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Quality & Governance News

SGR Fix to Simplify Quality Reporting, Value-Based Payments

- In an annual battle that has flared up every spring since 1997, Congress is once again considering the repeal and replacement of the Medicare sustainable growth rate (SGR), and this year’s potential legislation has significant impacts on CMS quality reporting programs and value-based payments.

Medicare Sustainable Growth Rate (SGR) Repeal

While this year’s version of the bill is unlikely to contain another surprise ICD-10 delay, legislation to permanently repeal the SGR has been deflected time and again, leaving healthcare stakeholders frustrated by the uncertainty and instability of the nation’s largest reimbursement system.

The latest temporary patch expires on March 31, 2015, giving lawmakers just a few more days to decide on an acceptable alternative to the flawed and failed payment metric.

In addition to preventing a 21 percent cut to Medicare reimbursements, the bi-partisan, bi-cameral bill currently under consideration would consolidate the three major quality reporting programs – the EHR Incentive Programs, the Physician Quality Reporting System (PQRS) and the Value-Based Modifier (VBM) into a single system that reduces conflicts and streamlines the reporting process.

Key features of the legislation under consideration would enact the following:

• Replace the SGR formula and remove the threat of payment cuts totaling more than 20 percent of Medicare reimbursements.  The law would also implement annual payment increases of .5 percent for the next five years.

• Incentivize the shift to alternative, value-based payment models by providing a 5 percent bonus to providers accruing significant reimbursements within the patient-centered medical home (PCMH) model or another alternative value-based payment model (APM).  To receive the bonus, providers will need to receive at least a quarter of their Medicare revenue through APM participation between 2018 and 2019, with the thresholds increasing over time.

• Develop clinically-driven quality care guidelines to measure successful participation in quality-based reimbursement programs and create a technical advisory committee to monitor the progress and success of physician-developed APMs.

• Increase access to Medicare data by upgrading available quality and utilization information on CMS’ Physician Compare website, allowing certain entities to engage in analytics to provide better clinical decision support and operational decision support to providers.  Approved clinical data registries would also be allowed to purchase and analyze deidentified Medicare claims data in pursuit of better patient safety and care quality.

• Allow current incentive program payments to expire at the end of 2018, including the 2 percent penalty for PQRS non-participation and the 3 to 5 percent negative payment adjustment for failing to meet meaningful use. Eliminating these penalties will keep more funding in the Medicare system for providers and increase possible investment in novel value-based payment structures.

The SGR repeal bill would also bring three of the industry’s major quality reporting programs under one roof, eliminating administrative redundancies that have plagued providers attempting to attest to multiple initiatives through different reporting frameworks at different times.  CMS has recently expanded options for one-time reporting for the PQRS and Value-Based Modifier programs, but the SGR bill would take that one step further by including meaningful use in a new unified program called the Merit-Based Incentive Payment System, or MIPS.

The MIPS program is intended to bring greater accountability to providers, who will be rewarded and penalized financially for care quality, care coordination, and evidence-based medicine.  Each year, the Department of Health and Human Services will publish updated quality metrics and measures to be used in the value-based payment program with input from healthcare stakeholders who may suggest relevant and useful quality metrics for inclusion in the program.

Participating providers will be given a performance score on a scale from 0 to 100 based on four domains including:

Clinical quality: Adherence and performance on the clinical quality measures developed by the Secretary of HHS will paint a portrait of patient outcomes, patient safety, consumer satisfaction, and ongoing care.  These metrics will be used in addition to existing frameworks provided by the PQRS, VBM, and meaningful use programs.

Resource utilization: The VBM program will form the basis for gauging provider resource utilization in an effort to reduce redundant services and provide high quality care while cutting wasteful spending.  CMS is currently developing additional benchmarks to promote bundled value-based payments or reimbursement for episodes of care, which have been successfully piloted by the industry so far.

Meaningful use: Providers participating in the EHR Incentive Programs will be required to report on all applicable meaningful use measures.  However, providers who report on quality measures through certified EHR technology for participation in MIPS will also be given credit for the clinical quality measures (CQMs) required by meaningful use.

Ongoing practice improvement: Providers will receive points towards their composite performance score for demonstrating a commitment to ongoing practice transformation and quality improvement, much like one of the requirements in the patient-centered medical home (PCMH) model.  Rule makers will develop a list of applicable activities for this component, which will consider provider input and be applicable to a wide variety of provider types.

Providers will be recognized for improvement over their own baseline, but may also receive negative payment adjustments for failing to meet established quality improvement goals.  Negative payment adjustments will increase over time from 4 percent in 2019 to a maximum of 9 percent in 2022.  Providers may receive positive adjustments, or incentive payments, of up to three times the cap for the negative payment adjustments each year.

The legislation requires HHS to make its first annual report on the development of quality measures by May 1, 2017, with $15 million in annual funding allotted between 2015 and 2019 for the task.

The bill also continues to stress the importance of EHR interoperability, requiring widespread data exchange by 2018 and mandating the decertification of EHR technology that actively blocks interoperability and data sharing, a provision that was also included in the 2015 omnibus budget appropriations bill.  The proposed Stage 3 meaningful use rule focuses heavily on achieving interoperability within the same time frame, illustrating a further alignment of initiatives across the healthcare industry.

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