A little over a year ago, Health and Human Services (HHS) secretary Sylvia Burwell announced the goal of tying 30% of payments to quality or value by the end of 2016 . This March, the Centers for Medicaid and Medicare Services (CMS) announced that they had achieved that goal– nearly one year ahead of schedule . CMS attributed the success to a jump in the number of new accountable care organizations (ACOs) and increasing participation of providers in alternative payment models like medical homes and bundled payments. The next milestone of 50% by 2018 is now looking more like an inevitable reality as CMS becomes more aggressive with the shift to value-based care. Mandatory programs like the bundled payment program for hip and knee replacement (known as CCJR) are a sign of the times to come as CMS continues to accelerate the shift towards value-based care.
Much of the framework guiding CMS’ new aggressive push towards value based care is an important piece of legislation signed into law last April by President Obama . The legislation, known as the Medicare Access and CHIP Reauthorization Act, is commonly referred to as MACRA. MACRA codifies how CMS will drive payments based on the quality of care delivered rather than the volume of services (e.g. procedures, visits, tests) provided. MACRA creates a new Merit-Based Incentive Payment System (MIPS) which combines the Physician Quality Reporting System (PQRS), Meaningful Use (MU) EHR incentive program, and Physician Value-Based Modifier into a single payment adjustment. Although MIPS will not directly impact payments 2019, it might just be the law that makes or breaks providers.
Breaking down MIPS
MIPS measure providers in four performance categories: (1) Quality (2) Resource Use (3) EHR Meaningful Use and (4) Clinical Practice Improvement Activities (CPIA). The MIPS quality measurement score continues to mandate PQRS reporting but will use an expanded list of quality measures. CPIA is potentially a powerful idea that assesses physicians in categories like population management, care coordination, practice assessment and steps taken to expedite future participation in alternative payment models. Interestingly, measurements of efficient resource utilization will triple in importance over the first three years of MIPS (from 10% to 30% weighting in the MIPS formula), signaling an added focus by CMS on the elimination of wasteful practices and procedures. See below for weights in the respective four categories.
An Alternative to MIPS is Available: The Alternative Payment Models Track
MACRA stipulates that providers may opt out of MIPS if they participate in an “Alternative Payment Models” (APMs) which can include a number of options including Multi-Physician bundled payments, episode-based payments and condition-based payments. Between 2019 to 2024, APM participating providers will be eligible to receive a 5% annual lump sum bonus on the physician’s fee schedule payments. To qualify, however, providers must meet increasing thresholds for the percentage of their revenue they receive through qualifying APMs.
What should physicians do now?
Embrace Individual Performance Data and Transparency: The new MIPS system will focus on giving a single score to each individual physician. All MIPS scores and individual category scores will be posted on the CMS Physician Compare website. The posted scores will show where providers fall in the distribution of their peers across the country.
Health systems and physician groups, who understand the implication of MIPS, will need to start thinking of efficient ways to measure individual performance data today and prepare their physicians to succeed under the new rules. Under PQRS, groups that did not report data only stood to lose two percent of their revenue. Under MIPS, however, that potential lose could jump to nine percent, depending on how well they score in the four performance categories. On the other hand, physicians who score extremely high, will also be eligible for a 27% payment bonus over a three year period under MIPS . Physicians will not only need to get used to getting measured but also having their performance available to consumers as CMS moves towards using transparency to improve performance.
What should hospitals do now?
Prepare their Providers for Culture Change (A Shift Towards Value-Based Care): Some components of MIPS, such as PQRS, already support elements of group performance reporting to CMS. However, as mentioned previously, most of the quality measures are collected on an individual basis. Hospitals will need to better understand how individual performance of docs is affecting the group and will need to foster a collective culture shift towards measurement and value-based-care. These strategies should focus on specific opportunities for improvement and delivered in a way that is non-threatening, while emphasizing the consequences of falling behind on the road to value based care. Providers are already overwhelmed with existing compliance burdens and MACRA should be presented as a piece of legislation put in place to facilitate the move towards value based care.
A simple approach to system engineering for quality are simulations. The Agency for Healthcare Research and Quality (AHRQ), through the consulting firm, Mathematica, concluded the same . AHRQ sought a reliable measure of care-process that could be conducted across groups of providers which could serve as important feedback on performance. AHRQ’s conclusion was that simulations, similar to the validation work QURE has conducted, is the best available, most robust option for engaging providers and identifying variation.
With the passage of MACRA, the federal government has made it clear that the move to value-based care will proceed at an even faster pace. At the same time, CMS is demonstrating a continued willingness to work with providers to achieve these goals using multiple approaches as they seek the best way to pay for and deliver value-based care. One of the key messages from HHS is that it intends to make traditional, volume-based fee for service payment less profitable and more challenging. Providers who embrace value-based payment early and develop a culture of transparency, accountability and adherence to evidence-based guidelines stand a much better chance of thriving through this transition. Health care systems and physician organizations need to tools to prepare their physicians for these changes, and MACRA and MIPS only accentuates this need. QURE’s innovative CPV physician engagement platform has been designed and validated to change physician behavior, improve quality and reduce costs. If your organization needs help preparing your physicians for success, let’s set up a conversation to discuss how QURE can help standardize and elevate your clinical practice.
On April 1, mandatory bundled payments arrived in orthopedics for lower-extremity joint replacement (LEJR). The Comprehensive Care for Joint Replacement (CCJR) bundled payment program is the first of its kind but there is every indication that CMS will use similar compulsory models in other clinical areas very soon. Understanding and adapting to CCJR will prepare you for these future changes to come. The question, then, is what is the best way to respond?
The CCJR bundle mandates that approximately 800 hospitals across the country assume financial risk for the cost and quality of a complete, 90-day episode of care. The episodes start on the first day of admission and extend through post-acute care for hip and knee LEJRs (MS-DRGs 469-470).
In other words – hospitals are now the payer. They are on the hook not only for the inpatient costs of care but also physician reimbursement and post-acute facility care in skilled nursing facilities, long-term care hospitals, rehabilitation centers and home health within that 90-day period. If hospitals can keep total costs under the target bundle reimbursement they ‘win,’ earning dollars for the difference; they can also add to the win and receive a bonus by earning quality-based performance payments. However, if costs exceed target bundle prices, these hospitals ‘lose’ and must pay CMS back the difference. With so many factors impacting success in CCJR, what are hospitals to do? The answer: engage physicians now and elevate the care they provide to this patient population.
The driving rationale behind CCJR and forthcoming bundled payment models is enhancing the VALUE in healthcare, i.e. providing the highest quality care at the lowest possible price. LEJRs are one of the most common and expensive surgeries incurred by Medicare beneficiaries and the variation in care and outcomes is well documented. For some hospitals, over half of LEJR costs are actually incurred after the patient leaves the hospital, in the post-acute setting. CCJR was designed to incentivize hospitals to work closely with their physicians to reduce the variation in how LEJRs are performed and improve post-procedure care and outcomes. In the LEJR care path, physicians have responsibility for developing best practices based on the evidence base, coordinating and managing several aspects of patient care during surgery and recovery, and ensuring their patients are discharged to an appropriate level of post-acute care.
Physician adherence to best practice standards greatly impacts post-surgical complications and LEJR bundled costs. According to the American Joint Replacement Registry, approximately 70% of LEJR surgical revisions occur within 3 months of the initial surgery, with infection and inflammation being the most common causes of readmission. There is readily-available guidance from the National Surgical Infection Prevention program (2004), Surgical Care Improvement Project (2006) and American Association of Hip and Knee Surgeons (2013) on pre-operative, prophylactic antibiotic infusion that can prevent these infections from occurring. Adherence to evidence-based medicine, however, is poor and the best guidance and protocols have minimal impact if they are not put into practice.
Thus, hospitals must engage their physicians and facilitate alignment around evidence-based pathways to make it under CCJR. QURE’s President, John Peabody, MD, PhD, in the webinar “Demonstrating Who You Are in CCJR: Data Describes the Problem, Providers Deliver the Solution” (accessible on the QURE website here: CCJR Webinar Link) outlined how to engage orthopedic surgeons in CCJR. QURE recommends an approach that ‘Elevates the Quality of Practice Standardization’ by:
- Measuring Clinical Practice through use of an easily accessible measurement tool, such as Clinical Performance and Value (CPV®) vignettes, to capture and analyze clinician behavior and practice from intake through post-acute treatment.
- Baseline measurements, which few institutions do in enough meaningful detail, enable targeted efforts to reduce specific areas of unnecessary variation that impact cost and quality the most.
- Instilling Accountability by serially assessing individual and group-level performance and improvement on targeting areas of variation.
- Provide transparent performance scores and incentivize with CME credits.
- Facilitating Physician Behavior Change with customized feedback, education on improvement opportunities, and performance comparisons to their actual peers.
- Group level discussions focused on care variation are among the most efficient ways to standardize practice.
Practice change doesn’t happen overnight. Hospitals will have to begin to lay the foundation for stronger provider engagement and practice changes in orthopedics to avoid CCJR penalties that will begin in one year. Additionally, the best hospitals will heed CJR as a clarion call to consider the changes required to engage physicians in the next targets for mandatory bundled payment (e.g. pneumonia, cardiology). Real cost-savings are only possible when physicians, the key providers of care, shift their practice towards evidence-based standards. In this scenario, hospitals, physicians AND patients win.