to qp, or not to qp - That is Still the Question

Coral did not create this witty title. Another consulting firm wrote a blog with a similar title when the Quality Payment Program (QPP) first emerged with the concept of Qualifying Participants (QPs) in 2017. The idea behind QPP was to give special status to those entities moving into downside risk and taking accountability for the cost and health outcomes of their patient population. By virtue of being a QP, participants were exempt from the Merit Based Incentive Payment System (MIPS) - a comprehensive quality reporting framework that determined the way all other physicians were paid. This was the plan for continuing to encourage the move away from fee-for-service (FFS) and towards value. And every year, the Physician Fee Schedule (PFS) updates QPP including what it takes to be a QP and the requirements for MIPs.

For the last 6 years, participating in an advanced alternative payment model (AAPM) and taking on a certain degree of financial risk, could earn an APM entity and by association, those APM participants, the title of QP. To earn this distinction of QP, the APM was required to meet a threshold % of Medicare dollars that flowed through the APM or a minimum % of patients. In other words, participating in an APM with downside risk needed to be a dominant part of an entity’s business and care delivery model. The numbers have creeped up over time but for 2023, that threshold number is half of the APM’s revenue or 35% of the Traditional Medicare patients seen by the providers participating in that APM.

So why did any entity consider aiming for QP status? For one, shifting to a population health mindset and participating in an Accountable Care Organization (ACO) that rewards physicians for keeping patients healthy is a better way to deliver care and is a priority for CMS. By 2030, CMS aims for every person with Traditional Medicare to be in an accountable care relationship. Towards that end, for the last 6 years, if an entity like an ACO was designated as a QP, all participant providers in that APM entity received a 5% bonus on Medicare Part B revenue. This was the method CMS was using to drive Medicare and the U.S. health care system as a whole towards that tipping point away from pure FFS incentives. The theory was that once the tipping point was reached, participation would be reward enough and an extra bonus should no longer be necessary.

The 2022 Performance Year was supposed to be that tipping point where the bonus was phased out. We were not there. Commerical insurance and Medicaid predominantly rely on FFS.  And even in traditional Medicare, structural barriers still exist to making value-based payment a sustainable payment mechanism.  Growth in ACOs has slowed somewhat over the last 5 years for a number of reasons, including the requirement that ACOs move to downside risk, the public health emergency, inflation and other economic pressures facing potential APM participants. Significant advocacy from value-based participants led to an extension of only one year – 2023, at a reduced rate -3.5%

Now health care professionals are making decisions about participation in accountable care models for 2024.  There is no QP bonus and only a slight increase of .75% to your physician fee schedule if you decide to participate in an advanced APM. We are at the part of the story where participation in this type of care delivery model and the ability to receive shared savings in exchange for being at risk is supposed to be enough of a driver to move the industry.

There is one additional carrot that entities have been using to recruit physicians into their risk bearing ACOs. If you are a QP, you do not have to participate in onerous MIPS quality reporting. You are blissfully exempt. However, this may be going away. The just released 2024 PFS just proposed determining QP status at the individual clinician level and meeting threshold requirements at the individual clinician level.

What does this mean in practice if finalized for 2024: Each clinician participating in an Advanced Alternative Payment Model like ACO REACH or MSSP Track E, or Enhanced, will need to meet the 2024 Threshold requirements of 75% of their Medicare FFS payments from patients assigned to their ACO or 50% of a provider’s Medicare FFS patients assigned to the ACO. This is a hard threshold to meet for many physicians, especially non-primary care physicians. The carrot of a MIPs exemption is no longer guaranteed and may go the way of the Part B bonus.

For CMS to meet its ambitious 2030 goals, it will need to seriously consider the interplay between the QPP and their APM offerings to entice providers to join the fray and stay there. When designed and implemented well, value-based care and payment gives providers opportunities to innovate on care delivery and team-based care, hire care managers, invest in infrastructure, and seek out partnerships with community-based organizations. But the dollars and cents need to work. Even when it is the right thing to do, change is hard and expensive. By eliminating the AAPM Bonus and making QP determinations at the individual provider level, many of those clinicians may need an extra push to say YES on the existential question—to QP or not to QP.

For more information on the 2024 Proposed PFS Rule, please email us at info@coralhealthadvisors.com