MMA649_Design

MEDICARE CARE MANAGEMENT PERFORMANCE DEMONSTRATION
Section 649 of the Medicare Prescription Drug, Improvement,
And Modernization Act of 2003 (MMA)
Demonstration Summary

GOAL
The goal of this demonstration is to establish a 3-year pay-for-performance pilot with small and
medium sized physician practices to promote the adoption and use of health information
technology to improve the quality of patient care for chronically ill Medicare beneficiaries.
Doctors who meet or exceed performance standards established by CMS in clinical quality
performance will receive an incentive payment for managing the care of eligible Medicare
beneficiaries. Practices that are able to report this data to CMS electronically will be eligible for
an additional incentive.

DEMONSTRATION SITES
The demonstration will be implemented in Arkansas, California, Massachusetts and Utah in
conjunction with the Doctor’s Office Quality Information Technology (DOQ-IT) Project in those
states. Participation is voluntary, but in order to participate in the demonstration, practices must
be enrolled in the DOQ-IT program. The Quality Improvement Organizations (QIOs) will
provide technical assistance to practices enrolled in the DOQ-IT program that are also enrolled in
the demonstration.
In addition to the above, practices must also meet the following requirements in order to
participate in the demonstration:
•

The practice must be the main provider of primary care to at least 50 Medicare
beneficiaries with Medicare Part A and B coverage under the traditional Medicare feefor-service program (i.e. not enrolled in a Medicare Advantage or other Medicare health
plan). CMS will use claims data to determine how many patients receive the
predominance of their primary care services from a practice.

•

Only those physicians providing primary care will be included in the demonstration.
Practices with specialists that are not eligible may still participate as a practice if they
meet other requirements. Nurse practitioners and physicians assistants who provide
primary care services are not eligible for payment under the demonstration, but if they
bill Medicare independently, their claims may be included in determining which
practices provide the predominance of primary care for a beneficiary.

•

Physicians must practice in a solo or small to medium-sized physician group practice,
which is defined as up to ten physicians. Although this is not an absolute cut-off, CMS
reserves the right to limit the number of practices participating, and preference will be
given to smaller practices.

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•

The practice must bill for Medicare services through a Medicare carrier (not a fiscal
intermediary) using a HCFA 1500 form or electronic equivalent.

CLINICAL QUALITY PERFORMANCE MEASURES
Practices participating in the MCMP demonstration will be financially rewarded for reporting
quality measures and meeting clinical quality performance standards for treating patients with
diabetes, congestive heart failure, and coronary artery disease. In addition, they will be measured
on how well they provide preventive services (immunizations, blood pressure screening and
cancer screening) to high risk chronically ill Medicare beneficiaries. Table 1 provides a list of the
26 measures to be used. Most of these measures will be familiar to physicians as they have been
used by health plans and other organizations for several years. The majority of these measures
are endorsed by the Ambulatory Quality Alliance (AQA) and/or the National Quality Forum
(NQF).
Practices will be asked to submit data annually on their patients on each of these measures.
•

The demonstration will begin with a ‘pay-for-reporting’ component. Practices will be
required to submit the quality measurement data for 2006 to establish a demonstration
baseline. 1 Payment will not be contingent upon actual scores on the measures, but on the
number of beneficiaries for whom they report information.

•

Subsequently, following each of the three demonstration years, practices will receive an
incentive payment that is tied to the scores achieved on the quality measures. Data
collection for each of the demonstration years will begin approximately 3-4 months after
the end of the demonstration year (June 30th), allowing sufficient lag time for the vast
majority of claims for that demonstration year to have been processed. Practices that are
not initially able to submit data on all of the measures can still participate in the
demonstration, but will not be eligible for the full incentive payment.

•

CMS will calculate all of the measures that can be calculated using claims based data, but
some measures will require data from a patient’s medical record.

CMS will provide as much information as possible to practices, including identification of
which patients are eligible for each measure based on Medicare claims data, to limit the amount
of medical record abstraction that is required. CMS will also provide an electronic reporting tool
to facilitate this process. There is no fee for using this tool or submitting the data.

1

New practices that were not operational in 2006, and therefore are not able to report baseline data, will not be
required to do so but will also not be eligible to receive the initial incentive payment.

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Those practices that have a CCHIT 2 -certified electronic medical record system and are able to
abstract and submit the data electronically will be eligible for an additional incentive over and
above the amount earned based on their actual performance on the clinical quality measures.
Details regarding the data submission and validation process will be provided to
participating practices at a demonstration “kick-off” meeting to be held next spring in
each of the demonstration states. Training and technical assistance will be available from both
the QIOs and CMS’s contractors during the course of the demonstration.
All of the data submitted by any of the practices as part of this demonstration will be kept strictly
confidential. No personally identifiable data on any beneficiaries or details regarding the
performance of individual practices will be made public.

PAYMENT MODEL
Payment under the demonstration consists of 3 components:
1. An initial payment for reporting baseline clinical quality measures;
2. An annual payment for performance based on a practice’s score on the clinical
measures; and
3. An additional annual bonus payment if some or all of the measures are reported
electronically from a CCHIT-certified electronic health record system.

Initial Payment for Reporting Clinical Quality Measures
In the first year, the demonstration will include a “pay for reporting” incentive to provide
baseline information on the clinical quality measures and to help physicians become familiar
with the quality measurement data collection process. Practices will be eligible to earn up to
$1000 per physician (up to $5000 per practice) based on the number of beneficiaries for whom
quality measure data is reported. For this baseline data collection only, payment will not be
contingent upon a practice’s scores on the quality measures. In addition, while the measures may
be submitted electronically, for this initial incentive, there is no bonus for electronic submission
of the data. The quality measures for which data will be reported are listed in Table 1. It is
projected that this data will be submitted early in the first demonstration year (data collection
during the summer 2007 for calendar year 2006) so that payments can be made within the first
six months of the demonstration.
Annual Incentive Payment Based on Performance on Clinical Quality Measures
2

CCHIT (Certification Commission for Healthcare Information Technology) is the recognized certification
authority for electronic health records and their networks, and is an independent, voluntary, private sector
initiative.

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Subsequently, on an annual basis for each of the three years of the demonstration, practices will
be eligible to earn an incentive payment of up to $10,000 per physician per year (up to $50,000
per practice per year) based on the practice’s scores on the clinical quality measures during the
demonstration year. Data will be collected approximately four months after the end of each
demonstration year 3 , allowing sufficient lag time so that claims data is complete. CMS will
compare each practice’s score on each of the relevant clinical measures to an established
threshold 4 . Practices will be able to earn up to 5 points for each measure, depending upon their
individual score. Within each category (diabetes, coronary artery disease, congestive heart failure
and preventive services), the scores on all of the measures will be added up to calculate a
composite score representing the percentage of total possible points earned. Based on this
composite percentage, practices will be able to earn up to $70 for each patient with each of the
specific disease categories and $25 per patient with any chronic disease for scores on the
preventive measures. Practices that score 90% or more of the potential points in a category will
be eligible for the full per beneficiary payment in that category. Practices that score less than
30% of the available points in a category 5 will not be eligible to earn any incentives for that
category. Between these two end points, the payment level earned will be prorated.
Annual Bonus Payment for Submitting Clinical Quality Measure Data Electronically
Those practices with a CCHIT-certified electronic health record system that are able to abstract
and submit the data to CMS electronically will be eligible to increase the ‘pay for performance’
payment by up to 25%, or $2,500 per physician (up to $12,500 per practice) per year 6 . The
amount of this additional payment will be prorated based on the number of measures that are
submitted electronically. For example, practices that are able to submit half of the measures
electronically from a CCHIT-certified electronic health record and submit the other half of the
measures manually through the abstraction tool will be eligible for 50% of the additional bonus
or 12.5% (50% x 25%).
Example of Incentive Calculation for a Sample Practice
CMS will use Medicare claims data to assign patients to practices based on which practice
provided the greatest number of primary care visits to the patient during the reporting year. In the
chart below, the sample practice provided primary care services to 75 Medicare beneficiaries
with one of a range of specified chronic conditions. Of these 75, 25 had diabetes (DM), 15 had

3

The demonstration year will run July 1 – June 30. After allowing three months for claims to be processed, and
some time for CMS and its contractors to aggregate and prepare the data, practices can expect to be collecting the
data in the fall following the end of each year. For example, data for the first demonstration year, July 1, 2007- June
30, 2008, will be collected in the mid-late fall of 2008.
4
In the first year, practices that meet the top quartile of the most current Medicare HEDIS performance data will
score full points for the measure. Where HEDIS standards are not available for a measure, a 75 percent compliance
rate will be used as the threshold for full points.
5
During the second and third years of the demonstration, the minimum required percentage of points to earn any
payment will be raised to 40% and 50%, respectively.
6
Practices that have an electronic medical record system which is not CCHIT certified may still submit the data
electronically if they are able to do so, but they will not be eligible for the additional bonus payment. In addition, the
bonus for electronic submission will not be applied to the initial incentive payment for submission of the baseline
data.

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congestive heart failure (CHF), and 15 had CAD. 7 A patient with multiple chronic conditions is
counted in each applicable category.
Our sample practice achieved a composite score of 95% on the diabetes measures- above the
90% level and, therefore, high enough to earn 100% of the incentive payment for this category.
The composite scores on the CHF and Preventive care measures are 71% and 72%, respectively.
For CAD, it scored only 27%, which is below the minimum level to earn any incentive payment
for that category at all. The composite scores are then prorated to determine the percent of the
incentive payment earned.
The chart below shows how the payment is calculated. The number of eligible patients in each
category is multiplied by the full per beneficiary payment rate and then by the prorated
composite quality score percentage in that category.
Practices will be eligible to receive up to $10,000 per physician (up to $50,000 per practice) for
each year of the demonstration for meeting the clinical performance standards.
If this practice had a CCHIT-certified electronic medical record system and submitted the data to
CMS electronically, it would be eligible for a 25% bonus, over and above what it has earned
based on scores on the clinical quality measures. The total payment for the year would then be:
$4083.70 x 1.25 = $5,104.63
If the practice had submitted only some of the measures electronically, the additional bonus
payment for the year would be reduced proportionately.

Total Payment
Adding all of the incentives together, over the course of the three-year demonstration,
physicians will be able to earn up to $38,500 (up to $192,500 per practice) for reporting the
baseline data, meeting the quality standards, and being able to submit the data electronically.
The determination of the payment amount in each year of the demonstration will be independent
of every other year. Payments will be calculated retrospectively based on claims data submitted
during the demonstration year as well as the clinical data from the medical record that is
submitted by the practice.

7

Patients with a claim during the reporting year with any of the following diagnoses will be counted in the “any
chronic disease” category: congestive heart failure, coronary artery disease, stroke, atrial fibrillation, atherosclerosis,
diabetes, Alzheimer’s disease and/or senile dementia, depression, kidney disease, COPD , emphysema, asthma,
rheumatoid arthritis, osteoporosis, and cancer. This count of patients with a chronic disease will be used to calculate
payment of the clinical incentive on the preventive services measures. Patients counted for the specific disease
measures (diabetes, coronary artery disease, congestive heart failure) will be a subset of this group.

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SAMPLE PRACTICE
DM
CHF
CAD
25
15
15
# Medicare
Patients
$70
$70
$70
Payment Per
Patient
8
7
6
# Quality
Measures in
Category
40
35
30
Maximum
Possible Points
38
25
8
Points earned
95 %
71 %
27 %
Composite
Quality Score
100 %
79.4 %
0%
% Incentive
(over 90th
(prorated)
(below minimum
Earned
percentile)
30th percentile)
$70 x 100 % X
$70 x 79.4 % X
$0
Total Payment
25 = $1750
15 = $833.70
$1750.00 + $833.70 + $1500.00 = $4083.70
Total Payment
for Clinical
Performance
Bonus for
electronic
$4083.70 x 25% = $1020.93
reporting of all
measures from
a CCHITCertified EHR
Total Payment

PC
75
$25
5

25
18
72 %
80 %
(prorated)
$25 x 80 % X 75
= $1500

$4083.70 + 1020.93= $5,104.63

TIME LINE
CMS will be recruiting physicians to participate in this demonstration through the QIOs during
the winter of 2007. The first operational year of the demonstration will begin on July 1, 2007.
All practices that sign up to participate in the demonstration will be invited to an informational
“kick off” meeting in their state in the late spring of 2007.
Below are some time frames to keep in mind for the first 18 months of the demonstration.
Winter / Early Spring 2007
• Physicians and practices participating in DOQ-IT program submit completed
applications to participate in demonstration. Applications should be submitted no
later than April 15, 2007 to receive full consideration.

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•

CMS notifies practices of selection to participate in demonstration.

Late spring 2007
• Demonstration “kick-off” meetings in each state (dates and locations to be
announced).
• Practices register for QNET exchange so that clinical measures data may be
transmitted securely.
Summer 2007
• Clinical performance measures data collected for the baseline year (2006).
Late Fall 2007
• CMS calculates and sends to practices initial incentive for reporting baseline data.
Fall 2008
• Clinical performance measures data collected for the first demonstration year (July
2007- June 2008)
Winter 2008/2009
• CMS calculates and sends to practices incentive payment for performance on clinical
measures during first demonstration year..

FOR MORE INFORMATION
For more information about the demonstration, please check the demonstration web site:
http://www.cms.hhs.gov/DemoProjectsEvalRpts/MD/itemdetail.asp?filterType=none&fil
terByDID=-99&sortByDID=3&sortOrder=ascending&itemID=CMS057286
Physician practices should also contact their local Quality Improvement Organization for more
information about DOQ-IT or the demonstration.
If you have additional questions, you may also email the CMS Demonstration Project Officer at:
[email protected] .

Table 1: Clinical Quality Measures in the MCMP Demonstration

Diabetes

Heart Failure

Coronary Artery Disease

Preventive Care
(measured on population
with specified chronic
diseases)

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DM-1 HbA1c
Management
DM-2 HbA1c
Control
DM-3 Blood
Pressure
Management
DM-4 Lipid
Measurement
DM-5 LDL
Cholesterol
Level
DM-6 Urine
Protein Testing
DM-7 Eye
Exam

HF-1 Left Ventricular
Function Assessment
HF-2 Left Ventricular
Ejection Fraction
Testing
HF-3 Weight
Measurement

CAD-1 Antiplatelet
Therapy
CAD-2 Drug Therapy for
Lowering LDL Cholesterol

PC-1Blood Pressure
Measurement
PC-5 Breast Cancer
Screening

CAD-3 Beta Blocker
Therapy – Prior MI

PC-6 Colorectal Cancer
Screening

HF-5 Patient
Education
HF-6 Beta Blocker
Therapy

CAD-5 Lipid Profile

PC-7 Influenza
Vaccination
PC-8 Pneumonia
Vaccination

HF-7 ACE
Inhibitor/ARB
Therapy
HF-8 Warfarin
Therapy for Patients
with AF

CAD-7 ACE
Inhibitor/ARB Therapy

CAD-6 LDL Cholesterol
Level

DM-8 Foot
Exam

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Diabetes Mellitus
1. HbA1c Management – The percentage of diabetic patients with one or more A1c tests
2. HbA1c Control - The percentage of diabetic patients with a most recent A1c level >9.0%
(poor control)
3. Blood Pressure Management - The percentage of diabetic patients with a most recent BP
< 140/90 mmHg
4. Lipid Measurement – The percentage of diabetic patients with at least on low-density
lipoprotein (LDL) cholesterol test
5. LDL Cholesterol Level - The percentage of diabetic patients with a most recent LDL
cholesterol <130 mg/dl
6. Urine Protein Testing - The percentage of diabetic patients with at least one test for
microalbumin during the measurement year; or who had evidence of medical attention
for existing nephropathy (diagnosis of nephropathy or documentation of
microalbuminuria or albuminuria)
7. Eye exam - The percentage of diabetic patients who received a dilated eye exam or
evaluation of retinal photographs by an optometrist or ophthalmologist during the
measurement year, or during the prior year (this measure is adapted for claims data
measurement).
8. Foot exam - The percentage of diabetic patients receiving at least one complete foot
exam (visual inspection, sensory exam with monofilament, and pulse exam).
Congestive Heart Failure
1. Left Ventricular Function Assessment- The percentage of CHF patients who have
quantitative or qualitative results of LVF assessment recorded.
2. Left Ventricular Ejection Fraction Testing - The percentage of CHF patients hospitalized
with a principle diagnosis of heart failure during the current year who had left
ventricular ejection fraction testing during the current year.
3. Weight measurement – The percentage of CHF patients with weight measurement
recorded.
4. Patient Education- The percentage of CHF patients who were provided with patient
education on disease management and health behavior changes during one or more
visit(s) within a six month period.
5. Beta-Blocker Therapy – The percentage of CHF patients who also have LVSD who were
prescribed beta-blocker therapy.

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6. ACE Inhibitor Therapy - The percentage of CHF patients who also have LVSD who were
prescribed ACE inhibitor therapy.
7. Warfarin Therapy for Patients with Atrial Fibrillation – The percentage of CHF patients
who also have paroxysmal or chronic atrial fibrillation who were prescribed warfarin
therapy.
Coronary Artery Disease
1. Antiplatelet Therapy – The percentage of CAD patients who were prescribed antiplatelet
therapy.
2. Drug Therapy for Lowering LDL Cholesterol - The percentage of CAD patients who
were prescribed a lipid-lowering therapy (based on current ATP III guidelines).
3. Beta-Blocker Therapy – The percentage of CAD patients with prior MI who were
prescribed beta-blocker therapy.
4. Lipid Profile – The percentage of CAD patients receiving at least one lipid profile during
the reporting year.
5. LDL Cholesterol Level- The percentage of CAD patients with most recent LDL
cholesterol <130 mg/dl.
6. ACE Inhibitor Therapy - The percentage of CAD patients who also have diabetes and/or
LVSD who were prescribed ACE inhibitor therapy.
Preventive Care
1. Blood Pressure Screening – The percentage of patients’ visits with blood pressure
measurement recorded.
2. Breast Cancer Screening – The percentage of female beneficiaries aged 50-69 years who
had a mammogram during the measurement year or the year prior to the measurement
year.
3. Colorectal Cancer Screening- The percentage of beneficiaries 50 years or older who
were screened for colorectal cancer during the one year measurement period.
4. Influenza Vaccination – The percentage of patients with a chronic condition 50 years or
older who received an influenza vaccination from September through February of the
year prior to the measurement year.
5. Pneumonia Vaccination – The percentage of patients with a chronic condition 65 years
or older who ever received a pneumococcal vaccination.

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