Many clinicians, myself included, recall CMS’ Sustainable Growth Rate (SGR) formula and Congress’ two decades of intervention to stop reimbursement decreases. In 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) replaced the SGR formula with two tracks to choose from in CMS’ Quality Payment Program: the Merit-based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs).
Today, we have the benefit of a few years under the MACRA model, and that has changed our original perspective. In 2015, we thought it could be financially viable to remain in MIPS without transitioning to an APM. The statement was based on data, which projected that the upside of MIPS would be considerably more than the 4 or 5% we are currently seeing.
Now I advise clinicians that MIPS—really, the four categories that comprise MIPS—creates a “glide path” into APMs. By that I mean that when physicians implement efficient processes through the MIPS’ categories of Advancing Care Information and Improvement Activities, they are more likely to achieve good outcomes within the Quality and Cost categories.
Success within risk-based APMs depends on providing the highest quality at the lowest costs. And when it comes to success, we are hearing from CMS that the administration is more interested in the “what” than the “how.” I discussed this change and other MACRA details in a recent webinar with Valinda Rutledge, MBA, MS, senior advisor to Sg2, a Vizient company. She provided a wealth of knowledge on CMS regulations, with more than 15 years as a health care CEO and as an architect of one of the Bundled Payments for Care Improvement (BPCI) initiatives.
Rutledge explained a key difference between MIPS and APM known as budget neutrality. Unlike an APM, which is funded by a 5% lump-sum bonus on a physician’s Medicare Part B billing, MIPS is funded by penalties assessed within the MIPS program. In 2015, it was projected that more penalties would be levied. But in 2017, CMS made it easier to avoid penalties, responding to comments from small practices. This was good news for many people.
“What that has done, then, is to decrease the amount of funding available for anyone who scores positively,” Rutledge said. The average MIPS payment for 2019 is slated to be roughly $238 annually per physician. This does not include the bonus pool of $500 million for the top decile of MIPS participants, who are eligible for the bonus by earning 70 or more points in 2018.
MIPS: Changes in 2018 final rule
A recent informal poll of approximately 60 webinar participants showed that more than one-third of them participate in MIPS, with another 21% currently in MIPS and planning to move to APMs. With this in mind, here are some important MACRA changes for 2018:
- The low-volume threshold, which is the point at which CMS may exclude MACRA participation, was increased in 2018 to at least $90,000 in Medicare Part B billing and more than 200 Part B beneficiaries. This is up from $30,000/100 in 2017. Physicians excluded from MACRA in 2018 cannot qualify for the final 0.5% increase in Medicare Physician Fee Schedule, which happens in 2019.
- The 2018 MIPS payment adjustment is +/- 5%, up one percentage point from 2017. Those scoring positively can earn 5%, while those with penalties can lose 5%.
- The minimum number of points in 2018 to avoid the 5% MIPS penalty is 15. This is up from three points in 2017. In addition, a small practice bonus of 5 points and a complex patient bonus of 5 points have been added for 2018.
- Two of MIPS’ four pillar weights changed in the final 2018 rule: Quality is now 50%, down from the prior 60%, and Cost is 10%, up from the previous 0%. Improvement Activities and Advancing Care Information were unchanged in 2018 at 15 and 25%, respectively. The 10% weight in the Cost category is meant to slowly move the percentage closer to the mandated 30%, which had been slated to take effect in 2019, but has been delayed.
“If you’re in MIPS, the focus right now should be to ensure that you go over the 15-point threshold. Make sure you are well above that for the final calculation. But I wouldn’t spend a lot of time and energy looking at how you maximize your MIPS scores. It’s sort of a dead-end road,” Rutledge said in the webinar. “What you need to be doing is focusing on selecting MIPs variables that will assist you in being successful in a value-based initiative and ultimately moving into an Advanced APM. This would require you to select quality indicators that are outcome-based and to carefully analysis your cost report.”
Moving into a qualified Advanced APM
For clinicians and practices ready to assume more risk in the value-based paradigm, there are a variety of qualifying Advanced APMs from which to choose. To qualify, an APM must have these characteristics. In addition, clinicians must qualify by meeting certain criteria to receive a lump sum bonus of 5% on their Medicare Part B billing. For a health system that employs a large number of clinicians, the qualified APM participation could mean several million to distribute versus $238 a year per provider in 2019 under MIPS.
For clinicians and practices, participation in a qualified APM means building capabilities to manage some level of risk. This can be accomplished by focusing on MIPS’ Advancing Care Information and Clinical Practice Improvement categories, which I call the process “buckets.” (Remember my glide-path analogy?) Good organizational structure and processes in these two categories will improve performance in the outcomes categories of quality and resource utilization.
There needs to be good use of electronic medical records and medical technology within the Advancing Care Information “bucket.” There also should be good processes for case management, care coordination and team-based care in the Improvement Activities “bucket.” If these categories are done well, then the outcomes of Quality and Cost are likely to respond inversely with higher quality and lower cost, which is what’s needed for APM success.
Among the new APMs as of February 2018 was the Bundled Payments for Care Improvement (BPCI) Advanced initiative. CMS received an incredible number of applications, and the reason is simply for the first time, that will qualify as an advanced alternative payment model. Many of the specialty physicians, such as cardiologists, orthopedics, pulmonologists, etc. are very interested in being part of BPCI Advanced.
“You don’t want to go too quickly into a risk-based contract to the point you’re not ready for it and you lose a lot of money,” Rutledge told our webinar audience. “You want to do it very deliberately, very thoughtfully and look at it from a long-range perspective, and not just focus on how to optimize your MIPS score.”
Preparing hospitals and physicians to meet the ever-changing demands of a value-based world is challenging. You may want to consider a comprehensive data and reporting solution to achieve a superior level of performance, critical to both payments and public reporting.
To learn more, check out our webinar on how to maximize performance for MACRA Quality Payment Programs in 2018, where you’ll hear insights into the changing requirements, components of the MIPS cost pillar and the outlook for advanced alternative payment models.
If you're interested in learning more about the changing landscape of value-based reimbursement and how to stay ahead of updates, check out the second webinar in our series, “Leveraging Care Coordination Strategies and Technology to Improve Ambulatory Care Quality.” You'll hear key insights from Vizient members who are using collaborative strategies to improve care coordination across an episode of care.
About the author. As senior vice president, performance management, Robert Dean leads the Vizient Transformation of Clinical Practice Initiative team and the Vizient Practice Transformation Network. He is also responsible for providing medical leadership and expertise across a range of clinical, advisory and nursing projects as well as development of interprofessional practice resources.