Slide 8

There are 3 groups of clinicians who are NOT eligible to participate in MIPS despite being an eligible provider type. The first group consists of those who are in their first year of Medicare Part B participation. Clinicians are exempt from MIPS participation in the calendar year they first become credentialed to accept Medicare. The next group of providers exempt from MIPS participation are those who do not meet the “Low-Volume Threshold” for program participation. For the 2018 program year, the low volume threshold is set at Medicare allowable billing charges of greater than $90,000 dollars and provides care for more than 300 Medicare patients in a 12 month period. To be a participant in MIPS, a clinician must exceed BOTH of these conditions. In a 12 month period, the provider must have more than $90,000 dollars in allowable Medicare Part B claims and provide care to more than 300 Medicare patients. If either of these conditions is not met, then the provider is exempt from participating in MIPS in the performance year. The dates that CMS is using to calculate provider eligibility for 2018 is September 1st of 2016 to August 31st of 2017, with a second phase of calculations scheduled to take place using the dates of September 1, 2017 through August 31 of 2018. The CMS QPP website previously mentioned at QPP.CMS.GOV includes the ability to query a provider by National Provider Identifier or NPI to determine program eligibility. The third group of providers exempt from MIPS participation are those who are significantly participating in an Advanced Alternative Payment Model which will be discussed more later in this video. Please note that MIPS also does not apply to hospitals or facilities.

Slide 9

There are different ways that providers can participate in the program, as an individual provider or as a group of providers. If participating as an individual, a provider is assessed separately under each NPI and Tax Identification Number combination. If the provider works under more than one Tax ID Number, program performance is calculated separately within each TIN and Medicare reimbursements are adjusted relative to that provider’s program performance at that location.

In the group participation option, two or more clinicians who have reassigned their billing rights to a single tax identification number are assessed as a group of participants. Members are assessed as a group across all four of the MIPS performance categories. Program performance is consolidated and all group members receive the same MIPS score and subsequent reimbursement rate. If choosing to report as a group, all ECs practicing under that TIN must report as part of that group.

Groups can also participate as an APM entity, for example as members of an Accountable Care Organization or ACO.

Lastly, clinicians can participate in the program through something called a “Virtual Group”. In Virtual Group participation, solo practitioners and groups of 10 or fewer clinicians come together “virtually”, no matter what specialty or location, to participate in MIPS together. To be eligible to join or form a virtual group, you would need to be a

solo practitioner who exceeds the low-volume threshold individually, and are not a newly Medicare-enrolled eligible clinician, a Qualifying APM Participant or QP, or a Partial QP choosing not to participate in MIPS or a group that has 10 or fewer eligible clinicians and exceeds the low-volume threshold at the group level. Solo practitioners and groups who want to form a virtual group must go through an election process with CMS. Virtual groups election must occur prior to the beginning of the performance period and cannot be changed once the performance period starts. This election period was October 11 to December 31, 2017, for the 2018 MIPS performance period.

Whether participating as an individual, group or virtual group, the Low-volume threshold remains the same. In terms of Group participation, the dollar value of claims and the number of patients seen is consolidated across all group members, thus the group as a whole must have more than $90,000 dollars in Medicare Part B allowable charges and provide care to more than 300 Medicare patients in the 12 month period. In that way, group participation could be used to allow individual ECs who do not meet the low-volume threshold on their own to band together to meet eligibility requirements and participate in MIPS, potentially increasing Medicare reimbursement rates.

Slide 10

In the first program year of 2017, which CMS labeled a transition year, clinicians were provided options to “Pick Their Pace” of program participation, with several flexible options ECs could choose from. In 2018, those options are gone and CMS has made additional changes to the minimum reporting period lengths of the MIPS performance categories. In 2018, the Quality and Cost performance categories must be reported for a full calendar year or 365 days. The Improvement Activities and Advancing Care Information performance categories, as was also the case in 2017, must again be reported for a minimum of 90 continuous days in 2018. Thus, to maximize points earned, ECs or groups can choose reporting periods in these two categories anywhere from 90-365 days, using reporting period date ranges that are most advantageous, earning the EC or group the maximum points available.

Slide 12

As was just mentioned, the MIPS Final Score is derived from performance in the (4) performance categories which are individually weighted on a 100 point scale. These performance category weights were designed to shift through program year 2019. In 2017, Quality was worth 60%, Advancing Care Information was worth 25%, Improvement activities was worth 15% of the MIPS Final Score and the Cost performance category was weighted at 0%. These performance category weights have changed slightly for program year 2018 with Quality worth 50%, Cost worth 10%, Improvement Activities worth 15% and Advancing Care Information worth 25% of the MIPS Final Score.

Slide 14

If applicable based on performance, adjustments to a clinician’s or group’s Medicare Part B reimbursement rate is applied 2 years after the performance year, as was the case in the former legacy programs, Meaningful Use and PQRS. So the 2018 performance year affects the 2020 payment year. MIPS, for the most part, has been designed to be budget neutral, so ECs receiving negative rate adjustments pay for those receiving positive rate adjustments. Unlike in the previous legacy programs, the adjustments are linear based on the Final Score as compared to set performance threshold. Adjustments in the second performance year can range anywhere between negative 5% and positive 5%. As previously mentioned, those scoring in the bottom 25% of total participants will automatically be adjusted down to the maximum penalty for that program year. Higher scores receive proportionally larger rate increases, up to three times the maximum positive adjustment for that year. This 3 times modifier will be used to maintain budget neutrality. The best performers will also be eligible for something called the “Exceptional Performance Bonus”, an additional pool of $500 million dollars a year to be awarded to top program performers. Clinicians in the top 25% of total participants may receive up to an additional 10% increase in reimbursement rates as a reward for outstanding performance. This means that in future years of the program, ECs have the potential to receive a 37% increase in Medicare reimbursement rates.

Slide 18

Within the QPP, there are 3 types of Alternative Payment Models.

At the top we have Advanced APMs, a term established by CMS which denotes those APMs which have the greatest financial risks for providers and also offer the greatest potential for rewards. Three criteria need to be met for an APM to be deemed an Advanced APM. First, 50% or more of the APMs participants must use certified EHR technology or CEHRT. The entity must report and at least partially base clinician payments on quality measures which are comparable to those available to participants of MIPS. Finally, and perhaps most importantly, to be an Advanced APM, participants must bear “more than nominal risk” for monetary losses for poor performance. This level of risk is defined as the lesser of 8% of total Medicare revenues or 3% of total Medicare expenditures. Current examples of Advanced APMs include, but are not limited to, Medicare Shared Savings Program ACOs Tracks 2 and 3, Next Generation ACOs, the Comprehensive ESRD Care Model, and the Oncology Care Model Track 2. A complete listing of available Advanced APMs can be found at QPP.CMS.GOV. Advanced APM benefits include shared savings, flexible payment bundles and other desirable features, none of which are altered by the Quality Payment Program. As previously mentioned, the QPP adds additional financial incentives on top of the current APM payment model. In 2019 through 2024, ECs significantly participating in Advanced APMs will receive a lump sum bonus equal to 5% of their Medicare Part B reimbursements for the measurement year. Additionally, starting in 2026, annual baseline Medicare payment updates will be higher for Advanced APM participants than for MIPS participants. Finally, since Advanced APMs include their own requirements for EHR use and quality reporting, Advanced APM participants are exempt from participating in the MIPS track of the Quality Payment Program.

Next we have Qualified Medical Homes which are Certified Medical Home models which have been expanded under CMS authority. They have different risk structures than the previous category but are otherwise treated as Advanced APMs. To date, the Comprehensive Primary Care Plus or CPC+ program is the only Medical Home model available which qualifies as an Advanced APM.

Finally we have MIPS APMs, which make up the vast majority of current APMs available, including the Medicare Shared Savings Program Track 1 ACOs. To qualify as a MIPS APM, the entity must participate in a model under an agreement with CMS. It must include at least one MIPS eligible clinician on a participant list. And finally, the APMs payment model must be based on performance against cost and quality measures. The Advanced APM benefits do not apply to MIPS APMs. Their members must participate in MIPS to receive any favorable payment adjustments. They do not qualify for the 5% lump sum bonus and are not eligible for the higher baseline annual updates beginning 2026. There are, however, still significant program benefits for participating in a MIPS APM. In 2018, most MIPS APM participants automatically receive full credit in the Improvement Activities category of MIPS. They still receive the shared savings rewards built into the APMs payment model and these clinicians are eligible for MIPS rate increases, which continue indefinitely versus the limited 6 years planned for the 5% Advanced APM lump sum bonuses.