H | 6

THE STANDARD risk requirement is as follows:

n Total risk of at least 8% of the average estimated Parts A and B revenue

of the participating APM entities for the qualifying-participant performance

period in 2017 and 2018 (the revenue-based standard), OR 3% of the expected

expenditures that an APM entity is responsible for under the APM for all

performance years. The 8% revenue-based risk will continue through the 2020

performance year. (Total risk is the maximum amount of possible losses.)2

n Marginal risk of at least 30%. (Marginal risk is the percentage of expenditures

above the APM benchmark for which the APM entity is responsible.)

n Minimum loss ratio (MLR) of no more than 4%. (MLR is the amount by which

spending cannot exceed the APM benchmark before the APM entity is responsible

for losses.) In other words, CMS has established provisions to cap potential losses

associated with assuming downside risk.

THE FOLLOWING APM MODELS CURRENTLY QUALIFY AS ADVANCED APMs:

T Y P E S O F A D VA N C E D A P M s

Shared Savings Program

CMS Tracks 1+, 2 and 3

Comprehensive Primary Care Plus

(CPC+)

Comprehensive Care for Joint Replacement (CJR) Payment Model

Track 1 – CEHRT

Next Generation Accountable Care Organization

(ACO)

Comprehensive End-Stage Renal Disease Care

Two-Sided Risk (ESRD or CEC: large dialysis organization arrangement)

Oncology Care Model

(OCM) Two-Sided Risk Arrangement

Coming in

2019

All-Payer Combination Model

A combination of Medicare and Other Payer Advanced APMs (e.g., Medicaid and Medicare Advantage)

OTHER APM MODELS CAN QUALIFY AS ADVANCED APMs IF THEY MEET REQUIRED CRITERIA, INCLUDING:

CMS Innovation Center models

(under MACRA section 1115A, other than a Health Care Innovation Award)

Demonstration models

under the Health Care Quality Demonstration Program or the Affordable Care Act

C O N T I N U U M H E A LT H | 7

In order to receive incentive payments for Advanced APM participation, clinicians

must meet either certain payment percentages or patient volumes through the APM.

For instance, in the 2018 reporting year, clinicians must receive at least 25% of their

payments or see at least 20% of their patients through an Advanced APM. These

figures increase over time, as shown in the table below.

Participation in “Other Payer” Advanced APMs (such as those arranged through

commercial payers) can count toward these requirements. (See next page for a

potential example of an Other Payer Advanced APM). Moreover, an “All-Payer

Combination Option”—based on a clinician’s level of Medicare plus “Other Payer”

Advanced APM participation—offers another approach, starting in the 2019 reporting

year. These models will enable clinicians to more easily meet the minimum payment/

patient thresholds for Advanced APM participation. (A separate set of Medicare and

non-Medicare thresholds applies to these models.)

Clinicians who participate in Advanced APMs but don’t meet these incentive pay-

ment requirements can still receive financial rewards under MIPS. They would receive

MIPS credit in the Clinical Practice Improvement category. Providers can also avoid

MIPS penalties if they meet a lesser standard: For the 2019 and 2020 payment years,

they must receive at least 20% of their Medicare payments or see at least 10% of their

Medicare patients through an Advanced APM. Those figures rise over time, reaching

50% and 35% respectively by the 2023 payment year.

ADVANCED APMs: Potential Rewards QUALIFYING ADVANCED

APM ENTITIES WILL RECEIVE A 5% MEDICARE PART B INCENTIVE PAYMENT FROM

2019 THROUGH 2024. STARTING IN 2026, THEY WILL RECEIVE A HIGHER FEE

SCHEDULE UPDATE: 0.75% FOR ADVANCED APMS VERSUS 0.25% FOR PHYSICIANS

REPORTING UNDER MIPS. ADVANCED APM PARTICIPANTS WILL ALSO BE EXCLUDED

FROM MIPS ADJUSTMENTS.

CMS has already met a key goal: 30% of Medicare payments were based on

quality and value by the end of 2016. The goal is now 50% by the end of 2018.

GOVERNMENT IS FAST-TRACKING THE SHIFT TO VALUE

Goal for 2018:MEDICARE PAYMENTS based

on Quality and Value

2016:MEDICARE PAYMENTS based

on Quality and Value

30% 50%

C O N T I N U U M H E A LT H | 8

KEYS TO SUCCESS

The model uses a centralized and scalable care coordination program that includes

the services of registered nurses, a social worker, a pharmacist and support staff.

The care coordination team is responsive to both practices and patients, and works

proactively to oversee each patient’s health the centralized design makes the pro-

gram affordable to practices of all sizes.

Care coordination is a vital element of “practice transformation”—the shift to a

patient-centered, value-based approach that permeates every aspect of a practice.

Continuum helps each practice transform through other enhancements as well.

These activities are supported by actionable intelligence, as determined through

reporting and analytics.

*This model’s acceptance by CMS is pending.

Continuum Health has managed a rewarding, value-based payment arrangement

since 2012 between a large commercial payer and a primary care and specialist

group serving approximately 20,000 member patients ages 18 and over. This is an

example of the type of model that could satisfy CMS’s “Other Payer” Advanced

APM category* (see Types of Advanced APMs list on page 7).

The model’s financial arrangement includes:

n Up-front incentive payments by the payer

based on each practice’s number of payer

member patients (per-member-per-month fee).

n The payer provides shared savings incentives

based on performance. Physicians receive

bonuses based on quality, overall cost of care

and patient engagement.

OUTCOMES TO DATE INCLUDE:

Disclaimer: This case study is intended to provide an example of how an actual Continuum client has benefited

from Continuum’s services. Continuum does not claim that the outcome of this case study is a typical result, or

that it is necessarily representative of all those who will use its services. Continuum expressly disclaims any

representations or warranties in relation to this case study or the information presented in this white paper.

“OTHER PAYER” MODEL

Medicare Advantage,

Medicaid, and

commercial payers

create “Other Payer”

Advanced APMs.

A successful example: “Other Payer” Model

C O N T I N U U M H E A LT H | 9

17% lower overall cost

of care

19% reduction in

inpatient admissions

90th percentile of care

quality, as ranked by the

NCQA

Hospital 30-day readmis-

sions reduced to 12%Emergency department

visits lowered by 6%Provider revenue increased

by 5-10% through

value-based rewards

ACOs: THRESHOLD FOR ADVANCED APMs

Certain ACO models—Shared Savings Program Tracks 1+, 2 and 3—meet the

minimum criteria for an Advanced APM and can therefore be a good starting point

for physicians who choose the Advanced APM option. The models are similar, but

Track 3 raises the bar with greater risk and greater financial incentives. Track 1, on

the other hand, does not qualify as an Advanced APM but is also not subject to

CMS penalties.

ACOs are groups of doctors and other healthcare providers who formally join

together to provide coordinated, high-quality care to their Medicare patients—

and to share in the savings they achieve for Medicare.

A well-designed ACO can be highly successful for both patients and

physicians. Indeed, doctors will likely realize cost savings through the ACO’s

operational efficiencies, in addition to earning incentive payments from

CMS. For instance, care coordination helps reduce redundant services

and avoidable hospitalizations.

Clinicians must meet either payment or patient requirements:

Requirements for Incentive Payments to Clinicians for Participation in Advanced APMs*

C O N T I N U U M H E A LT H | 1 0

Reporting Year

Payment Year

Minimum percentage of payments through

Advanced APM

Minimum percentage of patients through Advanced APM

2017 2019 25% 20%

2018 2020 25% 20%

2019 2021 50% 35%

2020 2022 50% 35%

2021 2023 75% 50%

2022+ 2024+ 75% 50%

*Different minimums—including lower Medicare thresholds—apply to “Other Payer” and “All-Payer” Advanced

APM models

ACOs: Threshold for Advanced APMs (continued)

An ACO and a medical home* (which is typically much smaller) share many of

the same features, and both increase quality and save healthcare dollars over

the long run:

n Planned coordination of chronic and preventive care

n Strong patient access and continuity of care

n Risk-stratified care management

n Coordination of care across providers

n High level of patient and caregiver engagement

n Shared decision-making

n Payment arrangements in addition to, or substituting for,

fee-for-service payments

*CMS has not yet defined the term “medical home.”

PUBLIC REPORTING & TRANSPARENCY

Physicians also need to be aware that their reported data will likely become

publicly available at some point. CMS plans to post results of its Quality Payment

Program (QPP)—for both MIPS and Advanced APM tracks—at the Physician

Compare website (medicare.gov/physiciancompare).

This may include:

n Names of clinicians who participate in Advanced APMs

n Names and performance of Advanced APMs

n MIPS scores for clinicians, including aggregate and individual scores for

each performance category

Doctors should consider this transparency when determining which path to take

and how quickly to move from MIPS to the Advanced APM track.

C O N T I N U U M H E A LT H | 1 1

HERE ARE SOME TIPS TO GET STARTED:

n Focus on quality. Make sure you have the nuts and bolts of quality programs

in place. Strategies include proactive gap closure at the point of care, care

coordination, enhanced patient access, strong patient engagement, and referral

management (making referrals to like-minded, value-oriented providers).

n Continue to pursue MIPS quality measures. The effective use of electronic health

records will also remain a key contributor to quality, although it is reported under

the Advancing Care Information (ACI) component of MIPS. ACI (which has

replaced Meaningful Use) accounts for 25% of a provider’s MIPS score.

n Educate yourself about QPP and its two tracks (MIPS and Advanced APMs).

Read up on the changes, or reach out to a knowledgeable advisor.

What should physicians do now? DOCTORS MUST PREPARE RIGHT AWAY

FOR THESE CHANGES, OR RISK BEING LEFT BEHIND. HOWEVER, THEY DON’T NEED TO DO

EVERYTHING AT ONCE. PRACTICES CAN CREATE A STEP-BY-STEP PLAN, WHICH THEY CAN

IMPLEMENT OVER TIME. A QUALIFIED ENABLEMENT COMPANY CAN PROVIDE INVALUABLE

ASSISTANCE IN THIS PROCESS.

Where to get help: THE RIGHT ENABLEMENT PARTNER CAN GUIDE YOU IN

THESE DECISIONS AND THEIR IMPLEMENTATION—AND KEEP UP WITH CMS’S EVOLVING

REGULATIONS AND REQUIREMENTS. AT CONTINUUM, WE ALSO HELP DESIGN VALUE-BASED

PAYMENT MODELS THAT MEET THE NEEDS OF BOTH PHYSICIAN ENTERPRISES AND THEIR

COMMERCIAL PAYERS.

In today’s

value-based

healthcare

landscape,

advanced payment is no

longer one-size-fits-all. Each

practice must determine the

path that will enable it to be

most successful—with rewards

based on high-quality care, wise

spending, and strong patient

satisfaction.

C O N T I N U U M H E A LT H | 1 2

ABOUT Continuum Health

As a physician enablement company, Continuum Health delivers managed

solutions to provider groups and aggregators, helping foster self-sufficiency

by maximizing fee-for-service payments, transitioning them to value-based

programs and preparing them for risk. Continuum also collaborates with payers

to help drive value-based adoption among providers and improve the health

outcomes of patients. The company optimizes performance through value-based

care, practice management services, revenue cycle management, and specialty

care solutions. Thousands of physicians, specialists and nurse practitioners caring

for millions of patients depend on Continuum’s business and clinical experts to

help achieve their goals. Learn more at www.continuumhealth.net.

Related white papers:

n Value-Based Care in Uncertain Times: Navigating the Quality Payment Program

n How Physicians Can Win in the New Healthcare Environment: Doctors Need to

Act Now – or Risk Losing Ground

Go to: https://www.continuumhealth.net/insights/white-papers/

Disclaimer: CMS rules and regulations are subject to change over time.

End Notes1 https://www.advisory.com/research/health-care-advisory-board/blogs/at-the-helm/ 2018/02/congress-macra

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ Value-Based-Programs/MACRA-MIPS-and-APMs/Initial-QP-supplemental-service-pay ments-fact-sheet-2017-.pdf

2 https://www.cms.gov/Medicare/Quality-Payment-Program/resource-library/QPP- Year-2-Final-Rule-Fact-Sheet.pdf - p. 18

General sources:

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ Value-Based-Programs/MACRA-MIPS-and-APMs/Initial-QP-supplemental-service- payments-fact-sheet-2017-.pdf

https://www.cms.gov/Medicare/Quality-Payment-Program/resource-library/QPP- Year-2-Final-Rule-Fact-Sheet.pdf

https://www.federalregister.gov/articles/2016/05/09/2016-10032/medicare-program- merit-based-incentive-payment-system-mips-and-alternative-payment-model-apm

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html? redirect =/ACO/

CMS. The Medicare Access & CHIP Reauthorization Act of 2015. Quality Payment Program slide deck.

CAPG. MACRA: Charting the Future of Physician Payment. August 27, 2015.

Continuum Health Alliance, LLC402 Lippincott DriveMarlton, NJ 08053856.782.3300www.continuumhealth.net

®