Proposed 2015 PFS: Quality Updates

SCGX1423 08/14 Proposed 2015 PFS: Quality Updates Johnson & Johnson Health Care Systems Inc. Providing services for: Janssen Biotech, Inc. Janssen Pharmaceuticals, Inc August, 2014

This document is presented for informational purposes only and is not intended to provide reimbursement or legal advice. Laws, regulations, and policies concerning reimbursement are complex and are updated frequently. While we have made an effort to be current as of the issue date of this document, the information may not be as current or comprehensive when you view it. In addition, this information does not represent any statement, promise, or guarantee by Johnson and Johnson Health Care Systems Inc. about coverage, levels of reimbursement, payment, or charge. Please consult with your payer organization(s) for local or actual coverage and reimbursement policies and determination processes. Please consult with your counsel or reimbursement specialist for any reimbursement or billing questions specific to your institution. CPT copyright 2013 American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association. SCGX1423 08/14 2

Physician Quality Reporting System Value-Based Payment Modifier Medicare Shared Savings Program Physician Compare SCGX1423 08/14 3

PHYSICIAN QUALITY REPORTING SYSTEM SCGX1423 08/14 4

National Quality Strategy What is the Physician Quality Reporting System (PQRS)? Overarching Aims Priorities Quality Domains Quality Measures Patient Safety Person/Caregiver-Centered Experience/Outcomes Communication and Care Coordination Effective Clinical Care Community/Population Health Efficiency and Cost Reduction ACO Value Modifier Destination: Value-Based Care PQRS SCGX1423 08/14 5

PQRS Payment Adjustments Last year to earn a PQRS incentive payment (0.5%) 2014 2015 2016 2017 Payment adjustment -1.5% Payment adjustment -2.0% Payment adjustments are determined by performance of 2 years prior 2016 adjustment is based on 2014 performance 2017 adjustment is based on 2015 performance Patient Protection and Affordable Act (ACA), Pub. L. No. 111-148, 3002, (Mar. 23, 2010); CMS. Physician Quality Reporting System (PQRS) Overview, at: http://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/pqrs/downloads/pqrs_overviewfactsheet_2013_08_06.pdf Accessed July 27, 2014. SCGX1423 08/14 6

Medicare Physicians Practitioners Therapists Doctor of Medicine Physician Assistant Physical Therapist Doctor of Osteopathy Advanced Practice Registered Nurses* Occupational Therapist PQRS Eligible Professionals Doctor of Podiatric Medicine Doctor of Optometry Clinical Social Worker Clinical Psychologist Qualified Speech- Language Therapist Doctor of Chiropractic Registered Dietician * Includes: Doctor of Oral Surgery Doctor of Dental Medicine Nutrition Professional Audiologist Nurse Practitioner Clinical Nurse Specialist Certified Nurse Midwife Certified Registered Nurse Anesthetist and Anesthesiology Assistant CMS. Physician Quality Reporting System (PQRS) List of Eligible Professionals, at: http://www.cms.gov/medicare/quality-initiatives-patient- Assessment-Instruments/PQRS/Downloads/PQRS_List-of-EligibleProfessionals_022813.pdf. Accessed July 26, 2014. SCGX1423 08/14 7

Percent of EPs Participating in PQRS, by Specialty 60% 50% 40% 30% 20% Derm GI Onc/Hem Rheum Uro 10% 0% 2009 2010 2011 2012 CMS. 2012 Reporting Experience Including Trends (2007-2012): Physician Quality Reporting System and Electronic Prescribing (erx) Incentive Program, Table A8, at: http://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/pqrs/downloads/2012-pqrs-and-erx- Experience-Report.zip. Accessed August 1, 2014. SCGX1423 08/14 8

Summary of 2015 Proposed Changes Revises PQRS individual measures - adds 28 and deletes 73 individual measures for total of 240 - reclassifies some measures to different domains - changes the allowable reporting methods for some measures Revises PQRS measures groups - adds 2 and deletes 5 measures groups for total of 22 - redefines a measures group as a minimum of 6 measures Introduces cross-cutting measures Refines reporting criteria for some reporting mechanisms CMS, Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models, and Other Revisions to Part B for CY 2015, Proposed Rule, 79 Fed. Reg. 40,391 (July 11, 2014). SCGX1423 08/14 9

What are cross-cutting measures? a proposed set of 18 measures that commonly apply to patients across specialties intended to obtain quality data on more varied aspects of a practice for EPs/groups that see at least one Medicare patient in a face-to-face encounter* where applicable, would be required to report at least 2 cross-cutting measures^ Sample Proposed Quality Cross-Cutting Measures NQS Domain Measure Title and Description Rationale Effective Clinical Care Patient Safety Controlling High Blood Pressure: Percentage of patients 18-85 years of age who had a diagnosis of hypertension and whose blood pressure was adequately controlled (<140/90 mmhg) during the measurement period. Falls: Screening for Falls Risk: Percentage of patients 65 years and older who were screened for future fall risk at least once during the measurement period. Identified as a cross-cutting measure as it represents patient care that is clinically appropriate for many EPs treating adult patients. This measure is applicable to most adult patients in various outpatient settings Represents a fall risk screening assessment that most EPs may perform and is applicable to most elderly patients. This screen tool may be commonly used by providers serving the patient population in a variety of outpatient settings *general office visits, outpatient visits and surgical procedures ^ in addition to other reporting requirements 79 Fed. Reg., at 40,395; 40,404-40,409. SCGX1423 08/14 10

Proposed Cross-Cutting Measures NQS Domain Measure Title Other Quality Reporting Programs Community/Population Health Tobacco Use and Help with Quitting Among Adolescents Community/Population Health Tobacco Use: Screening and Cessation Intervention ACO, MU-2, Million Hearts* Community/Population Health Childhood Immunization Status MU-2 Community/Population Health Screening for Clinical Depression and Follow-Up Plan ACO, MU-2 Patient Safety Documentation of Current Medications in the Medical Record ACO, MU-2 Community/Population Health Body Mass Index (BMI) Screening and Follow-Up ACO, MU-2 Communication/ Care Coordination Closing the Referral Loop: Receipt of Specialist Report MU-2 Communication/ Care Coordination Medication Reconciliation Community/Population Health Influenza Immunization ACO, MU-2 Community/Population Health Pneumonia Vaccination Status for Older Adults ACO, MU-2 Community/Population Health Screening for High Blood Pressure and Follow-Up Documented ACO, MU-2, Million Hearts Patient Safety Screening for Fall Risk ACO, MU-2 Person/Caregiver Experience/Outcomes Communication/ Care Coordination Communication/ Care Coordination Care Plan Pain Assessment and Follow-Up Functional Outcome Assessment Person/Caregiver Experience/Outcomes CAHPS for PQRS Clinician/Group Survey ACO Effective Clinical Care Controlling High Blood Pressure ACO, MU-2, Million Hearts Community/Population Health Screening for Hepatitis C Virus (HCV) for Patients at High Risk Table 21: Proposed Individual Quality Cross-Cutting Measures for the PQRS, Fed. Reg., at 40,404-40,409. *national initiative to prevent heart attacks and strokes; http://millionhearts.hhs.gov/about_mh.html Key: ACO Accountable Care Organization MU-2 Meaningful Use Stage 2 SCGX1423 08/14 11

Specialty Measure Sets Cardiology Emergency Medicine Gastroenterology General Practice/Family Internal Medicine Multiple Chronic Conditions Obstetrics/Gynecology Oncology/Hematology Ophthalmology Pathology Radiology Surgery PQRS Measures Codes website, at: http://www.cms.gov/medicare/quality-initiatives-patient-assessment-instruments/pqrs/measurescodes.html. Accessed August 3, 2014. SCGX1423 08/14 12

2014 PQRS Measures: Oncology/Hematology 1 PQRS # Description NQS Domain 71 Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen/Progesterone Receptor Positive Breast Cancer 2 Effective Clinical Care 72 Colon Cancer: Chemotherapy for AJCC Stage III Colon Cancer Patients 2 Effective Clinical Care 102 Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate Cancer Patients Efficiency/Cost Reduction 104 Prostate Cancer: Adjuvant Hormonal Therapy for High Risk Prostate Cancer Patients Effective Clinical Care 110 Preventive Care and Screening: Influenza Immunization 2 Community/Population Health 130 Documentation of Current Medications in the Medical Record 2 Patient Safety 143 Oncology: Medical and Radiation Pain Intensity Quantified 2 Patient Experience/Outcomes 144 Oncology: Medical and Radiation Plan of Care for Pain 2 Patient Experience/Outcomes 156 Oncology: Radiation Dose Limits to Normal Tissues Patient Safety 194 Oncology: Cancer Staged Documented 2 Effective Clinical Care 226 Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention 2 Community/Population Health 67 Hematology: MDS * and Acute Leukemias: Baseline Cytogenic Testing Performed on Bone Marrow Effective Clinical Care 68 Hematology: MDS : Documentation of Iron Stores in Patients receiving Erythropoietin Therapy Effective Clinical Care 69 Hematology: Multiple Myeloma: Treatment with Biophosphonates Effective Clinical Care 70 Hematology: Chronic Lymphocytic leukemia (CLL): Baseline Flow Cytometry Effective Clinical Care * Myelodyplastic Syndrome 1 This list is not intended to be all-inclusive. Additional PQRS measures may apply depending upon patient co-morbidities and general health status. 2 These 8 measures are included in the Oncology Measures Group CMS. (January, 2014). 2014 Physician Quality Reporting System (PQRS) Measures List, at: http://www.cms.gov/medicare/quality-initiatives-patient- Assessment-Instruments/PQRS/MeasuresCodes.html, Accessed August 2, 2014. SCGX1423 08/14 13

Proposed 2015 PQRS Measures: Oncology/Hematology 1 PQRS # Description NQS Domain 71 Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen/Progesterone Receptor Positive Breast Cancer 2 Effective Clinical Care 72 Colon Cancer: Chemotherapy for AJCC Stage III Colon Cancer Patients 2 Effective Clinical Care 102 Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate Cancer Patients Efficiency/Cost Reduction 104 Prostate Cancer: Adjuvant Hormonal Therapy for High Risk Prostate Cancer Patients Effective Clinical Care 110 Preventive Care and Screening: Influenza Immunization Community/Population Health 130 Documentation of Current Medications in the Medical Record Patient Safety 143 Oncology: Medical and Radiation Pain Intensity Quantified 2 Patient Experience/Outcomes 144 Oncology: Medical and Radiation Plan of Care for Pain 2 Patient Experience/Outcomes 156 Oncology: Radiation Dose Limits to Normal Tissues Patient Safety 226 Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention Community/Population Health 67 Hematology: MDS * and Acute Leukemias: Baseline Cytogenic Testing Performed on Bone Marrow 3 Effective Clinical Care 68 Hematology: MDS : Documentation of Iron Stores in Patients receiving Erythropoietin Therapy 3 Effective Clinical Care 69 Hematology: Multiple Myeloma: Treatment with Biophosphonates 3 Effective Clinical Care 70 Hematology: Chronic Lymphocytic leukemia (CLL): Baseline Flow Cytometry 3 Effective Clinical Care * Myelodyplastic Syndrome 1 This list is not intended to be all-inclusive. Additional PQRS measures may apply depending upon patient co-morbidities and general health status. 2 Proposes 4 measures for the oncology component of the Potential Oncology/Hematology Preferred Specialty Measure Set 3 Proposes 4 measures for the hematology component of the Potential Oncology/Hematology Preferred Specialty Measure Set 79 Fed. Reg., at 40,464; CMS, Potential Oncology/Hematology Preferred Measure Set, at: http://www.cms.gov/medicare/quality-initiatives-patient-assessment- Instruments/PQRS/Downloads/Potential_Oncology_Hematology_Preferred_Specialty_Measure_Set_07_01_2014_508.pdf. Accessed August 3, 2014. SCGX1423 08/14 14

How can practices prepare? Eligibility Method Requirements Systems Reimbursed under PFS Eligible professional Claims Registry EHR Qualified Clinical Data Registry (QCDR) Group Practice Reporting Option (GPRO) Individual measures Measures Groups Domain alignment Specific measure sets Specs Office processes Contract vendors PQRS feedback reports PQRS Website: http://www.cms.gov/medicare/quality-initiatives-patient-assessment- Instruments/PQRS/index.html SCGX1423 08/14 15

Quality program penalties are additive Payment Adjustment Period 0.0% -1.0% 2015 2016 2017-1.5% -2.0% -2.0% % Downward Adjustment* -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% -1.0% -1.0% -2.0% -2.0% -3.0% -4.0% VM Penalty MU Penalty PQRS Penalty -9.0% VM MU PQRS -10.0% Value Modifier * does not include any sequestration impact Meaningful Use Physician Quality Reporting System Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the Requirement for Termination of Non-Random Prepayment Complex Medical Review and Other Revisions to Part B for CY 2013, Final Rule, 77 Fed. Reg. 69323-69324 (November 16, 2012); Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014, 78 Fed. Reg. 74770 (December 10, 2013); 79 Fed. Reg., at 40506. SCGX1423 08/14 16

Summary PQRS participation is the basis for the Value Modifier 2015 is the PQRS performance period for 2017 payment adjustments There are many options for PQRS participation Medicare quality program payment adjustments are additive SCGX1423 08/14 17

VALUE-BASED PAYMENT MODIFIER SCGX1423 08/14 18

What is the Value-Based Payment Modifier (VM)? Transforms Medicare to an active purchaser of higher quality, more efficient health care Passive Payer Active Purchaser Value Purchaser by providing differential payment* to physicians based on quality of care compared to cost Quality Cost * under the Physician Fee Schedule (PFS) Patient Protection and Affordable Act (ACA), Pub. L. No. 111-148, 3007, (Mar. 23, 2010). SCGX1423 08/14 19

Summary of Proposed Changes for 2015 1 Apply to non physician eligible professionals (EPs) Apply to solo practitioners and groups of 2 or more Apply to participants in Medicare Shared Savings Programs and others Require quality-tiering for all Category I (PQRS reporters) participants Increase the amount of payment at risk from (-2.0%) to (-4.0%) Exempt solo practitioners & groups of 2-9 from downward adjustment due to quality-tiering 2 1 The CY 2017 payment adjustment is based on CY 2015 performance 2 During their first payment year: 2017 CMS, Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models, and Other Revisions to Part B for CY 2015, Proposed Rule, 79 Fed. Reg. 40,493 (July 11, 2014). SCGX1423 08/14 20

When does the Value Modifier apply? Value modifier applies to physician groups >100 Value modifier applies to physician groups >10 Value modifier applies to all physicians CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 Performance period for physician groups of 100 or more Performance period for all physicians (proposal adds groups of 2-9, solo practitioners and non-physician EPs) Performance period for physician groups of 10 or more (adds groups of 10-99) 42 CFR 414.1215; 79 Fed. Reg. at 40493 40495. SCGX1423 08/14 21

Who does the Value Modifier impact? Eligible Professionals (EPs) Included in Group Definition Subject to VM 2015 and 2016 Subject to VM Proposed 2017 Medicare Physicians Doctor of Medicine X X X Doctor of Osteopathy X X X Doctor of Podiatric Medicine X X X Doctor of Optometry X X X Doctor of Oral Surgery X X X Doctor of Dental Medicine X X X Doctor of Chiropractic X X X Practitioners (non-physician) Physician Assistant X X Nurse Practitioner X X Clinical Nurse Specialist X X Certified Registered Nurse Anesthetist X X Certified Nurse Midwife X X Clinical Social Worker X X Clinical Psychologist X X Registered Dietitian X X Nutrition Professional X X Audiologist X X Therapists Physical Therapist X X Occupational Therapist X X Qualified Speech-Language Pathologist X X SCGX1423 08/14 22

How does the Value Modifier work? PQRS participation CMS calculations Composite Scores Compare to national mean Quality Tiering Group Practice Reporting Option (GPRO) 50% EPs meet individual requirement Individual reporting Cost measures* Total per capita costs Medicare Spending Per Beneficiary (MSPB) Quality Cost High Average Low Bonus No adjustment Penalty Total per capita costs for specific conditions Outcome Measures^ * include all FFS payments made under Medicare Part A and Part B, but do NOT include Part D ^ 1) All Cause Readmissions; 2) Acute Prevention Quality Indicators Composite (bacterial pneumonia, urinary tract infection, dehydration), and 3) Chronic Prevention Quality Indicators Composite (Chronic Obstructive Pulmonary Disease, heart failure, diabetes) 42 CFR 414.1220-414.1260; 79 Fed. Reg., at 40496 40497; 40509. SCGX1423 08/14 23

Value Modifier Quality-Tiering Methodology Clinical Care Patient Experience Population/Community Health Patient Safety Quality of Care Composite Score Care Coordination Efficiency VALUE MODIFIER AMOUNT Total per capita costs (plus MSPB*) Total per capita costs for beneficiaries w/ specific conditions * Medicare Spending per Beneficiary Cost Composite Score Physician Value-Based Payment Modifier Website: http://www.cms.gov/medicare/medicare-fee-for-service- Payment/PhysicianFeedbackProgram/ValueBasedPaymentModifier.html SCGX1423 08/14 24

How are beneficiaries attributed? General Step 1: Plurality of primary care 1,2 by primary care providers 3 MSPB Plurality of Part B claims 2 Step 2: Plurality of primary care 1,2 by non-primary care physicians 3 days prior, 30 days post inpatient hospitalization 1 includes evaluation and management (E/M) visits in office, other outpatient, skilled nursing facility, and home settings 2 as measured by allowable charges 3 Internal Medicine, Family Practice, General Practice and Geriatric Medicine physicians; NPs, PAs and CNSs 42 CFR 414.1240; 79 Fed. Reg., at 40509 40511. SCGX1423 08/14 25

Proposed CY 2017 Value Modifier Category I Category II All physicians PQRS Reporters Non PQRS Reporters Mandatory quality tiering -4% (downward adjustment) Upward* or no adjustment Solo practitioners and groups of 2-9 EPs Groups with 10 or more EPs Upward*, downward^ or no adjustment *Maximum +4.0x for top performers ^Maximum -4.0%;for CY 2017, solo practitioners and groups of 2-9 will be held harmless from the quality tiering downward adjustment The Value Modifier does not apply to drugs 79 Fed. Reg., at 40495 40497; 40505. SCGX1423 08/14 26

How does the Value Modifier impact payment? Proposed CY 2017 Quality Tiering* Quality/Cost Low Cost Average Cost High Cost High Quality +4x* +2x* No adjustment Average Quality +2x* No adjustment -2.0% Low Quality No adjustment -2.0% -4.0% * Groups and solo practitioners are eligible for an additional +1.0x if reporting PQRS measures and the average beneficiary risk score is in the top 25% x = to be determined based on budget neutrality; calculations will be done after the performance period has ended *Note: in CY 2017, downward payment adjustments will not apply to groups of 2-9 or solo practitioners 79 Fed. Reg., at 40494, 40505 40506. SCGX1423 08/14 27

How can practices prepare? Participate in PQRS Access QRUR Stay Informed Review requirements Select measures Select reporting mechanism Implement systems https://portal.cms.gov Review the quality report card Assess for areas of improvement Plan and implement actions Final 2015 PFS Rule Specialty societies CMS Value Modifier page Medicare Learning Network MLN Connects video: Value-Based Payment Modifier: What Medicare Eligible Professionals Need to Know in 2014 http://www.cms.gov/outreach-and-education/outreach/npc/npc-video-presentations-items/2014-06-06-value-based- Payment-Modifier.html?DLPage=1&DLSort=0&DLSortDir=descending ACA 3007, 3003; Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Pub. L. No. 110-275, 131 (July 15, 2008); 79 Fed. Reg., at 40494 40497. SCGX1423 08/14 28

Value Modifier cost measure formulas do not include Medicare Part D Medicare Part A Medicare Part B Medicare Part D Value Modifier Cost Measures Exclusion of Part D expenses may: create financial incentives that can adversely influence clinical care potentially introduce bias to physician-patient joint decision making 79 Fed. Reg., at 40,511. SCGX1423 08/14 29

Recommendations As CMS works to refine the Value Modifier cost measures formulas, the agency and other Federal Policy Stakeholders should consider options, such as: Treat all drugs equally: exclude both Part B and Part D drug costs Exclude Part B drugs from the calculation until a full impact assessment, with public input on the design and findings, can be completed and evaluated. Exclude Part B drug costs for disease states when there is a Part D alternative. Exclude Part B drug costs that exceed a certain dollar threshold Treat all drugs equally: include all Part B and Part D drug costs SCGX1423 08/14 30

Summary The Value Modifier (VM) applies to all physicians in 2017 2015 is the performance period for 2017 payment adjustments Medicare quality program payment adjustments are additive VM cost measures include Medicare Parts A and B but not Part D SCGX1423 08/14 31

PHYSICIAN COMPARE SCGX1423 08/14 32

What is Physician Compare? http://www.medicare.gov/physiciancompare/search.html Physician demographics Denotes Board certification Indicates participation in PQRS, erx and EHR Incentive program Beginning to report limited quality performance data http://content.govdelivery.com/accounts/uscms/bulletins/c4935a SCGX1423 08/14 33

What performance data is currently reported? Diabetes Mellitus DM3: Blood Pressure Control in Patients with Diabetes DM10: Hemoglobin A1c Control (<8%) DM11: Daily Aspirin Use for Patients with Diabetes and Ischemic Vascular Disease (IVD) DM12: Tobacco Non-Use Coronary Artery Disease CAD7: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Patients with CAD and Diabetes and/or Left Ventricular Systolic Dysfunction (LVSD) Physician Compare web site: http://www.medicare.gov/physiciancompare/search.html. Accessed July 27, 2014. SCGX1423 08/14 34

The Proposed Rule proposes expansion to data reporting at Physician Compare Groups Individuals All PQRS GPRO measures via the GPRO Web Interface, Registry, & Claims and for group-level measures ACOs Benchmarks (mirroring Shared Savings Program) Consumer Assessment of Healthcare Providers & Systems (CAHPS) for PQRS and CAHPS for ACOs Twenty 2013 Individual-level PQRS measures All 2015 Individual-level PQRS measures via Registry, EHR, & Claims Benchmarks for PQRS QCDRs Measures Data Individual or Aggregate PQRS or Non-PQRS CMS, Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models, and Other Revisions to Part B for CY 2015, Proposed Rule, 79 Fed. Reg. 40,389-40,391 (July 11, 2014). SCGX1423 08/14 35

Summary Physician Compare publicly reports physician quality data Current reporting is limited to group data for select measures The proposed rule expands data reporting for groups and individuals SCGX1423 08/14 36

How to Comment on the Proposed 2015 PFS Rule: Electronically at http://www.regulations.gov To locate the rule and begin the comment process, enter CMS-2014-0094-0002 in the search function By mail to: Centers for Medicare & Medicaid Services Department of Health and Human Services Attention: CMS 1612 P P.O. Box 8013 Baltimore, MD 21244-8013 Comments must be received by no later than: 5:00 PM EST on September 2, 2014 SCGX1423 08/14 37