Health Policy News November 2016

This issue of Health Policy News focuses on recent developments in payment and delivery system reform.  After receiving more than 4,000 comments on its proposed rules, the Centers for Medicaid and Medicare Services (CMS) promulgated final rules implementing the new Quality Payment Program, advancing performance-based measures under Medicare, as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Our first article outlines the final rule and provides information about an ongoing comment period. We also share an update on New York’s groundbreaking Delivery System Reform Incentive Payment (DSRIP) program from members of PCG’s team who have been helping the state transition to performance-based measures.

Finally, we provide insights from this month’s National Academy for State Health Policy (NASHP) conference.

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CMS finalizes rules on new Medicare payment methodologies for clinicians

On October 14, 2016, CMS issued final rules to implement a new Quality Payment Program which includes the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (Advanced APMs).  The new program is authorized under MACRA.  That landmark bipartisan legislation: repealed Medicare’s flawed sustainable growth rate (SGR) formula, replaced three prior Medicare incentive programs, consolidated Medicare quality reporting requirements beginning in 2017, and authorized new pay-for-performance adjustments beginning in 2019 for eligible clinicians paid under the Medicare Part B physician fee schedule.

CMS now estimates that MIPS may distribute positive and negative Medicare payment adjustments in 2019 to 592,000 – 642,000 eligible clinicians, amounting to about $199 million in positive adjustments and $199 million in negative adjustments, plus $500 million in special bonuses for “exceptional performance” as defined in the new rules.  Another 70,000 – 120,000 eligible clinicians participating in Advanced APMs, such as certain types of risk-bearing Medicare accountable care organizations (ACOs), may receive…Read More

Client feature: New York DSRIP’s transition to payments based on performance measures

On April 14, 2014, CMS approved New York state’s groundbreaking DSRIP program through their Medicaid 1115 waiver amendment, allowing the state’s Department of Health (DOH) to reinvest $8 billion of federal savings generated by Medicaid Redesign Team (MRT) reforms. NY’s DSRIP incentive payments promote community-level collaborations in the form of “Performing Provider Systems” (PPSs) that implement innovative projects focused on system transformation, clinical improvement and population health improvement, with an overall statewide goal of reducing avoidable hospital use by 25 percent, over the program’s five years.

Now in the third year of the program (also known as Demonstration Year 2), the stakes are higher for all participants as payments transition from the initial program year’s rewards for developing institutional structures and accomplishing procedural milestones to a significantly heavier mix of performance based metrics.


Much of Demonstration Year 0 (April 2014 through April 2015), the first year following CMS approval, was spent…Read More

Insights from the annual NASHP Conference – #NASHPCONF16

From October 17th to 19th, members of PCG’s Health Policy team attended the annual NASHP Conference in Pittsburg, PA. The theme for this year’s event was “Where Ideas and Action Converge,” with particular focus on DSRIP waivers, Medicaid expansion and payment and delivery system reform innovation. In addition to presentations highlighting the innovative efforts in states under waiver and grant programs, discussions led by state and national policy makers on health care’s more headline grabbing topics (e.g., opiate abuse, ever-growing prescription drug costs, etc.).  were weaved through the three-day agenda.

Rising prescription drug costs were the focus of several panels, including the opening morning plenary, a breakfast session entitled “A Call to Action on Pharmacy Prices: Findings from NASHP’s Workgroup,” which kicked off the first full day of the conference. The panel was led by members of the NASHP workgroup: Trish Riley, Executive Director, NASHP, Nathan Johnson, Chief Policy Officer, Washington State Health Care Authority, Representative Norm Thurston, Utah House District 64, and Ameet Sarpatwari, Instructor in Medicine, Harvard Medical School and Brigham and Women’s Hospital.

NASHP’s workgroup…Read More

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