Directions in Healthcare Quality Measurement

Navigating clinical quality measures and reporting programs

Simplicity. This is a concept the Centers for Medicare & Medicaid (CMS) prioritized while revising its various quality measures and reporting programs, according to Andy Slavitt, acting administrator for CMS, in a speech days after the U.S. Department of Health and Human Services (HHS) introduced a long-awaited proposed rule to introduce Medicare physician payment reform provisions included in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).1

HSM_062016_Final_p013Though the concept of simplicity may not come across on the surface of the proposed regulations, detailed across 962 pages, healthcare industry professionals need to understand the various implications of the evolving Medicare payment structures in order to position their organizations for success in this new value-based landscape.2


With the Medicare sustainable growth rate (SGR) formula repealed, the MACRA aims to link physician payment updates to quality, value and participation in alternative payment and delivery models. The proposed rule on the implementation of the MACRA gives physicians the option of participating in one of two new payment models.

1. Merit-Based Incentive Payment System (MIPS)

The rule consolidates three currently disparate physician quality programs into the Merit-Based Incentive Payment System (MIPS), including the Physician Quality Reporting System (PCRS), the Value-Based Payment Modifier (VM) and the Electronic Health Record (EHR) Incentive Program (Meaningful Use), starting Jan. 1, 2019. The first performance measurement year for the new program is 2017.

Eligible professionals (EPs)—physicians, physician assistants, nurse practitioners, certified registered nurse anesthetists, clinical nurse specialists and groups that include such professionals—will receive scores on their performance in four categories.

  • Quality will account for 50% of the total score for the first year. Replacing the PQRS and quality measure of the VM, this category requires EPs to report six measures (reduced from the nine currently required under the PQRS) to accommodate specialty and practice differences. More than 200 measures will be available; more than 80% are tailored for specialists.
  • Previously known as Meaningful Use, the Advancing Care Information category (25% of the total score) would enable EPs to report customizable measures that demonstrate how they make use of technology in their practices, with a focus on information exchange and interoperability. Compared to the existing program, the number of quality reporting measures will decrease from 18 to 11, and EPs will no longer have to report on Clinical Decision Support (CDS) and the Computerized Provider Order Entry (CPOE) measures.
  • The Clinical Practice Improvement Activities (CPIA; 15% of the total score) category gives EPs incentive to improve their clinical practice, rewarding them for focus on care coordination, patient safety and beneficiary engagement. More than 90 options are available based on EP goals of practice.
  • Cost (10% of the total score) will be determined by Medicare claims, with no reporting required for EPs. To accommodate differences in specialty, the category would have 40 episode-specific measures.

Under the MIPS system, eligible providers would receive a base level of Medicare compensation that would then adjust based on aggregated scores from the four performance categories. The Composite Performance Score would determine if a provider received an upward payment adjustment, downward payment adjustment or no payment adjustment. During the first year, negative adjustments would be no more than 4%. Positive adjustments will be generally up to 4%, with additional bonuses for high performing providers. The rule proposes that the maximum percentage increase annually until it reaches 9% in 2022.

2. Alternative Payment Model (APM)

The MACRA’s Alternative Payment Model (APM) track is the more ambitious of the two, requiring physicians to take on additional financial risk for the possibility of higher reward.

This requires clinicians to satisfy the requirements of Qualifying APM Participants (QPs) by participating in an Advanced APM to be eligible for benefits such as exclusion from MIPS, and for payment years 2019 to 2024, a lump sum payment equal to 5% of the estimated aggregate amounts for Medicare Part B services. From 2026, payment rates under the Physician Fee Schedule will receive a permanent annual 0.75% increase. Those qualified for incentive payments have to receive a certain amount of payments or see enough of their patients through Advanced APMs.

The rule proposes two types of Advanced Alternative Payment Models (APMs): Advanced APMs and Other Payer Advanced APMs. Advanced APMs require participants to use certified EHR technology, provide payment based on quality measures similar to those used in the MIPS quality performance category, and be a medical home model or take more risk for monetary loss. The same requirements apply to the Other Payer Advanced APM; however, these APMs are designed for commercial or Medicaid APMs.

The proposed rule highlights models capable of qualifying as Advanced APs, with all requiring risk, including Next Generation ACO, Comprehensive Primary Care Plus, Medicare Shared Savings Program (MSSP) Tracks 2 and 3, Oncology Care Model with two-sided risk and Comprehensive ESRD Care. Though the rule noted CMS will continue to add to the list of qualifying APMs, notable exclusions in the initial list include the Comprehensive Care for Joint Replacement (CJR) model, Track 1 of the MSSP, and the Bundled Payments for Care Improvement initiative.


Hospitals employ or contract approximately 540,000 physicians, meaning that MACRA implementation has significant implications for them. To ensure operational efficiency, hospitals will have to strategically plan which tracks hospital-based physicians should choose. At a recent Alliance for Health Reform brief on MACRA, American Hospital Association (AHA) senior vice president for public policy analysis and development Ashley Thompson noted that “physicians and hospitals must partner together to move toward value-based care.”3

“There’s one piece of CMS’s proposal for the MIPS we really look forward to working with the agency to make happen,” AHA senior associate director of policy Akin Demehin said in an interview with Health System Management. “That’s the notion of physicians being able to use their hospital’s CMS quality performance measures and have that count towards MIPS requirements. That’s a win for us, as it reduces the burden of measurements on physicians but also enables physicians and hospitals to collaborate very closely on the same quality topics, really moving the needle for the patients they work together to serve.”

“We are strongly supportive of the notion of fewer—but more powerful—measures that are more closely tied to patient outcomes,” added Nancy Foster, AHA vice president of quality and patient safety. “To measure for measurement’s sake is frustrating; to measure in ways that you can see you’re saving lives and reducing harm is so energizing.”

Looking ahead to the future of quality measures in a value-based healthcare industry, Foster believes there is “enormous power to be had in having a coordinated, focused approach to measurement that identifies the most important aspects of care for that patient.” CMS can further simplify measurement requirements and reduce the burden of reporting by introducing a common set of objectives for providers across the care continuum.

According to Foster, this is a concept highlighted in the Institute of Medicine’s Vital Signs: Core Metrics for Health and Health Care Progress report that discusses how uncoordinated measurement requirements from CMS and others do not contribute to progress in improving the quality of healthcare.4 David Blumenthal, president of the Commonwealth Fund, told Health System Management that the committee developed the measures, highlighted in the adjacent box, to improve the status of quality measurement, principally by reducing the proliferation of measures and providing direction for the measurement enterprise.

“The challenge was to develop a parsimonious set of measures that would be widely applicable throughout the healthcare system and provide guidance to measure developers going forward,” Blumenthal said. The committee used the Triple Aim as its North Star, not starting from a specialty-specific standpoint but rather from an orientation that encompassed healthcare improvement, cost control and reform, Blumenthal said.

“The first thing we realized as a panel of the nation’s leading experts on quality and health system reform was that measurement is not an end in itself; it has no value independent of the goals that it sets out to further.”

The quality measures CMS currently uses for Advanced Payment Models “may be more in keeping with the quality measures we proposed than are the MIPS quality measures, as they’re oriented toward models and how models perform rather than individual clinicians and how individual clinicians perform,” Blumenthal remarked.

Though quality measures are bound to evolve over time as the industry transitions to value-based care, the first performance benchmark year for new CMS regulations is slated to launch Jan. 1, 2017, making planning necessary to succeed when the new payment systems begin in 2019. HHS is accepting comments on the proposed rule through June 26.5 provide the link for making comments.