This Week – September 24, 2016
This Week in Washington, D.C.
- ACG Call to Action for Michigan Members: Support ACG’s Efforts to Eliminate MOC Requirements in Michigan
- MACRA Tidbit for the Week: MACRA’s Advanced APMs & Recent Data on Medicare ACOs
From ACG’s Governor for Michigan, James M. Scheiman, MD, FACG
ACG Call to Action for Michigan Members: Support ACG’s Efforts to Eliminate MOC Requirements in Michigan
ACG has partnered with the Michigan State Medical Society to advocate for two bills currently before the state legislature. These bills would prevent hospitals and insurers from requiring MOC as a condition for licensure, hospital privileges, and payment. These bills do not prevent physicians from participating in MOC to help meet required continuing education hours, should they choose to do so. ACG urges its Michigan members to get involved by following these easy steps:
- Sign the online petition
- Contact your State Senator and urge them to support these bills
- Contact your State Representative and urge them to support these bills
House Bill 5090/Senate Bill 609 would clarify that a physician does not need to maintain a national or regional certification before receiving a Michigan license or admitting privileges in a hospital.
House Bill 5091/Senate Bill 608 would provide that an insurance company or health maintenance organization (HMO) may not require a physician to maintain a national or regional certification before paying or reimbursing a claim.
The Bills’ Sponsors & more: Please click here to read the full blog.
MACRA’s Advanced APMs & Recent Data on Medicare ACOs
MACRA creates an incentive program to encourage participation in “Advanced alternative payment models (APMs)” if providers do not want to participate in modified fee-for-service (or “MIPS”). Both CMS and many members in Congress view the APM and transition away from fee-for-service as a move towards the path of not only reducing programmatic costs, but also improving the quality of care for the patients. MACRA does NOT change how any particular APM functions. Instead, it creates extra bonuses and eligibility requirements for APM participants to receive these financial incentives.
What is an example of an Advanced APM? In this proposed regulation, CMS includes a list of payment models that would be considered an “Advanced APM.” These include Medicare ACOs and primary care/other medical home models. Each of these models have different rules, but share the same basic theme: APM participants share the responsibility and risk in providing care to meet certain quality and financial targets.
APM participants will receive a bonus if the entity meets these quality and financial goals from 2019 – 2024, with a 5% bonus in annual Medicare professional fees. In 2025, there is a 0% APM update, followed by a 0.75% APM annual update in 2026 and beyond. There are various eligibility requirements to become an “Advanced APM” participant. CMS proposes that a percentage of APM participants use certified EHR technology, participants report quality measures comparable to MIPS, and APM participants to meet certain Medicare payment and patient volume requirements. What does this mean? APMs also must “bear more than a nominal amount of risk for monetary losses.” The financial risk must be over a certain percentage of actual expenditures when compared to targeted or expected expenditures. In short, the APM must assume responsibility for the losses once actual spending reaches 4% or above expected expenditures. The APM must then pay CMS at least 30% of those losses. However, the maximum amount an APM can be penalized is 4% of total expected expenditures.
Some policy wonks, including the Medicare Payment Advisory Commission, have noted that this 5% bonus may not do much to incentivize cost savings. Remember, from 2019-2024, qualifying APM participants automatically get a 5% bonus based on the previous year’s claims, but the APM’s loss is capped at 4% of expected costs. Thus, if you choose to participate in one of these Advanced APMs, the worst case scenario could be that APM participants still get a +1% bonus in 2019-2024. Will CMS change this proposal in the final rule? We will soon find out. The final rule is expected by November 1, 2016.
But be careful before signing up– this proposed 5% APM bonus stops in 2025. CMS will also continue to adjust the financial savings “benchmark” target rates each year. This is important.
As noted in a recent review of Medicare ACO data, the benchmark matters. In 2013, bonus payments exceeded aggregate spending reductions, constituting a net loss of $73.5 million to Medicare. In 2014, aggregate spending reductions exceeded bonus payments, constituting a net savings of $287 million to Medicare. Then, in 2015, Medicare ACOs had a gross savings of $429 million, but CMS paid $646 million in shared savings bonus payments to high performing ACOs, leading to a net loss of $217 million (note: article says $216 million). Therefore, a higher per beneficiary “target rate” is crucial to success and receiving a bonus. However, how long will CMS continue to lose money by promoting ACOs? Many ACOs will soon have to transition into more risk-based models. That will help save Medicare costs in the future. Still, it is difficult to guess how high or low the Agency is willing to go when setting annual targeted expenditures.
Additional Food for Thought: While quality improved, the differential in “quality scores” between successful and underperforming ACOs remain modest. However, studies note that physician-led and smaller ACOs have continued to perform better on average than their larger counterparts.
More on MACRA: ACG Hopes to Keep This Simple. We compiled a detailed overview for you, hopefully in a simplified fashion and in plain English. Read the summary and potential impact to GI: Making $ense of MACRA
The 2016 ACG Annual Scientific Meeting and Postgraduate Course will also delve into the details of these changes, as well as offer strategies and insight on how to adequately prepare your practice for these upcoming changes.