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Thursday, October 20, 2016

New Medicare Payment Rule Emphasizes Quality and Value of Health Care

Last week, the Center for Medicare & Medicaid Services released the final rule for the Quality Payment Program (also known as MACRA). This is the biggest change to how Medicare pays for services in decades and an important step in improving the quality and value of care. We’ll be digging into rule over the next couple of weeks, but here are our first impressions. 

We are generally pleased with the direction of the final rule. However, we plan to submit further comments urging CMS to:

  • Create more opportunities for robust consumer input into the development of payment models 
  • Ensure that what is required of providers in future years continues to drive quality improvement and increase value 

The final rule is generally similar to what CMS proposed earlier this year. In the final rule, CMS has eased some key requirements for providers, particularly in the first year, and given providers of Medicare services additional opportunities to participate in advanced alternative payment models (APMs).

The Good: More opportunities to participate in advanced alternative payment models

CMS responded to recommendations made by us and others to establish more opportunities for providers to participate in advanced APMs. These models move payments away from fee-for-service reimbursement, instead paying providers based on the quality and cost of care. 

APMs generally seek to improve the quality of care and reduce costs by:

  • Better coordinating a patient’s care 
  • Creating agreements among providers to share financial risk for the total cost of that care 

For example, because providers bear more of the risk for the costs of care under APMs, they might put additional emphasis and resources toward reducing unnecessary or low-value care. Or on improving planning for a patient’s discharge to reduce the chances of the patient being readmitted to the hospital. 

Under the new Quality Payment Program (QPP) ushered in by the rule, providers are given incentivizes to join certain types of APMs, called “advanced APMs,” through a 5 percent payment bonus. In the final rule, CMS announced it is creating new payment models that meet the requirements for advanced APMs and that they are considering allowing additional providers to apply to existing models that already meet the requirements. This would enable more providers to participate in advanced APMs and could help accelerate the movement toward a value-based health care system. 

Room for Improvement: Engaging patients and consumers 

Though we applaud CMS for providing these additional pathways for providers to adopt advanced APMs, the final rule misses key opportunities to ensure consumers’ voices are heard. In order for APMs to be successful at improving the quality of care, patients and consumers must have a say in their development. 

Requiring providers to take on additional financial risk isn’t enough to ensure that health care is truly coordinated and patient-centered. CMS should provide ample opportunities for patients and consumers to offer their input throughout the entire process—from the initial design of an APM through to its implementation. 

And these models should have to meet certain care delivery standards, including planned coordination of preventive and chronic care, shared decision-making, and patient and family engagement at all levels of care. Robust engagement with patients and consumers is especially important to ensure that these models meet the needs of vulnerable patients and that they are helping to reduce racial and ethnic health disparities. In our comments we will provide specific recommendations for how CMS can better engage patients and consumers.

Room for Improvement: Addressing the cost of care

In the final rule, CMS has established 2017 as a “transition year” to help providers successfully participate in the Quality Payment Program with a lower risk for financial penalties. As part of this transition year, providers who are not in an advanced APM will not be scored on their performance in the cost category, but we know that rising health care costs are significantly affecting consumers, including Medicare beneficiaries, through increasing premiums and out-of-pocket expenses. Holding providers accountable for the cost of care is necessary for improving the value of care and for ensuring consumers have access to health care they can afford.

Room for Improvement: Prioritizing quality measurement 

In addition to not evaluating providers on cost of care in 2017, the final rule eases many other requirements for providers who will be in the Merit-based Incentive Payment System (MIPS). In the first year MIPS providers can “pick their pace,” meaning they can choose to be evaluated on fewer quality measures or report for shorter periods of time without risking a financial penalty. 

CMS is also allowing far more providers than initially proposed to be exempt from MIPS, at least in the first year. Though we understand that reporting on these measures is new for some providers, we feel this is a missed opportunity to measure and improve the quality of care for all Medicare beneficiaries. In our comments we’ll be encouraging CMS to increase these requirements in future years. 

Over the next few weeks we’ll be looking at the final rule in greater detail and will be submitting formal comments in December. Stay tuned. 

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