November 7, 2016

Regulatory Updates from CMS and ONC – Paying for Quality and Overseeing EHRs

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Two major rules published last month included major changes to the healthcare industry. 

First, the Centers for Medicare & Medicaid Services (CMS) issued its long-awaited Medicare Access and CHIP Reauthorization Act (MACRA) final rule on paying Medicare Part B providers for quality and performance. This new system, titled the Merit-Based Incentive Payment System, or MIPS, becomes effective Jan. 1, 2017, and it means that CMS will adjust Medicare Part B fee schedule payments to eligible clinicians based on their performance in four areas, weighted together: quality measures, cost of services, clinical practice improvement activities, and a revised meaningful use measure called advancing care information.

CMS will begin measuring performance in 2017 and adjust individual provider (or group) fee schedule payments up or down in 2019. Adjustments start out at plus or minus 4 percent in 2019, rising to 9 percent in 2022 and beyond. Again, adjustments are based on a weighted performance score compared to other clinicians, calculated two years earlier; i.e., 2021 adjustments are based on 2019 data.

There are some transition processes for the 2017 measurement year, as well as certain exemptions for providers in health resource shortage areas, non-patient facing providers, and those with low Medicare volumes or charges. Also, this system only impacts the way providers are paid under the Part B physician fee schedule. 

The rule also set up an alternative payment method for providers that serve a significant number of beneficiaries in advanced alternative payment models (APMs). These advanced models require providers to use certified electronic health records (EHRs), submit quality measures, and bear a significant financial risk for treating patients. CMS will be publishing a list of these models (including some of the CMS demonstration projects) by Jan. 1, 2017. Eligible clinicians in these models who serve enough Medicare beneficiaries are not measured under MIPS and can get 5 percent of their previous year’s Part B payments as a bonus.

Hospital payments are not impacted, nor are clinician payments for beneficiaries in Medicare Advantage plans. CMS has excellent resources available on its website to further explain this new program. 

The Office of the National Coordinator for Health Information Technology (ONC) also issued its final rule on increased oversight of certified EHRs. The rule gives ONC the authority to revoke the certification of EHRs that show evidence of threats to public health and safety and other violations.

This also gives ONC direct authority, essentially allowing it to bypass the certification bodies that had granted the certifications to the EHRs. ONC can now oversee EHR vendors, much like the FDA oversees drugs and device manufacturers, pulling items off the market for violations.  

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