Fact sheet

The Medicare Advantage Qualifying Payment Arrangement Incentive Demonstration

The Centers for Medicare & Medicaid Services (CMS) is announcing the Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration. The MAQI Demonstration will be tested under the authority of Section 402 of the Social Security Amendments of 1967 (as amended).

The MAQI Demonstration is designed to test whether exempting Merit-based Incentive Payment System (MIPS) -eligible clinicians who participate to a sufficient degree in certain payment arrangements with Medicare Advantage Organizations (MAOs) from the MIPS reporting requirements and payment adjustment will increase or maintain participation in payment arrangements similar to Advanced APMs with MAOs and change the manner in which clinicians deliver care. In the 2019 Physician Fee Schedule proposed rule, released today, CMS is proposing a regulation to effectuate the waivers contemplated under the MAQI Demonstration because the budget neutrality requirement in MIPS means that exempting MIPS eligible clinicians could have an impact on the payment adjustments for other MIPS eligible clinicians. Details of the MAQI Demonstration will remain under development until the 2019 Physician Fee Schedule proposed rule is finalized. The Demonstration will test whether:

  • There is an increase in clinician participation in payment arrangements with MAOs that meet the criteria of Qualifying Payment Arrangements;
  • Participating in Qualifying Payment Arrangements and Advanced APMs to the degree required to be eligible for the Demonstration Waiver incentivizes providers to transform their care delivery (assessed by interviews with participating clinicians);
  • Whether there is a change in utilization patterns among participants in the Demonstration; and
  • If there are changes in utilization, how those changes affect MA plan bids.

Background:

Under current law, eligible clinicians may participate in one of two paths of the Quality Payment Program (QPP): 1) MIPS, which adjusts Medicare payments based on combined performance on measures of quality, cost, improvement activities, and promoting interoperability, or 2) Advanced APMs, under which eligible clinicians may earn an incentive payment for sufficient participation in certain payment arrangements with Fee-for-Service (FFS) and, starting in the 2019 performance period, with a combination of those Medicare FFS arrangements and similar arrangements with other payers such as Medicare Advantage commercial payers, and Medicaid managed care. To participate in the Advanced APM path of QPP for a given year and earn an incentive payment, eligible clinicians must be determined to be Qualifying APM Participants (QPs); in addition to earning an APM incentive payment, QPs are excluded from the MIPS reporting requirements and payment adjustment.

An eligible clinician may become a QP through one of two options: the Medicare Option (which only includes Medicare FFS, not Medicare Advantage), or the All-Payer Combination Option. Under the Medicare Option, which began with the 2017 performance period, eligible clinicians can be QPs if they meet certain thresholds for participation in Advanced APMs, which are Medicare FFS payment arrangements that meet certain criteria. Under the All-Payer Combination Option, which will begin with the 2019 performance period, eligible clinicians can also be QPs if they meet a minimum threshold for participation in Advanced APMs (lower than the threshold required under the Medicare Option) and certain All-Payer Combination Option thresholds that include participation in both Advanced APMs and Other Payer Advanced APMs, which are payment arrangements with other payers that meet similar criteria to those for Advanced APMs. Eligible clinicians who do not meet the thresholds to become QPs for a year can meet lower thresholds to become “Partial QPs,” which allows them the option to be excluded from the MIPS reporting requirements and payment adjustment, but does not earn them an APM incentive payment. An eligible clinician that does not meet the criteria to be a QP or a Partial QP for a given year is subject to MIPS for that year unless the clinician meets certain other MIPS exclusion criteria, such as being newly enrolled in Medicare or meeting the low volume threshold for Medicare FFS patients, payments, or services.

The MAQI Demonstration will allow participating clinicians to have the opportunity to be eligible for waivers that will exempt them from the MIPS reporting requirements and payment adjustment for a given year if they participate to a sufficient degree in Qualifying Payment Arrangements with MAOs (combined with participation in Advanced APMs with Medicare FFS, if any) during the performance period for that year, without requiring them to be QPs or Partial QPs, or to otherwise meet MIPS exclusion criteria. The Demonstration will permit consideration of participation in “Qualifying Payment Arrangements” with Medicare Advantage plans that meet the criteria to be Other Payer Advanced APMs a year before the All-Payer Combination Option is available. Under the Demonstration, clinicians will not have to have a minimum amount of participation in an Advanced APM with Medicare FFS in order to be exempt from the MIPS reporting requirements and payment adjustment for a year. However, if clinicians participate in one or more Advanced APMs with Medicare FFS, that participation will also be counted towards the thresholds that qualify participants for the waiver under this Demonstration from the MIPS reporting requirements and payment adjustment. Demonstration participants who do not meet the thresholds to receive waivers from MIPS reporting requirements and payment adjustments for a given year may still continue participation in the Demonstration and will be notified with sufficient time to complete MIPS reporting for the year. The Demonstration will not grant QP status to participating clinicians; participating clinicians would still have to meet the thresholds for participation under the Medicare Option or All-Payer Combination Option in order to become QPs and earn the incentive payment.

Under section 1848(q)(6)(F)(ii) of the Act, MIPS payment adjustments must be budget neutral in the aggregate. Therefore, removing MIPS eligible clinicians from the population across which positive and negative payment adjustments are calculated under MIPS may affect the payment adjustments for other MIPS eligible clinicians. The Demonstration would remove certain clinicians from the pool of MIPS eligible clinicians for which the MIPS payment adjustments are calculated, thereby decreasing the pool of MIPS eligible clinicians included in the budget neutrality determination. This may have the effect of increasing or decreasing the number of MIPS eligible clinicians receiving negative or positive payment adjustments. The Demonstration is contingent on the outcome of the proposed rule to adopt the waivers because of its effect on MIPS payment adjustments for other clinicians.

In addition, the MAQI demonstration will include a waiver of the requirement that the Secretary permit all eligible professionals to voluntarily report even if they are not required to do so under MIPS regulations, so that the Demonstration will prohibit reporting under the MIPS by clinicians who participate in the Demonstration and meet the thresholds to receive the waivers from MIPS reporting and payment consequences for a given year. 

The first performance period for the Demonstration will be 2018, and the Demonstration will last for five years.

Demonstration Design:

Eligible Participants

Clinicians who meet the definition of MIPS eligible clinician under the QPP as defined under 42 CFR § 414.1305 will be eligible to participate in the MAQI Demonstration. Currently, MIPS eligible clinicians include physicians (including doctors of medicine, doctors of osteopathy, osteopathic practitioners, doctors of dental surgery, doctors of dental medicine, doctors of podiatric medicine, doctors of optometry, and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists. For example, for the 2019 performance period, CMS has proposed to amend §414.1305 to modify the definition of a MIPS eligible clinician to also include a physical therapist, occupational therapist, clinical social worker (as defined in section 1861(hh)(1) of the Act); and clinical psychologist (as defined by the Secretary for purposes of section 1861(ii) of the Act); and a group that includes such clinicians.

Application Process and Participation

Clinicians will apply to the Demonstration up-front, prior to CMS determining whether they meet the conditions to qualify for the waiver from the MIPS reporting requirements and payment adjustment under the Demonstration. CMS plans to allow new clinicians to apply each year of the Demonstration. Clinicians who are selected for participation in the Demonstration will receive waivers from the MIPS reporting requirements and payment adjustment for the year if they: (1) meet the combined thresholds for sufficient participation in Qualifying Payment Arrangements with MAOs and Advanced APMs, and (2) submit the required documentation as outlined in the Submission Process for Qualifying Payment Arrangements section of this fact sheet and in future guidance to be provided to potential applicants. If they do not meet these conditions for a year, the eligible clinician’s participation in the Demonstration will not be terminated but they will not be eligible for the waivers from the MIPS reporting requirements and payment adjustment for that year. Therefore, unless they become QPs or Partial QPs, or are otherwise excluded from MIPS, the participating clinicians will be subject to the MIPS reporting requirements and payment adjustment for the applicable year.

Eligibility for the waiver from the MIPS reporting requirements and payment adjustment based on meeting the conditions set forth in the Demonstration (the “Demonstration Waiver”) will be determined on an annual basis. Participation will last the duration of the Demonstration, unless participation is voluntarily or involuntarily terminated under the terms and conditions of the Demonstration. For example, clinicians who do not comply with the terms of the participation agreement or present program integrity risks may be involuntarily terminated from the Demonstration. Participants will have the opportunity each year to submit the required documentation regarding potential Qualifying Payment Arrangements and the amount of their revenue and/or patients covered by these arrangements.

Qualifying Payment Arrangement Criteria

The requirements for Qualifying Payment Arrangements under the MAQI Demonstration will be the same as the Other Payer Advanced APM criteria under QPP for the applicable year, as set forth in 42 CFR § 414.1420. As that regulation is amended or updated for performance years, the amended or updated requirements in the regulation will be applied to determine if a payment arrangement is a Qualifying Payment Arrangement for the same performance year in the Demonstration.

For the 2018 performance year, those standards are that the payment arrangement must:

  • Require at least 50% of eligible clinicians in each participating APM Entity group to use certified electronic health record technology (CEHRT) to document and communicate clinical care;
  • Base payments for covered professional services on quality measures that are comparable to those used in the MIPS quality performance category and meet the standards specified in § 414.1420(c); and
  • Require APM Entities to bear more than nominal financial risk if actual aggregate expenditures exceed expected aggregate expenditures., as described in § 414.1420(d)(1) and (d)(3).

The Demonstration’s standards for minimum required financial risk will match those of the QPP’s All-Payer Combination Option. As of January 1, 2018, those standards are:

Expenditure-Based Nominal Amount Standard

Revenue-Based Nominal Amount Standard

(only for payment arrangements that explicitly express risk in terms of revenue)

  • Marginal risk of at least 30%;
  • Minimum loss rate of no more than 4%; and
  • Total risk of at least 3% of the expected expenditures of the APM Entity (the “benchmark” of the Entity)

 

  • Marginal risk of at least 30%;
  • Minimum loss rate of no more than 4%; and
  • Total risk of at least 8% of the total combined revenues from the payer to the providers and other entities under the payment arrangement

 

Submission Process for Qualifying Payment Arrangement Determinations
For 2019 and subsequent years of the Demonstration, participating clinicians and MAOs must use either the Payer- or Eligible Clinician- Initiated Submission Processes to submit necessary materials to CMS to determine whether the payment arrangement meets the standards to be a Qualifying Payment Arrangement. Because CMS will not make Other Payer Advanced APM determinations for the 2018 performance year, Demonstration participants must submit information for 2018 payment arrangements to CMS through a separate process so that CMS may determine whether their payment arrangements with MAOs meet required criteria to be a Qualifying Payment Arrangement. The content of the submission will mirror the content required by CMS to be submitted for purposes of making Other Payer Advanced APM determinations, and will include:

  • Name of the payer and payment arrangement
  • Description of how the payment arrangement meets the requirements outlined above
  • Payment arrangement documentation (e.g., contracts)

    The planned submission period for 2018 Qualifying Payment Arrangement determinations is anticipated to be in late Fall 2018.

    Thresholds to Qualify for Waiver

    Eligibility for the Demonstration Waiver is conditioned on the participating clinician meeting a combined threshold for participation in Qualifying Payment Arrangements and Advanced APMs. There are two methods used to measure participation: payments and patients. The participation thresholds match the thresholds under the Medicare Option of the QPP. Similar to the QPP, clinicians may meet either of the two thresholds and the Demonstration will use whichever threshold is more advantageous to the clinician. The thresholds for the Demonstration will be:

    Demonstration Thresholds

    Performance Year

    2018

    2019

    2020

    2021

    2022

    Payment Amount

    25%

    50%

    50%

    75%

    75%

    Patient Count

    20%

    35%

    35%

    50%

    50%

    The payment amount threshold score will be calculated by dividing a numerator (the aggregate of payments for Medicare Part B covered professional services furnished by the clinician during the Performance Period to beneficiaries attributed to the clinician through Advanced APM(s), plus the aggregate of MAO payments made to the clinician under the terms of the Qualifying Payment Arrangement(s) during the Performance Period) by a denominator (the aggregate of payments for Medicare Part B covered professional services furnished by the clinician to all eligible beneficiaries during the Performance Period, plus the aggregate of all MAO payments to the clinician during the Performance Period). The definition of eligible beneficiaries is listed below.

    The patient count threshold score will be calculated by dividing a numerator (the number of beneficiaries attributed to the clinician through Advanced APM(s) to whom the clinician furnishes Medicare Part B covered professional services during the Performance Period, plus the number of patients to whom the clinician furnishes services that are included in the measures of aggregate expenditures used under the terms of all of their Qualifying Payment Arrangements during the Performance Period) by a denominator (the number of eligible beneficiaries to whom the clinician furnishes Medicare Part B covered professional services during the Performance Period, plus the number of beneficiaries to whom the clinician furnishes services for which MAOs pay during the Performance Period).

    The definition of eligible beneficiaries as used in the Medicare FFS component of the denominators will be Medicare FFS beneficiaries who, during the Performance Period, are not enrolled in Medicare Advantage or a Medicare cost plan, do not have Medicare as a secondary payer, are enrolled in both Medicare Parts A and B, are at least 18 years of age, and are United States residents.

    Payment amount method:

     $ through Qualifying Payment Arrangements + $ through Advanced APMs
    Total $ from MAOs and from Medicare FFS

    Patient count method:

    # beneficiaries under Qualifying Payment Arrangements + #beneficiaries under Advanced APMS
    Total # beneficiaries under MAOs and Medicare FFS

    Submission Process for Demonstration Waiver Determinations

    Participants will need to submit information to CMS about their patients and/or payments under Qualifying Payment Arrangements and their total MAO patients and/or payments. CMS has access to participants’ Medicare FFS claims and Advanced APM participation. CMS will evaluate whether participants meet the thresholds at the eligible clinician level, not at the APM entity level, as not all Demonstration participants will be participating in Medicare FFS Advanced APMs. This means that the calculation of the numerator and denominator to determine whether the thresholds are met will include all relevant Medicare FFS and MA patients and/or payments associated with each individual participant’s NPI. If the participating clinician meets the standards to qualify for the waiver from MIPS reporting and payment consequences, then CMS will exclude all TIN/NPI combinations for the participant’s NPI from MIPS reporting and payment consequences.

    The Performance Period from which threshold data are collected each year will be the same as the QP Performance Period: January 1 through August 31. There will be three date ranges (snapshots) for which Demonstration participants may qualify for the Demonstration Waiver: January 1 through March 31, January 1 through June 30, and January 1 through August 31. Participants may submit payment and patient count data on any or all of these snapshots during the Demonstration’s submission period (September 1 through October 31, following the Performance Periods). If a Demonstration participant meets or exceeds the relevant threshold score in any of the snapshots, the clinician will qualify for the Demonstration Waiver for the applicable performance and payment years. For example, for the 2018 performance period under the Demonstration, if a participating clinician meets one of the thresholds for any snapshot, the clinician will receive the Demonstration Waiver for the 2018 performance period. As such, the clinician will not report to MIPS for 2019 and will not receive any MIPS payment consequences (either upward or downward adjustments) in the 2020 payment year. If a Demonstration participant does not meet the relevant threshold score for at least one snapshot, the clinician will not receive the Demonstration Waiver. Such a clinician may be eligible to be excluded from MIPS by meeting criteria to be a QP, Partial QP, or one of the other MIPS exclusion criteria under the QPP.

    MAQI Application:

    Clinicians who are interested in participating in the MAQI Demonstration must submit an electronic application. The MAQI Demonstration application will be available shortly, and a link to the application will be posted at the Demonstration webpage located at https://innovation.cms.gov/initiatives/maqi/.