Wednesday, October 19, 2016

The Quality Payment Program Final Rule

Many people have asked me to review the Quality Payment Program final rule, released on October 14, 2016.

Several summaries have already been written but your best bet is to rely on the CMS Quality Payment Program website at

Yes, the rule is still complex - over 2400 pages, of which more than 50% is the mandated response to comments made on the proposed rule.  The good news is that CMS has been very responsive to feedback, creating a transition plan for adoption, reducing the number of criteria and extending the timeline which enables iterative learning before large scale implementation.

Under the Quality Payment Program, clinicians have two approaches to choose from for reimbursement:  the Merit-based Incentive program (MIPS) and Advanced Alternative Payment Models (APMs).

The Merit-based Incentive program (MIPS) is a new program for certain Medicare-participating eligible clinicians that makes payment adjustments based on quality, cost,  practice improvement, and technology adoption while consolidating components of three existing programs—the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for eligible professionals.  MIPS focuses on quality (both a set of evidence-based, specialty-specific standards as well as practice-based improvement activities),  and use of certified electronic health record technology (CEHRT) specifically focused on interoperability and advanced quality objectives.

In the final rule's technology area, called Advancing Care Information (which replaces Meaningful Use for physicians), CMS reduced the number of measures from 11 to 5 .   CMS recognizes that technology, infrastructure, physician support systems, and clinical practices will change over the next few years, so over reliance on a highly prescriptive and broadly scoped certification rule must be avoided.

Think of MIPS not as four separate categories (quality measurement, cost control, practice improvement, and wise use of IT) but as a single program focused on rewarding clinicians for improving quality and penalizing clinicians for non-participation.   There are only a few ways to change clinician behavior - pay them more, improve their satisfaction and help them avoid public humiliation (like poor quality scores posted on a public website).  MIPS pays them more, consolidates multiple other government programs, and provides flexibility to give clinicians every opportunity to make their quality scores look good.

Advanced Alternative Payment Models (APMs) were created to gradually evolve the US healthcare system from volume-based to value-based care.   Instead of rewarding clinicians for ordering more tests, APMs align incentives to reward wellness.   APMs are not a mechanism to deny patients access to appropriate care.  Instead they incentivize clinician to deliver the right care, at the right time in the right setting, hopefully achieving good outcomes at lower cost.   They involve taking downside risk - if you spend too much, your income is reduced, aligning risk and reward for spending healthcare dollars.

There are many different kinds of APMs - the Shared Saving Program, Medical Home Models, and episode payment models for cardiac and joint care.

CMS is exploring development of a voluntary Medicare ACO Track 1+ Model for ACOs currently participating in Track 1 of the Shared Savings Program or ACOs seeking to participate in the Shared Savings Program for the first time. It would test a payment model that incorporates more limited downside risk than is currently present in Tracks 2 or 3 of the Shared Savings Program.

Which approach should you choose - MIPS or APMs?   That depends on the size of your practice, the tools you have available to support care management/population health, and your experience with different payment models.    For a comparative analysis of the MIPS and APM programs see

In previous posts, I lamented the impact of the proposed rule on small practices, the linkage to the 2015 Certification Rule and the burden of measurement/reporting.  Many organizations reported similar concerns.

What did CMS do in the final rule?


(1) created a transition year with an iterative learning and development period in the beginning of the program.  This is described in detail on Andy Slavitt’s blog as the “pick-your-own-pace approach”  
(2) adjusted the MIPS low-volume threshold ($30,000 in Medicare Part B allowed charges or less than or equal to 100 Medicare patients) exempting many small practices
(3) established an Advanced APM financial risk standard that promotes participation in robust, high-quality models i.e. creating Track 1+ which reduces overall downside risk
(4) simplified the  technology requirements and offered partial credit for progress on technology goals
(5) established of Medical Home Model standards that promote care coordination.

The rule is a final rule with comment – which means that there are numerous areas in the rule where CMS is seeking comment to inform  future rule-making, and that comment period is open for 60 days. Seek out those sections and send CMS comment letters.

This year I’ve spent time in the UK, Denmark, and China, so I’ve watched how a single payer system and a more uniform, government administered approach works for society.    Although it may be that the US will evolve to a more uniform healthcare delivery system over time (i.e. a few decades) there is no way such wholesale change is politically  possible in the short term among the heterogeneous stakeholders of the United States.

Think of the Quality Payment Program as the beginning of a journey.   Some of it will work and some of it will not.   Some reimbursement choices will be expanded and others discontinued.   As long as clinicians are given flexibility along the way, and the overall burden is kept at a manageable level, I’m willing to pilot some of these programs and see how it goes.     More to come as we get into the details of EHR certification (just the limited components we need for APMs), compute quality measures, and build analytic tools   CMS is listening and I thank them for it.

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