Could Last Week’s Proposed-Rule Release Represent an Inflection Point for CMS and for Value-Based Federal Payment?

July 18, 2018
CMS’s release of a proposed rule that will impact a range of issues, from physician payment to quality measures, has unleashed a range of reactions from industry leaders—could this prove to be an inflection point?

The release last Thursday of a proposed rule involving the Physician Fee Schedule and the Quality Payment Program under the Medicare program, by senior officials at the Centers for Medicare and Medicaid Services, was a very important development for physicians, hospitals, healthcare IT leaders, and others. As Managing Editor Rajiv Leventhal wrote in his breaking-news report on Thursday evening, “The Centers for Medicare & Medicaid Services (CMS) today proposed changes that the agency believes will ‘fundamentally improve the nation’s healthcare system and help restore the doctor-patient relationship by empowering clinicians to use their electronic health records (EHRs) to document clinically meaningful information.’ These changes, according to CMS, would increase the amount of time that doctors and other clinicians can spend with their patients by reducing the burden of paperwork that clinicians face when billing Medicare. The proposals, part of the Physician Fee Schedule (PFS) and the Quality Payment Program (QPP), would also modernize Medicare payment policies to promote access to virtual care, CMS said in a July 12 announcement.”

Leventhal further noted that “Such changes would establish Medicare payment for when beneficiaries connect with their doctor virtually using telemedicine to determine whether they need an in-person visit. Additionally, the QPP proposal, set to take place in year three of the program, in 2019, would make changes to quality reporting requirements to focus on measures that most significantly impact health outcomes, CMS said.”

Among other elements, “The proposed changes would also encourage information sharing among healthcare providers electronically. And, the QPP proposal would make changes to the Merit-based Incentive Payment System (MIPS) “Promoting Interoperability” performance category to support greater EHR interoperability and patient access to their health information, as well as to align this clinician program with the proposed new “Promoting Interoperability” program for hospitals, according to the announcement,” Leventhal noted. And he quoted CMS Administrator Seema Verma’s statement upon the release of the proposed rule that “Today’s proposals deliver on the pledge to put patients over paperwork by enabling doctors to spend more time with their patients. Physicians tell us they continue to struggle with excessive regulatory requirements and unnecessary paperwork that steal time from patient care. This Administration has listened and is taking action. The proposed changes to the Physician Fee Schedule and Quality Payment Program address those problems head-on, by streamlining documentation requirements to focus on patient care and by modernizing payment policies so seniors and others covered by Medicare can take advantage of the latest technologies to get the quality care they need,” Verma said last week.

Some key changes in the proposed rule include:

> Adjustments to the MIPS program such as the removal of 34 low-value measures, a proposal to add 10 new measures, an increase of the cost component calculation weight from 10 to 15 percent, and the doubling of the performance threshold to 30 points

> Major reforms to Evaluation and Management (E/M) payments including single blended payment rates for both new and established patients for office/outpatient E/M level 2 through 5 visits and a series of add-on codes to reflect resources involved in providing complex primary care and non-procedural services.

> Streamlining documentation requirements including eliminating the requirement to justify the medical necessity of a home visit in lieu of an office visit.

> Reduction of quality measures from 31 to 24 in the Medicare Shared Savings Program (MSSP) and additional focus on the measure set on more outcome-based measures, including patient experience of care. And

> Expansions to telehealth and virtual care reimbursement, including payment for virtual check-ins and evaluation of patient-submitted photos or recorded video and Medicare-covered telehealth services for prolonged preventative care.

Reactions from the field

Industry leaders have been quick to react. As Associate Editor Heather Landi reported in her article published this morning, “Many health IT industry groups, policy experts and other industry stakeholders continue to delve into the 1,473-page proposed rule released by the Centers for Medicare and Medicaid Services (CMS) on July 12 that provides updates to the Physician Fee Schedule and Quality Payment Program (QPP), which encapsulates the Medicare Incentive-based Payment Program (MIPS) and Advanced Payment Models.”

Reactions to different elements have gone in different directions, depending on the healthcare sector and leaders involved. As Landi noted, “The Ann Arbor, Mich.-based College of Healthcare Information Management Executives (CHIME) expressed support for CMS’s proposed rule. In a statement, Liz Johnson, R.N., CIO, acute hospitals and applied clinical informatics at Tenet Healthcare, who serves as the CHIME Public Policy Steering Committee Chair, said, ‘CMS is certainly heeding calls from the provider community to reduce administrative burdens. We support efforts to reduce these burdens on clinicians, whether they were created by paper or electronic processes, and to give physicians more time to care for patients. We also applaud the discussion of expanded telehealth reimbursement, something that has been a priority for CIOs, and we commend efforts to incent use of PDMPs (prescription drug monitoring programs) as we seek ways to leverage technology in our ongoing efforts to combat the nation’s opioid crisis.’”

Also, Don Crane, president of America’s Physician Groups (APG), said APG staff are still reviewing the proposed rules; but Crane stated that they are “cautiously optimistic that CMS has taken real action here to advance the value movement.” “Importantly, these rules include a re-affirmation of the recently announced Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration.”

But not everyone is feeling sanguine.  Chet Speed, vice president of public policy, at the Alexandra, Va.-based trade group AMGA (formerly the American Medical Group Association) said in a statement that, “In its proposed rule for the third year of the Quality Payment Program, CMS again is proposing policies that do not further the program’s intent and potential. Based on initial review of the proposal, AMGA is particularly disappointed that CMS kept a high low-volume threshold that will continue to reduce the payment adjustments for providers that are invested in value-based care.”

The proposed rule, Landi noted, maintains the low-volume threshold at $90,000 in Part B allowed charges or less than 200 Medicare patients. In year 1 of the QPP, CMS set clinicians’ low-volume threshold at $30,000 or less in Medicare Part B allowed charges or less than 100 Medicare patients and the agency increased the threshold in year 2. For the 2018 performance year, CMS estimated that about 60 percent of otherwise eligible clinicians were excluded from MIPS, although some clinicians are not subject to MIPS requirements due to participation in advanced APMs.

“When we think about MACRA (the Medicare Access and CHIP Reauthorization Act), when it was first passed, as a statute, it essentially represented Congress’ view about moving Medicare to value, and they essentially did that by putting payments at risk. If you look at the statute in 2017, your reimbursements were at risk plus-or-minus 4 percent, depending on how you did, and it goes all the way up to plus-or-minus 9 percent by 2023,” Speed emphasized.

Meanwhile, in an excellent podcast interview with Leventhal that took place shortly after the release of the proposed rule, Jeff Smith, vice president of public policy at the Bethesda, Md.-based American Medical Informatics Association (AMIA), said, “I think the most obvious takeaway” from the proposed rule “is that generally, it looks like CMS has made good on threats to harmonize meaningful use, now known as the Promoting Interoperability program, across hospitals and physicians, and I think this is an incredibly important and positive development. For the last several years, there has been a divergence in program requirements for hospitals and physicians, and just given the marketplace, in terms of how many hospitals have administrative purview over physician groups, this will be an incredibly welcome set of changes for promoting interoperability."

Smith continued, "You also mentioned telehealth, and again, telehealth advocates have been fighting for years to get CMS to jump into the game, and start reimbursing for telehealth services. This is important, because when CMS reimburses something, it clears the path in a big way for private insurers to do the same. And for years, while you’ve seen various private insurers toying with reimbursement, Medicare’s the big one, and this is really going to pave the way for that.”

When Leventhal asked about the Quality Payment Program and the harmonization now being created with the Promoting Interoperability program (until recently known as the Meaningful Use Program), and he asked how the industry might react to the 365-day reporting period, versus a 90-day reporting period that some have asked for, Smith said, “CMS has often been caught between a rock and a hard place when it comes to the quality measure requirements, in terms of the reporting period. I think the issue is more acute, pardon the pun, for the ambulatory side, because they have so many more quality measures. Certain specialty groups have made the case that they need to report on quality for 365 days, or it’s not an accurate measure of the quality they’re providing. I really don’t know how CMS will shake out on the reporting period, but if the last few days of events are any indication, CMS is more than likely going to move forward with what they’ve proposed here, by and large. I say that because just a few days ago, CMS said they were finished reviewing comments on the IPPS rule, which is a lightning-speed time for review of a rule of that size, and so what that tells me is that CMS is just making proposals and moving forward with what they think is reasonable. And this is counter to what the previous administration would do, which was to propose something, knowing there would be pushback, so they would actually propose higher thresholds and longer reporting periods, knowing they would end up more or less where they wanted to be in the first place. So it will be interesting to see where they end up around the reporting period; that’s likely the area where the loudest gripes will be focused.”

Looking at the landscape through different lenses

All of this really adds up to quite a fascinating situation. Administrator Verma and other senior CMS officials have stated publicly now many times their determination to lessen administrative burdens on practicing physicians; at the same time, they are determined to push ahead into value-based purchasing and measurement, a highly understandable stance, given that our U.S. healthcare system, according to the Medicare actuaries, is actively heading over a cost cliff, with total U.S. healthcare expenditures expected to increase 70 percent in the next several years.

How can senior federal healthcare officials find just the right levers to push, and push them just at the right levels of intensity, to move physicians, physician groups, hospitals, and hospital systems forward into value, without so alienating them that they end up becoming alienated, and resisting change? That really is the underlying fundamental question here.

I’m predicting ongoing struggles over quality measurement reporting periods especially, and secondarily, over the level of rigor involved in pushing the advancement and acceleration of value-based reimbursement participation. In particular, I think that AMGA’s Chet Speed has made some very valid and challenging points around the fact that some of the levers involved may not be rigorous enough to compel less-advanced physicians and physician groups to move forward with alacrity. Of course, Speed is reacting as the senior policy advocate at the association representing the largest and most advanced medical groups in the country. Inevitably, AMGA’s member group leaders are feeling frustrated by the fact that their advances, in their view, are implicitly being penalized by payment rates and modifications that, from their standpoint, don’t move the industry forward fast enough. At the same time, the onesie-twosie physician groups in less advanced healthcare markets are complaining—sometimes quite loudly—that change is moving too fast, not too slowly.

So we are at what seems like an inflection point right now in the shift from volume to value in U.S. healthcare. And it will take considerable skill—technical, political, and persuasive—for CMS’s leaders, especially Administrator Verma—to make this all work. It makes me think of a large family out bicycling. Can the seven-year-old daughter pedal as fast as her 19-year-old brother? How about the aging aunt? It might seem like a bit of a farfetched visual metaphor, but when you think about it—it feels more apt than not.

So—stay tuned, because we’re heading into real realness now on all of this—and things are only going to get realer and realer going forward.

Sponsored Recommendations

Going Beyond the Smart Room: Empowering Nursing & Clinical Staff with Ambient Technology, Observation, and Documentation

Discover how ambient AI technology is revolutionizing nursing workflows and empowering clinical staff at scale. Learn about how Orlando Health implemented innovative strategies...

Enabling efficiencies in patient care and healthcare operations

Labor shortages. Burnout. Gaps in access to care. The healthcare industry has rising patient, caregiver and stakeholder expectations around customer experiences, increasing the...

Findings on the Healthcare Industry’s Lag to Adopt Technologies to Improve Data Management and Patient Care

Join us for this April 30th webinar to learn about 2024's State of the Market Report: New Challenges in Health Data Management.

Findings on the Healthcare Industry’s Lag to Adopt Technologies to Improve Data Management and Patient Care

2024's State of the Market Report: New Challenges in Health Data Management