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Here are the highlights of the Final Rule for QPP for Year 2 under MACRA as announced by CMS yesterday: • Weighting the MIPS Cost performance category to 10% of your total MIPS final score, and the Quality performance category to 50%. • Raising the MIPS performance threshold to 15 points in Year 2 (from 3 points in the transition year). • Allowing the use of 2014 Edition and/or 2015 Certified Electronic Health Record Technology (CEHRT) in Year 2 for the Advancing Care Information performance category, and giving a bonus for using only 2015 CEHRT. • Awarding up to 5 bonus points on your MIPS final score for treatment of complex patients. • Automatically weighting the Quality, Advancing Care Information, and Improvement Activities performance categories at 0% of the MIPS final score for clinicians impacted by Hurricanes Irma, Harvey and Maria and other natural disasters. • Adding 5 bonus points to the MIPS final scores of small practices. • Adding Virtual Groups as a participation option for MIPS. • Issuing an interim final rule with comment for extreme and uncontrollable circumstances where clinicians can be automatically exempt from these categories in the transition year without submitting a hardship exception application (note that Cost has a 0% weight in the transition year) if they were have been affected by Hurricanes Harvey, Irma, and Maria, which occurred during the 2017 MIPS performance period. • Decreasing the number of doctors and clinicians required to participate as a way to provide further flexibility by excluding individual MIPS eligible clinicians or groups with =$90,000 in Part B allowed charges or =200 Medicare Part B beneficiaries. • Providing more detail on how eligible clinicians participating in selected APMs (known as MIPS APMs) will be assessed under the APM scoring standard. • Creating additional flexibilities and pathways to allow clinicians to be successful under the All Payer Combination Option. This option will be available beginning in performance year 2019.

On November 2, CMS issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2018. The overall update to payments under the PFS based on the finalized CY 2018 rates will be +0.41 percent. This update reflects the +0.50 percent update established under the Medicare Access and CHIP Reauthorization Act of 2015, reduced by 0.09 percent, due to the misvalued code target recapture amount, required under the Achieving a Better Life Experience Act of 2014. After applying these adjustments, and the budget neutrality adjustment to account for changes in Relative Value Units, all required by law, the final 2018 PFS conversion factor is $35.99, an increase to the 2017 PFS conversion factor of $35.89.

On November 1, CMS issued the CY 2018 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System final rule with comment period, which includes updates to the 2018 rates and quality provisions and other policy changes. CMS adopted a number of policies that will support care delivery; reduce burdens for health care providers, especially in rural areas; lower beneficiary out of pocket drug costs for certain drugs; enhance the patient-doctor relationship; and promote flexibility in healthcare. CMS is increasing the OPPS payment rates by 1.35 percent for 2018. The change is based on the hospital market basket increase of 2.7 percent minus both a 0.6 percentage point adjustment for multi-factor productivity and a 0.75 percentage point adjustment required by law. After considering all other policy changes under the final rule, including estimated spending for pass-through payments, CMS estimates an overall impact of 1.4 percent payment increase for providers paid under the OPPS in CY 2018. CMS updates ASC payments annually by the percentage increase in the Consumer Price Index for all urban consumers (CPI-U). The Medicare statute specifies a Multi-Factor Productivity (MFP) adjustment to the ASC annual update. For CY 2018, the CPI-U update is 1.7 percent. The MFP adjustment is 0.5 percent, resulting in a CY 2018 MFP-adjusted CPI-U update factor of 1.2 percent. Including enrollment, case-mix, and utilization changes, total ASC payments are projected to increase by approximately 3 percent in 2018.

The Centers for Medicare & Medicaid Services (CMS) announced the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced). Under traditional fee-for-service payment, Medicare pays providers for each individual service they perform. Under this bundled payment model, participants can earn additional payment if all expenditures for a beneficiary’s episode of care are under a spending target that factors in quality. Bundled payments create incentives for providers and practitioners to work together to coordinate care and engage in continuous improvement to keep spending under a target amount. BPCI Advanced participants may receive payments for performance on 32 different clinical episodes which are listed below. Of note, BPCI Advanced will qualify as an Advanced Alternative Payment Model (Advanced APM) under the Quality Payment Program (QPP). Under Advanced APMs, providers take on financial risk to earn the Advanced APM incentive payment. BPCI Advanced will operate under a total-cost-of-care concept, in which the total Medicare fee for services (FFS) spending on all items and services furnished to a BPCI Advanced Beneficiary during the Clinical Episode, including outlier payments, will be part of the Clinical Episode expenditures for purposes of the Target Price and reconciliation calculations, unless specifically excluded. Clinical Episodes BPCI Advanced will initially include 29 inpatient Clinical Episodes and 3 outpatient Clinical Episodes. Participants selected to participate in BPCI Advanced beginning on October 1, 2018, must commit to be held accountable for one or more Clinical Episodes and may not add or drop such Clinical Episodes until January 1, 2020. Inpatient Clinical Episodes – 29 Disorders of the liver excluding malignancy, cirrhosis, alcoholic hepatitis * *(New episode added to BPCI Advanced) Acute myocardial infarction Back & neck except spinal fusion Cardiac arrhythmia Cardiac defibrillator Cardiac valve Cellulitis Cervical spinal fusion COPD, bronchitis, asthma Combined anterior-posterior spinal fusion Congestive heart failure Coronary artery bypass graft Double joint replacement of the lower extremity Fractures of the femur and hip or pelvis Gastrointestinal hemorrhage Gastrointestinal obstruction Hip & femur procedures except major joint Lower extremity/humerus procedure except hip, foot, femur Major bowel procedure Major joint replacement of the lower extremity Major joint replacement of the upper extremity Pacemaker Percutaneous coronary intervention Renal failure Sepsis Simple pneumonia and respiratory infections Spinal fusion (non-cervical) Stroke Urinary tract infection Outpatient Clinical Episodes – 3 Percutaneous Coronary Intervention (PCI) Cardiac Defibrillator Back & Neck except for Spinal Fusion

Center for Medicare and Medicaid Services (CMS) conducts and publishes an assessment of the quality and efficiency impact of the use of endorsed measures in CMS programs every three years as required by statute. The first report was published March 1, 2012, and the 2018 Impact Assessment Report is the third such report. The data-driven results of this Report support the use of measures implemented in CMS reporting programs to drive improvement in the quality of care provided to patients in facilities and across settings nationwide. This report is used by the measure developer community, patients and families, clinicians, providers, federal partners, and researchers. The 2018 Impact Assessment Report demonstrates that performance on CMS measures contributed to better care and reduced expenditures, and identified critical areas of improvement across settings with respect to six CMS quality priorities: patient safety, person, and family engagement, care coordination, effective treatment, healthy living, and affordable care. Highlights include these main findings: Patient impacts estimated from improved national measure rates indicated approximately: 670,000 additional patients with controlled blood pressure (2006–2015). 510,000 fewer patients with poor diabetes control (2006–2015). 12,000 fewer deaths following hospitalization for a heart attack (2008–2015). 70,000 fewer unplanned readmissions (2011–2015). 840,000 fewer pressure ulcers among nursing home residents (2011–2015). 9 million more patients reporting a highly favorable experience with their hospital (2008–2015). Costs avoided were estimated for a subset of Key Indicators, data permitting. The highest was associated with increased medication adherence ($4.2 billion–$26.9 billion), reduced pressure ulcers ($2.8 billion–$20.0 billion), and fewer patients with poor control of diabetes ($6.5 billion–$10.4 billion). National performance trends are improving for 60% of the measures analyzed, including a majority of outcome measures, and are stable for about 31%. Overwhelmingly, hospitals (92%) and nursing homes (91%) surveyed reported they consider CMS measures clinically important. Likewise, 90% of hospitals and 83% of nursing homes agreed that performance on CMS quality measures reflects improvements in care. Respondents also described barriers to reporting, including burden; barriers to improving performance; and unintended consequences of CMS measures.