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Tuesday Feb 02, 2016

MIPS: A Primer on the New Payment Model

Most of you are well aware that Congress repealed the flawed sustainable growth rate (SGR) in 2015 through the enactment of the Medicare Access and CHIP Reauthorization Act (Public Law 114-10). However, many of you probably have asked the questions, "What now?" and "What does this mean for me and my practice?"

Although we should celebrate the elimination of the flawed SGR, the AAFP recognizes fully that the implementation of the new delivery and payment models outlined in MACRA will require a series of important decisions and actions by family physicians. To assist you and your practices, the AAFP is launching a concerted education effort aimed at providing information and resources on how this new law impacts you and your practice and how you can best position your practice for success under this new payment policy. We will be sharing information and resources on our MACRA resource web page

MACRA established two distinct payment systems for physicians. Those two systems are the Merit-Based Incentive Payment System (MIPS) and the alternative payment model (APM) program. This post is focused on the MIPS system, but I will be writing about the APM in an upcoming post.  

As noted in my previous post, the implementation of the new payment policies is set for 2019. However, the performance year that will determine your payments in 2019 will start as early as 2017. This means we have a lot of ground to cover in the next 12 months.

MIPS Performance Evaluation
The MIPS program, by design, is based on the fee-for-service model. However, the program deviates from current practices whereby all services are paid on the standard Medicare physician fee-schedule. The law incorporates and aligns the three current physician quality and performance improvement programs -- physician quality reporting system (PQRS), value-based modifier (VBM), and meaningful use (MU) -- into a single performance program. This new program will establish a single score on a per physician basis versus continuing the fragmented three-part performance evaluation and penalty programs that exists under current law.  

The MIPS program creates a robust quality and performance improvement program that will evaluate and score physician performance in four distinct areas -- quality, resource utilization, meaningful use, and clinical practice improvement activities. Each of these activities is assigned a percentage of the total composite score as follows:

MIPS Category 2019 2020 2021
Quality 50% 45% 30%
Resource Utilization 10% 15% 30%
Meaningful Use 25% 25% 25%
Clinical Practice Improvement 15% 15% 15%

A few observations on the valuation of the MIPS performance categories:

  • The values for meaningful use and clinical practices improvement activities remain consistent while the value percentages for resource utilization increase during the three-year period.
  • The law places an increasing emphasis on resource utilization over time. Note that the values for quality measurement decrease in proportion to the increases in the values for resource utilization.
  • The law allows the HHS secretary to decrease the values for meaningful use and shift those values to other categories if it is determined that the proportion of physicians who are meaningful users of electronic health records is 75 percent or greater.
  • Any physician who practices in a certified patient-centered medical home will receive the full 15 percent for the clinical practice improvement activity. The law does not define "certified" and the AAFP will be working to influence this definition as the law is implemented. 

MIPS Payment Adjustments
The performance threshold is established annually based on the mean or median of the composite performance scores during the performance period. The law prohibits any type of look-back at existing programs as a means of establishing the initial performance threshold and instead defers this authority to the secretary of HHS for the first two performance years.

Once a physicians' composite score is determined, that score will be weighed against the performance threshold and a payment adjustment will be established for the next payment year. Physicians will receive positive, neutral, or negative payment adjustments up to the allowed percentages for the specific program year, which are outlined in the following chart:


2019 2020 2021 2022
Maximum Positive Adjustment +4% +5% +7% +9%
Maximum Negative Adjustment -4% -5% -7% -9%

A few observations on the MIPS payment adjustments:

  • We anticipate that CMS will continue to use a two-year look back period to determine payments. This means that payments for 2019 will be based on performance in 2017. Payments in 2020 will be based on performance in 2018 and so on. The AAFP has serious concerns with the two-year look back period and will be advocating that this time frame be shortened significantly.
  • MIPS adjustments are budget neutral, meaning that there will be equal numbers of positive and negative payment updates. 
  • Physicians scoring in the lowest quartile will automatically be adjusted down to the maximum penalty for the performance year. Physicians scoring at the threshold will receive no adjustment. Physicians scoring in the highest quartile are eligible for a potential positive payment adjustments up to the maximum outlined in the chart above. The highest performers will receive proportionally larger incentive payments, up to three times the maximum positive adjustment for the year. 
  • For years 2019-2024, the law establishes a $500 million bonus pool designed to provide additional incentives of up to 10 percent for "exceptional performers."
  • Unfortunately, the law does not provide a definition of an "exceptional performer," so we will be working closely with CMS to establish this definition.

Exemptions
The law established three exemptions from participation in the MIPS program. Those exemptions are:

  • The physician is participating in the Medicare program for the first time. Under this scenario, the physician is exempt from MIPS for the first year of Medicare participation.
  • The physician is participating in an eligible alternative payment models and qualifies for incentive payments through that program.
  • The physician does not see a large enough number of Medicare patients and falls below the established volume threshold for participation.

I recognize that this is a substantial amount of information. I encourage you to review the AAFP’s MACRA FAQ document as well as our APM-MIPS comparison tool.

This is an initial introduction to the MIPS program. I understand that it will likely raise more questions than it answers, but that is a good thing. We need you to raise questions so we can develop materials and resources to assist you and your practice.

Posted at 07:00AM Feb 02, 2016 by Shawn Martin

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ABOUT THE AUTHOR



Shawn Martin, AAFP Senior Vice President of Advocacy, Practice Advancement and Policy.

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The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.