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THE VIEW AHEAD. . .

A GUIDE TO GETTING STARTED WITH CMS’S NEW QUALITY PAYMENT PROGRAM.

JOHN RUMPAKIS, O.D., M.B.A.

THE YEAR 2017 marks: the fourth year of the Affordable Care Act, the first update of the ICD-10, Meaningful Use 3 and, most notably, the initial implementation of the Merit-Based Incentive Payment System (MIPS). Preparation for all of the aforementioned changes is key. Here’s how.

WHAT IS MIPS?

When Medicare Access and CHIP Reauthorization Act (MACRA) passed in 2015, it mandated that three major Medicare programs for physicians – the Physician Quality Reporting System (PQRS), the EHR Incentive Program and the Value-Based Payment Modifier (VM) Program — be combined. Currently, these programs reward or penalize physicians based on measures of quality and the ability to demonstrate certain capacities within a practice. Starting in 2019, these three CMS programs will be consolidated into a single program, called MIPS.

In a January 2015 press release, the U.S. Department of Health and Human Services (HHS) announced a goal of “tying 30% of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements” — a goal it has already achieved, according to a March press release. In addition, it outlined goals of “tying 50% of payments to these models by the end of 2018,” “85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018 . . .,” all according to the January 2015 news release.

HOW IT’S CALCULATED

MIPS defines four categories of physician performance contributing to a Composite Performance Scale (CPS) of up to 100 points – based on these weights:

• Quality (50%)

• Advancing Care Information (ACI) (formerly meaningful use) (25%)

• Clinical Practice Improvement Activities (CPIA) (15%)

• Resource Use (10%)

MIPS payment adjustments will be applied to Medicare Part B payments two years after the performance year. So with 2017 being the first performance year, 2019 is the first adjustment year. (Individual CPS will be released to the public each year by CMS, as it advances its initiative for transparency of the quality of health care.)

The “adjustments” made to your Part B payments can vary quite a bit as depicted in the chart (where X = Budget Neutrality Factor, a multiplier calculated so that MIPS incentive pool dollars equal the total MIPS penalty pool). An additional 10% for exceptional performance bonus is also at play.

For calendar-year 2018, an upto 15% incentive to a maximum -5% penalty creates a total 20% top-to-bottom swing. For the calendar-year 2020, payment adjustments could reach 9% x 3.0 + 10%, where 3 equals the budget neutrality factor and 10% is an exceptional performance bonus, or as low as -9%, for a total 46% top-to-bottom swing.

HOW TO PARTICIPATE

How you choose to participate today can significantly affect your revenues two years from now, so it is important to choose wisely. For the 2017 performance year, there are four ways for organizations to either participate in or be exempt from MIPS to ease the transition. Here is a summary of your options:

1. Report some data, avoiding a negative payment adjustment. (Awaiting final rule.)

2. Submit full performance data (ACI, Quality and CPIA – Resource Use is based on claims data and calculated by CMS) for a portion of the 2017 calendar year and potentially qualify for a positive payment adjustment. (Awaiting final rule.)

3. Prepare a full year of performance data for maximum reimbursement potential.

4. Participate in an advanced alternative payment model, such as a Medicare Shared Savings Track 2 or 3 ACO, which has both an upside and a downside in terms of financial risk, and is exempt from MIPS.

Important to note: Organizations that participate in any one of the four options will not receive a penalty for the 2017 performance year, while organizations that opt not to participate are subject to a -4% adjustment.

MOVING FORWARD

I’m certain that 2017 will prove to be another interesting year. Thoughtful, objective business decisions in 2017 will impact your ability to provide care in the future and the rate at which you will get paid for said care. OM

DR. RUMPAKIS is founder, president and CEO of Practice Resource Management, Inc., a consulting, appraisal and management firm for healthcare professionals. Email him at John@PRMI.com, or visit tinyurl.com/OMcomment to comment on this article.