MACRA, QPP, MIPS and APMs Rules of the Game

1. MACRA, QPP, MIPS and APMs Rules of the Game Make effective use of the 2017 and 2018 Transition Years

2. Mike E.C. Schmidt Director of Certification and Client Success at Eye Care Leaders  Mike leads the teams at Eye Care Leaders which focus on client success with MIPS and the related ONC Health IT Certification program. He brings more than 30 years of experience from the medical device software and healthcare IT field, including general management, marketing, software management, and software development positions in the ophthalmology, oncology and radiology fields, including at Carl Zeiss Meditec, Varian Associates, Siemens Medical Systems and Pacsgear. Mike also owned and led SES, a turnkey software development company focusing on high-risk applications. About Your Speaker  With the increased regulation, Mike has focused on MACRA, MIPS, Meaningful Use and other EHR related regulatory concerns. He has spoken at national conferences including at the User Group Conferences for Medflow, Integrity, Management Plus MD Office.  Mike received his bachelor’s degree in mathematics from the University of California at Berkeley and his master’s degree in mathematics from the University of Washington at Seattle. eyecareleaders.com

3.  The MIPS Challenge  Regulatory Update on the 2018 MIPS Proposed Rule  The MIPS 2017 & 2018 Transition Years  The MIPS Composite Performance Score  MIPS ACI Performance  MIPS Improvement Activities Performance  MIPS Quality Performance  MIPS APMs and Advanced APMs  Action Items and Summary Agenda eyecareleaders.com

4.  ”Merit-Based Incentive Payment System”  1 of 2 “tracks” of the “Quality Payment Program” (QPP)  ”Alternate Payment Models” (APMs) represent the other track  Created by MACRA, a law passed with bi- partisan support in 2015, nothing to do with the Affordable Care Act, and not going away  ”MIPS” is the most widely recognized acronym and is often misused to refer to the program as a whole  MIPS and specifically APMs are intended to rein in rising Medicare costs  MIPS represents a historic transition from the classic Fee-For-Service model to a “value- based” reimbursement model What is MIPS? eyecareleaders.com

5.  Instead of the provider specifying the fee to be paid…  … the payer will pay what they determine the services are worth!  The payer measures several categories of provider performance such as quality of care and cost of care  value-based reimbursement amounts are calculated in terms of payment adjustments relative to the FFS schedule, which will continue to exist  MACRA requires MIPS and its payment adjustments to be budget neutral  Congressional hopes for containing Medicare costs lie primarily with the APMs, which put increasing financial risk on the health care delivery organizations  Over time, Congress hopes to move increasing numbers of physicians from MIPS to APMs MIPS shifts power to the payer eyecareleaders.com

6. Adjustments by Practice Size Practice Size Physicians with Negative Payment Adjustment Physicians with Positive Payment Adjustment Solo 87% 12.9% 2-9 69.9% 29.8% The Challenge of MIPS 10-24 59.4% 40.3% 25-99 44.9% 54.5% 100+ 18.3% 81.3% Proposed Rule Table 64, CMS estimatees based on 2014 data  Small practices lack economy of scale to manage MIPS performance effectively  MIPS has disproportional effects on ambulatory specialties such as ophthalmology eyecareleaders.com

7.  90-day reporting for 2018 MIPS EHR and Improvement Activities ➢But keeps 2018 MIPS Quality reporting period at the full calendar year  Allows old 2014 Edition CEHRT for one more year ➢But awards 10 MIPS ACI bonus points for 2015 Edition CEHRT in 2018 ❖We recommend the upgrade to 2015 Edition CEHRT in 2017 as soon as it is available  Broadens the MIPS exclusion, from $30,000 to $90,000 Medicare reimbursements per provider per year ➢Dramatically affects optometrists: AOA estimates that all but 4000 optometrists nationwide will be able to exclude from MIPS  Declares 2018 as 2ndand final “transition year”  easier MIPS scoring than later years Regulatory Update: CMS June, 2017 Proposed Rule for 2018 MIPS (1 of 3) eyecareleaders.com

8.  Adds a 5-point small practice bonus, starting in 2018 ➢ group TIN with no more than 15 individual NPI numbers ➢ intended to counteract the “Table 64 issue” ➢ Larger practices should re-assess their group TIN structure  Reinstates critically missing EHR workflow exclusions, retroactive to 2017 ➢ Exclude from eRx measure if writing fewer than 100 prescriptions ➢ Exclude from “send summary of care” measure if referring / transitioning fewer than 100 patients ➢ Exclude from new “receive summary of care” measure in case of fewer than 100 new patients in the reporting period ➢ But Direct messaging capability is still part of the definition of “Base EHR” and required for CEHRT! ➢ With increased CMS auditing scrutiny, the practice must purchase a HISP license!  Reinstates hardship exclusion for use of CEHRT  available only to small practices, no more than 15 eligible clinicians (or to ones in rural or HPSA locations) ❖We do not recommend to plan a priori to take advantage of this, but it is a welcome safety valve in case of CEHRT implementation issues Regulatory Update: CMS June, 2017 Proposed Rule for 2018 MIPS (2 of 3) eyecareleaders.com

9.  Delays MIPS Cost of Care scoring until 2019  Extends transition year MIPS quality scoring rules ➢3-point floor for MIPS quality measure scores ➢Small practices earn the 3 points even if the data threshold is not met  Introduces “Improvement” component to MIPS Quality scoring ➢Nothing to do with Improvement Activities  Adds 11 new Improvement Activities all eligible for EHR bonus points ➢Sadly, none appear attractive for eye care  Modified scoring with more points for public health reporting measures ➢Eye care practices should sign up for syndromic surveillance reporting if their state PHA allows it  “Virtual Group” option for solo and small practices to cooperate for a joint MIPS submission and score ➢Contact Eye Care Leaders if you may be interested in having us facilitate this option for you Regulatory Update: CMS June, 2017 Proposed Rule for 2018 MIPS (3 of 3) eyecareleaders.com

10. 2017 & 2018 MIPS transition years will be far easier than 2016 MMU2 / PQRS / VM • CMS estimated that for 2017 MIPS: ➢ “At least 90% of MIPS eligible clinicians will receive a positive or neutral MIPS payment adjustment (for) the transition year, and that “at least 80% of clinicians in small and solo practices with 1-9 clinicians will receive a positive payment adjustment.” • ➢ The MIPS Transition Years: 2017 & 2018 If you do nothing, you will be penalized the full amount ➢ 4% for 2017; 5% for 2018 • To avoid a penalty, only need to report a single performance category • Quality, or • Improvement Activities, or • ACI (formerly called “Meaningful Use of Certified EHR Technology”) • Don’t let the easy rules lull you into a false sense of security ➢ If you only target 2017 and 2018, the gap with very large practices will only grow You would fail in later years It is time to plan and implement your long-term MIPS strategy now Take proper advantage of the Transition Years • ➢ ➢ ➢ eyecareleaders.com

11. MACRA requires payment adjustments to be budget- neutral ➢ Positive adjustments are subject to a “Scaling Factor” based on available funds from negative payment adjustments ➢ With over 90% of physicians expected to receive positive or neutral payment adjustments for 2017, the funds from negative payment adjustments are expected to be very small ➢ Physicians who will not bother with MIPS will be those planning to retire by 2019 or those who receive relatively low total Medicare reimbursements, further limiting the available funds ➢ Expect positive adjustments earned for the 2017 performance year to be very small – maximum possible may be less than +0.8% ➢ Expect positive adjustments tfor the 2018 performance year not to be much larger – maximum possible may be less than +1% • Limited Positive Payment Adjustments Main positive incentive will be for an “exceptional performance bonus” ➢ Allocated from a $500M / Year fund not required to be budget- neutral ➢ Shared by all eligible clinicians who exceed a MIPS score above an exceptional performance threshold ➢ A MIPS score of 70+ in the transition years will earn this bonus • eyecareleaders.com

12. MIPS Payment Adjustments in the First 4 Years 2017 2018 2019 2020 QualityReporting 90 days Full year Full year Full year ACI &CPIA Reporting 90 days 90 days TBD Full year CEHRT Edition Required 2014 2015for higher score 2015 2015 MIPS Performance Threshold 3 15 Mean Mean MIPS Phase-In ExceptionalPerformance Threshold 70 70 Derived from PT Derived from PT Floor for MIPS Quality measures 3 3 0 0 QualityWeighting 60% 60% 30% 30% Cost Weighting 0% 0% 30% 30% Max.Negative Adjustment -4% -5% -7% -9% Max. PositiveAdjustment (Estimated) +0.8% +1% +7% +9% eyecareleaders.com

13. You have to learn the rules of the game. And then you have to play better than anyone else. Albert Einstein www.eyecareleaders.com

14. The MIPS Composite Performance Score eyecareleaders.com

15. Diagram Legend PT – Performance Threshold The mean or median of all MIPS composite scores for the performance year nationwide APT – Additional Performance Threshold The 1stquartile of MIPS composite scores above the PT or the MIPS composite score corresponding to the 1stquartile of participants above the PT 25% of PT 1st quartile of MIPS composite scores below the PT SF – Scaling Factor A factor calculated to ensure that MIPS payment adjustments stay budget neutral AAF – Additional Adjustment Factor Used to calculate the exceptional performance bonus budgeted for $500M total nationwide per year Participant “Grades” A – meets or exceeds the APT; receives a positive adjustment proportional to score plus an exceptional performance bonus B – exceeds the PT but is below the APT; receives a positive adjustment proportional to score, no exceptional performance bonus C –exactly at the PT; receives zero payment adjustment D – below the PT but above 25% of PT; receives a negative payment adjustment proportional to score F –in bottom 25% below PT; receives maximum negative payment adjustment www.eyecareleaders.com

16. Diagram Legend PT – Performance Threshold The mean or median of all MIPS composite scores for the performance year nationwide APT – Additional Performance Threshold The 1stquartile of MIPS composite scores above the PT or the MIPS composite score corresponding to the 1stquartile of participants above the PT 25% of PT 1st quartile of MIPS composite scores below the PT SF – Scaling Factor A factor calculated to ensure that MIPS payment adjustments stay budget neutral AAF – Additional Adjustment Factor Used to calculate the exceptional performance bonus budgeted for $500M total nationwide per year Participant “Grades” A – meets or exceeds the APT; receives a positive adjustment proportional to score plus an exceptional performance bonus B – exceeds the PT but is below the APT; receives a positive adjustment proportional to score, no exceptional performance bonus C –exactly at the PT; receives zero payment adjustment D – below the PT but above 25% of PT; receives a negative payment adjustment proportional to score F –in bottom 25% below PT; receives maximum negative payment adjustment www.eyecareleaders.com

17. MIPS Reimbursement: Every Performance Point Will Count 2016 (VM) Year 2017 & 2018 MIPS Transition Year Minimum reporting for one of: 1. Quality (PQRS) 2. Improvement Activities 3. ACI MIPS in 2019 & Later Years Description · Top 5% of Quality and/or Cost get + payment adjustment · Bottom 5% get - payment adjustment Payment adjustments depend linearly on performance: 1. Quality 2. Cost 3. Improvement Activities 4. ACI Will get a payment adjustment Most Providers Get no payment adjustment Very few Will avoid a negative payment adjustment Very small Payment Adjustment + Payment Adjustment - Depends on performance Very few Very few www.eyecareleaders.com

18. MIPS ACI (Advancing Care Information) Performance eyecareleaders.com