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MACRA final rule raises performance standards for 2019
Part B E/M coding, payment changes set for 2021
Detailing CMS's recently issued MACRA Final Rule. Updates and policy proposals for the Medicare Part B Physician Fee Schedule and the Quality Payment Program.
November 8, 2018 | Health care
On November 1, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a final rule detailing the payment updates and policy proposals for the Medicare Part B Physician Fee Schedule (PFS) and the Quality Payment Program (QPP) under the Medicare Access and CHIP Reauthorization Act (MACRA).
As CMS moves forward with implementation of MACRA, the agency is raising the performance thresholds under the Merit-based Incentive Payment System (MIPS) for 2019. As a result, a greater percentage of clinicians participating in MIPS will face larger negative payment adjustments in 2021, while a lesser percentage of clinicians will qualify for an additional positive payment adjustment for exceptional performance. The increase in the weight of the cost measure in MIPS may be an additional challenge for many clinicians, especially as they work to adapt to new performance measures including measures that focus on the efficiency of care delivery in eight episodes of care.
The final rule presents unique opportunities for health plans as the All Payer Combination Option begins on January 1, 2019, and CMS opens up the payer-initiated process for commercial and other private payers to submit payment models to CMS for qualification as an Other Payer Advanced APM for the 2020 performance year. In addition, CMS is moving forward with implementation of a demonstration project for Medicare Advantage organizations (MAOs) that incorporate certain risk-based payment arrangements into their contracts with clinicians.
For other health care stakeholders, the higher performance standards under MIPS and the move away from fee-for-service reimbursement will present opportunities to partner with clinicians on efforts to more effectively monitor and improve performance in the Cost and Quality performance categories.
The final rule also adopts notable changes to evaluation and management (E/M coding) under the PFS that could affect physician practices differently depending upon the average complexity of patients. Health care provider organizations may want to consider an analysis as to how the finalized workflow and payment changes might affect them before they are scheduled to take effect in 2021.
In addition, the final rule adopts a number of policies for Medicare Shared Savings Program (MSSP) ACOs, including a voluntary six-month extension for existing ACOs with participation agreements that end December 31, 2018. CMS is adopting this and other policies while it considers stakeholder comments submitted in response to a proposed rule that sought to overhaul MSSP ACOs and accelerate the move to down-side financial risk.
The final rule is scheduled to be published in the Federal Register on November 23, 2018.
Highlights of key provisions of the proposed rule are detailed below.
MACRA, which was enacted in April 2015, repealed the Sustainable Growth Rate (SGR) formula for updates to the Medicare Part B PFS and set payment updates for all years in the future. At the same time, MACRA created two new Part B payment tracks for clinicians to participate in the QPP:
- The Merit-based Incentive Payment System (MIPS), which provides positive or negative payment adjustments for clinicians whose practices are more closely tied to fee-for-service reimbursement; and
- Advanced alternative payment model (AAPM) for qualifying participants (QPs), which allows clinicians who have significant percentages of their practices in risk-bearing, coordinated care models to receive temporary financial bonuses and higher payment updates in the long-term.
Although 2019 will be the third performance year for the QPP, it is the first year that payment adjustments under MIPS will be applied to Medicare Part B payments to participating clinicians and the first year that other clinicians will receive QP incentive payments based on their participation in AAPMs. Additionally, for the first time performance information for clinicians participating in MIPS will be publicly available via the Medicare Physician Compare website.
Performance year 2019 under the QPP will dictate MIPS payment adjustments and eligibility for QP incentive payments for 2021. Under the statute, MIPS payment adjustments for 2021 can range from +/-7 percent.
Notably, the BBA narrowed the scope of MIPS payment adjustments, so that adjustments will apply only to covered professional services paid through the PFS, rather than to all items and services under Medicare Part B. As a result, MIPS payment adjustments will not be applied to payments for Part B drugs.
MIPS performance threshold for 2019
CMS finalized the MIPS performance threshold at 30 points for 2019, reflecting implementation of a provision of the BBA that provides flexibility to the HHS Secretary to set the MIPS threshold score at less than the mathematic mean of MIPS performance scores through performance year 2021.
The MIPS threshold score is the score between 0 and 100 points that CMS uses to determine which clinicians participating in MIPS will receive a negative, neutral or positive payment adjustment. For the 2017 and 2018 performance years, CMS set the threshold score at 3 points and 15 points, respectively, in an effort to limit the application of negative payment adjustments while MACRA’s QPP is implemented.
In addition, CMS originally proposed to set the additional performance threshold for exceptional performance score at 80 points for 2019, the final rule sets the threshold at 75 points—the midpoint between the threshold for the 2017 and 2018 performance years and the initial proposal for 2019. Clinicians whose MIPS performance scores meet or exceed the exceptional performance threshold will qualify for an additional payment adjustment.
The table below summarizes MIPS performance thresholds for performance years 2017 through 2019.
Additional performance threshold for exceptional performance
Statutory payment adjustment range
+/- 4 percent
+/- 5 percent
+/- 7 percent
Weight of MIPS performance categories in final score for 2019
For final MIPS performance scores for 2019, CMS will weigh each performance category as follows:
- Quality: 45 percent
- Cost: 15 percent
- Promoting Interoperability (PI; formerly Advancing Care Information): 25 percent
- Improvement Activities (IA): 15 percent
In 2019, CMS will allow clinicians to submit quality measures via multiple collection types (previously called submission mechanisms) and be scored on the data submission with the greatest number of measure achievement points. For the 2017 and 2018 performance years, CMS required clinicians participating in MIPS to submit quality measures via a single submission mechanism.
Available collection types are listed below.
- Electronic clinical quality measures (eCQMs)
- MIPS CQMs
- Quality Clinical Data Registry (QCDR) measures
- Part B claims measures
- The CMS web interface measures
- The CAHPS for MIPS survey measure
- Administrative claims measures
In addition, CMS adds four patient-reported outcome measures and seven high-priority measures to the available MIPS Quality measures. CMS also finalized changes to 23 measures and the removal of 26 existing quality measures.
In the proposed rule, CMS stated that the agency will continue to phase out topped out measures and to replace more process measures with outcome measure in future years.
CMS finalized a weight of 15 percent for the cost performance category for 2019, up from 10 percent in 2018. The weight of the cost performance category must increase to 30 percent by 2022, a three-year delay included in the BBA.
Performance in the cost category is measured using a retrospective analysis of claims across Medicare Part A and Part B and does not require additional reporting by clinicians. For 2019, the cost performance score will be based on performance in Medicare Spending per Beneficiary (MSPB), Total Per Capita Cost (TCPC), and eight new procedural episodes of care:
- Elective outpatient percutaneous intervention (PCI)
- Knee arthroplasty
- Revascularization for lower extremity chronic critical limb ischemia
- Routine cataract removal with intraocular lens (IOL) implantation
- Screening/surveillance colonoscopy
- Intracranial hemorrhage or cerebral infarction
- Simple pneumonia with hospitalization
- ST-elevation myocardial infarction (STEMI) with percutaneous intervention (PCI)
Procedural episodes of care will be attributed to each MIPS-eligible clinician who provides a trigger service, to be identified by HCPCS/CPT codes.
For acute inpatient medical condition episode groups beginning in the 2019 performance year, CMS will attribute episodes to each MIPS-eligible clinician who bills evaluation and management (E/M) claim lines during a trigger inpatient hospitalization under a tax identification number (TIN) that renders at least 30 percent of the inpatient E/M claim lines in that hospitalization.
MSPB is a measure initiated by an inpatient hospital admission, lasting from 3 days prior to the admission to 30 days after discharge from the hospital. The MSPB measure is attributed to the MIPS-eligible clinician who submitted the plurality of claims for Part B services for an index hospital admission.
TCPC is a measure of the total cost of care for an attributed individual beneficiary across Medicare Parts A and B for a calendar year. A beneficiary is attributed to a MIPS-eligible clinician’s tax identification number/National Provider Identifier (TIN/NPI) combination if a beneficiary received more primary care services (PCS) from primary care physicians (PCPs), nurse practitioners (NPs), physician assistants (PAs), and clinical nurse specialists (CNSs) in that TIN-NPI than in any other TIN-NPI or CMS Certification Number (CCN).
Promoting interoperability (PI)
Over the past year, CMS has undertaken an overhaul of the Electronic Health Record (EHR) Meaningful Use program for providers, rebranding it as promoting interoperability. Subsequently, the Meaningful Use MIPS performance category also was renamed promoting interoperability (PI).
Most notably, CMS finalized a provision requiring clinicians to use 2015 Edition Certified Electronic Health Record Technology (CEHRT) for 2019.
Under PI, MIPS practitioners report on a series of electronic clinical quality measures (eCQMs). For 2019, CMS proposes to align the MIPS eCQMs with those used for the Medicaid version of the PI program in an effort to reduce overall complexity.
In addition, the final rule establishes a new methodology to score each MIPS eCQM individually and then add them together to receive up to 100 possible points (weighted to account for 25 percent of the MIPS composite score in 2019).
Improvement activities (IA)
IA will remain unchanged, accounting for 15 percent of the MIPS composite score in performance year three. Clinicians do not need to report more than four activities—four medium or two high-weighted activities—to receive full credit for IA for the 2019 performance period. This is the same standard used for the 2018 performance period.
Of the overall list of activities for clinicians to choose from, CMS added six new improvement activities, removed one existing activity, and modified five activities.
In prior rulemaking, the IA performance category had a PI bonus score. With the changes to the PI performance category, CMS finalized removing that bonus in the 2019 scoring.
Public reporting via physician compare
The performance year three standards for public reporting on physician compare will remain largely unchanged from performance year two. Public reporting will continue to use the Achievable Benchmark of Care (ABC™) methodology to set the terms for measuring quality, cost, improvement activities, and promoting interoperability. The benchmark drives a five-star rating for each measure.
For both the quality and cost performance categories, CMS finalized a policy that newly introduced measures will not be publicly reported for the first two years after a measure is introduced.
For the PI category, CMS will only include an indicator for “successful” performance as opposed to “high” or “successful” indicators in year two.
Facility-based scoring methodology
CMS will implement facility-based scoring for the quality and cost MIPS performance categories for clinicians who furnish 75 percent or more of their services in an inpatient or on-campus outpatient hospital setting. This scoring methodology will utilize the measures and benchmarks adopted under the Hospital Value-Based Purchasing (VBP) program to assign MIPS scores.
A facility-based clinician will be attributed to the hospital where they provide services to the greatest number of Medicare beneficiaries.
MIPS eligibility changes
Under the final rule for 2019, CMS will add a third criterion for the low-volume threshold based on the number of covered professional services provided in a performance period. Thus, clinicians may be exempted from MIPS participation if they:
- Billed no more than $90,000 in Medicare Part B charges
- Provided care to no more than 200 Medicare Part B beneficiaries
- Provide no more than 200 professional services under the PFS
As part of this additional low-volume threshold evaluation, CMS will allow clinicians to opt in to MIPS participation as long as they meet at least one, but not all three of the low-volume threshold criteria.
Additional MIPS-eligible clinicians
Beginning in 2019, CMS makes additional categories of clinicians eligible to participate in MIPS. The additional categories are further expanded from the proposed rule to include:
- Physical therapists
- Occupational therapists
- Qualified speech-language pathologists
- Qualified audiologists
- Clinical psychologists
- Registered dietitian or nutrition professionals
After public comment solicited in the proposed rule, CMS declined to add certified nurse-midwives to the list of MIPS-eligible clinicians.
Each of the clinician categories made eligible to participate in MIPS in 2019 currently is eligible to participate in a Medicare AAPM.
To be considered QPs in Advanced APMs (AAPMs) for payment year 2021 under the Medicare-only Option, clinicians in the 2019 performance period must receive at least 50 percent of Medicare Part B payments, or see at least 35 percent of Medicare Part B beneficiaries through a Medicare AAPM.
Beginning with the 2019 performance period, MACRA also provides for the All-Payer Combination Option. Clinicians can achieve QP status if they receive at least 50 percent of payments from all payers, or see at least 35 percent of patients through a combination of Medicare AAPMs and Other Payer APMs. For the payment standard, at least 25 percent of Medicare Part B payments will have to come through Medicare AAPMs. For the patient count standard, at least 20 percent of Medicare Part B beneficiaries will have to be seen through a Medicare AAPM.
Revenue-based financial risk standard
The final rule maintains the revenue-based nominal amount standard for financial risk at 8 percent of the average estimated revenue from Parts A and B for providers in participating Medicare AAPM entities through performance year 2024.
For the All Payer Combination Option, the final rule maintains the revenue-based nominal amount standard for financial risk at 8 percent of total combined revenues from the payer of providers and suppliers in participating APM entities through performance year 2024.
Advanced APM quality measures
AAPMs are required to include quality measures that are substantively comparable to those reported under MIPS. The 2019 final rule provides for quality measures for Medicare AAPMs and Other Payer Advanced APMs to be considered MIPS comparable if the measure is:
- From the MIPS final list
- Endorsed by a consensus-based entity
- Otherwise determined to be evidence-based, reliable and valid by CMS
The final rule also allows additional measures that are determined to be “evidence-based, reliable, and valid by CMS” for the 2020 performance year.
Certified electronic health record technology (CEHRT)
CMS finalized its proposal to increase the minimum CEHRT use threshold for Medicare AAPMs and Other Payer AAPMs from 50 percent in 2019 to 75 percent beginning on January 1, 2020. The new threshold standard will require at least 75 percent of eligible clinicians in an AAPM entity to use CEHRT to document and communicate clinical care with patients and other health care professionals.
Under the All-Payer Combination Option, the final rule permits either payers or eligible clinicians to submit evidence on the use of CEHRT.
Payer-initiated process for the 2020 QP performance period
Under the final rule for 2019, commercial and other private payers will be permitted to submit payment arrangements to CMS for qualification as an Other Payer Advanced APM for the 2020 performance year. For the 2019 performance year, only Medicare Advantage organizations, state Medicaid programs, and multi-payer models operating under the Center for Medicare and Medicaid Innovation (CMMI) were permitted to submit payment arrangements to CMS via the payer-initiated process.
In addition, the final rule provides a streamlined certification process for future years for Other Payer Advanced APMs that participated in previous years, rather than being required to resubmit all documentation for CMS review on an annual basis.
Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) demonstration
The final rule moves ahead with a demonstration project that exempts clinicians from MIPS if they “participate to a sufficient degree” in Qualifying Payment Arrangements with Medicare Advantage organizations (MAOs). The demonstration will test whether exempting clinicians from the MIPS reporting requirements and payment adjustments drives greater participation in payment arrangements similar to Medicare AAPMs with MAOs and change clinicians’ care delivery.
The demonstration will apply requirements for Qualifying Payment Arrangements that are consistent with the criteria for Other Payer APMs. In addition, the final rule applies the combined thresholds for Medicare payments or patients to Qualifying Payment Arrangements with MAOs and CMS Advanced APMs (e.g., 25 percent of payments for the 2017 and 2018 performance years, 50 percent of payments for the 2019 and 2020 performance years). Importantly, the rule states that the MAQI demonstration project will use aggregate participation in CMS Advanced APMs and Qualifying Payment Arrangements, without applying a specific minimum participation threshold in either type of payment arrangement.
The demonstration project begins with 2018 performance data and will run for five years.
QP determination at Tax Identification Number (TIN) level
Beginning in 2019, CMS will allow for QP determinations under the All-Payer Combination Option to be requested at the TIN level, in addition to the APM entity level and individual level. CMS made this change based on feedback about how commercial and non-Medicare contracts are executed.
Part B physician fee schedule
The final rule also addresses changes to the Medicare Part B physician fee schedule and other Medicare Part B payment policies, including the addition of new codes for telemedicine and other technology-based services and changes to evaluation and management (E/M) coding requirements.
The overall update to the Part B PFS for 2019 will be +0.25 percent, implementing a provision of the BBA that reduced the payment update from the 0.5 percent update included in the MACRA statute.
E/M coding is the process by which Medicare billers and coders translate the patient visit experience into the information needed by Medicare to appropriately reimburse for those visits. E/M codes distinguish visits based on the level of complexity, site of service, and whether the patient is new or established. Almost every specialty has E/M visits, but they represent a larger portion of the total allowed services for clinicians such as primary care providers and specialist offices who do not routinely perform medical procedures or diagnostic testing.
The 2019 PFS final rule moved forward with several proposals intended to reduce administrative burden and improve payment adequacy within office and outpatient visits beginning January 1, 2019, including:
- Allowing practitioners to use the existing framework of applying the current 1995 or 1997 E/M documentation guidelines, or choose instead to document E/M visits using medical decision-making or time
- Expanding current options by allowing practitioners to use time as the governing factor in selecting visit level and documenting the E/M visit, regardless of whether counseling or care coordination are the primary uses of the visit
- Expanding current options for documenting the patient history and exam, making it possible for practitioners to focus their documentation on what has or has not changed since the last visit, rather than re-documenting information
- Allowing practitioners to simply review and verify certain information in the medical record that is entered by ancillary staff or the beneficiary, rather than personally re-entering it
CMS originally proposed adopting a single blended payment rate for new and established patients for office/outpatient E/M visit levels two through five beginning January 1, 2019, explaining the agency’s view that “allowing practitioners to choose the most appropriate basis for distinguishing among the levels of E/M visits and applying a minimum documentation requirement, together with reducing the payment variation among E/M visit levels, would significantly reduce administrative burden for practitioners, and would avoid the current need to make coding and documentation decisions based on codes and documentation guidelines that are not a good fit with current medical practice.” CMS also proposed a series of add-on codes “to reflect resources involved in furnishing primary care and non-procedural specialty generally recognized services.”
After receiving extensive public comment on the timeframe and the scope of the E/M changes, CMS finalized a hybrid approach to changes in E/M procedure. Beginning in 2021, CMS will adopt a single blended rate for visits levels two through four. Level five visits will retain a separate reimbursement rate. The single blended rate will generally exceed current rates for visits Levels two and three but will be less than the current rate for Level four visits.
For 2019 and 2020, the current coding and payment structure remains in place, meaning that practitioners should continue to use either the 1995 or 1997 versions of the E/M guidelines, noting the documentation changes that are intended to reduce redundancy.
CMS also opted not to finalize three other aspects of the proposal:
- Reduced payment when E/M office/outpatient visits are furnished on the same day as procedures
- Separate coding and payment for podiatric E/M visits
- Standardizing the allocation of practice expense RVUs for the codes that describe these services
Practice expense (PE): Market-based supply and equipment pricing update
CMS is finalizing a proposal to adopt updated direct PE input prices for supplies and equipment based on a market research study that CMS worked with a contractor to undertake. CMS is finalizing refinements to certain items based on public comment.
The use of the new PE input prices will be implemented over a four-year period beginning in 2019.
Medicare Shared Savings Program (MSSP)
While CMS considers comments submitted in response to a proposed rule outlining changes to MSSP ACOs, CMS is using the Part B final rule to finalize several polices. CMS is finalizing:
- A voluntary six-month extension for existing ACOs whose participation agreements expire on December 31, 2018, as well as the methodology for determining financial and quality performance for this six-month performance year from January 1, 2019, through June 30, 2019
- A policy that allows beneficiaries who voluntarily align to nurse practitioner, physician assistant, certified nurse specialist, or a physician with a specialty not used in assignment to be prospectively assigned to an ACO if the clinician they align with participating in an ACO (as provided for in the BBA of 2018)
- Revisions to the definition of primary care services used in beneficiary assignment
- Relief for ACOs and their clinicians affected by extreme and uncontrollable circumstances in 2018 (e.g., hurricanes, wild fires) and subsequent years
The final rule also reduces the number of measures ACOs are required to report on to 23 from 31.
Communication technology-based services
Under Medicare statute, telehealth services must ordinarily correspond to a service that can be furnished in-person, but are instead furnished using interactive, real-time technology. Telehealth services are subject to several statutory provisions affecting geography, and the origin of the service request.
In recent years, CMS has sought public comment on how best to expand the use of telehealth within current law, as well as other potential uses of other communication technology. The 2019 PFS final rule establishes several new services performed through communication technology that are not subject to the requirements that Medicare telehealth services encounter, and will be reimbursed in the same manner as other physician services on the fee schedule. Services with new reimbursement codes include:
- Interprofessional consultations via the Internet and other communications methods
- Brief communication technology-based service, including activities like “virtual check-ins” that work with a patient to evaluate whether an office visit or other service is needed
- Remote evaluation of pre-recorded patient information, providing for a separate Medicare payment when a physician uses recorded video or images taken by the patient themselves in order to evaluate their condition
In addition, CMS finalized payment for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) for communication technology-based services and remote evaluation services that are furnished by an RHC or FQHC practitioner when there is no associated billable visit.
The final rule adds reimbursement codes for prolonged preventive services to the list of telehealth codes eligible for Medicare reimbursement. The rule also makes changes to telehealth coding to allow for greater home-based management of End-Stage Renal Disease (ESRD) and acute stroke, implementing provisions of the BBA.
Functional status reporting (FSR)
With the elimination of Medicare therapy caps under the BBA, CMS will eliminate the FSR requirement for outpatient therapy beginning in 2019.
Outpatient physical therapy (PT) and occupational therapy
CMS finalized a new payment modifier for outpatient physical therapy (PT) and occupational therapy (OT) furnished by therapy assistants. This modifier is in preparation for a scheduled payment reduction in 2022. The modifiers will not be required on claims until 2020.
Changes to Part B drug payments
By law, payments for most Part B drugs are based on average sales price (ASP), plus a 6 percent add on payment. Drugs such as single-source products, or recently launched drugs do not have ASP data, and are instead paid the wholesale acquisition cost (WAC), plus 6 percent. WAC prices do not include the discounts that are part of an ASP, meaning that a WAC-based payment amount for the same drug will typically be significantly higher.
The final rule lowers the add-on amount for WAC payments to 3 percent. This payment reduction was included in the president’s FY 2019 budget, and other proposals from the administration to change the pricing incentive structure for drugs.
Off-campus provider based hospital department payments
For 2019, CMS will hold payments at 40 percent of the outpatient prospective payment system (OPPS) rates for newly formed or “non-excepted” off-campus provider-based hospital departments (HOPDs).
Clinical laboratory fee schedules
CMS changed the clinical laboratory fee schedules (CLFS) to account for MA payments in the definition of “applicable laboratory,” in order for additional laboratories that serve a high proportion of MA enrollees to reach the Medicare revenue thresholds needed to be considered an applicable laboratory and therefore report data to CMS.
Ambulance fee schedules
The ambulance fee schedule (AFS) reflects the extension of temporary add-on payments for ground ambulance services that the BBA of 2018 reauthorized for five years. The add-on payments grant a 3 percent increase for ground ambulances in rural areas, 2 percent in urban areas, and a 22.6 percent “super rural” bonus increase for transports that originated in an area at or below the lowest 25th percentile of all rural populations by population density.
The BBA also increased the reduction from 10 percent to 23 percent for payments for non-emergency basic life support transports of beneficiaries with ESRD for renal dialysis services.
Substance use disorders
In its ongoing response to the opioid crisis, CMS solicited comments in the proposed rule on creating a bundled episode of care for management and consulting treatment for substance use disorders (SUDs). CMS sought information on whether a bundled episode-based payment would help improve access, quality, and efficiency for SUD treatment.
CMS also sought comment on coding and payment for a bundled episode of care for treatment for SUDs that could include overall treatment management, counseling, and components of a MAT program such as treatment planning, medication management, and observation of drug dosing.
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Medicare Access and CHIP Reauthorization Act of 2015
Significant changes to part B coding requirements