What is MIPS, and are you eligible for it?

By John Murphy, MDLinx
Published August 9, 2016

Key Takeaways

The Medicare and CHIP Reauthorization Act of 2015 (MACRA) repealed the unwieldy Sustainable Growth Rate (SGR) formula for determining Medicare payments, and replaced it with a new framework to reward Medicare-enrolled health professionals for providing better care, not more just more care.

This new framework streamlines multiple quality reporting programs into one new program: the Merit-based Incentive Payment System (MIPS). This new program combines parts of the Physician Quality Reporting System (PQRS), the Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) incentive program.

“If you participate in any of the quality reporting programs being sunset by MIPS, check in on your reporting and incentive payment timelines to make sure that you have a smooth transition into MIPS and have fulfilled all of the requirements of your current program,” wrote Ryann Roberts, MPH, for The Lazy Company

MIPS is slated to begin in January 2017 and will provide payment adjustments based upon a performance score. The payment adjustments from 2017 will occur in 2019.

These payment adjustments will reflect a provider’s ability to meet or exceed a performance benchmark, which will be established by the Centers for Medicare and Medicaid Services (CMS).

Are you eligible?

MACRA set up certain eligibility criteria for MIPS. To participate, you must:

  1. Not be in your first year of providing services to Medicare beneficiaries.

  2. Have more than 100 Medicare patients.

  3. Have more than $10,000 claims charges.

  4. Not participate in an Alternative Payment Model (APM).

Eligible clinicians can participate either as an individual provider or as part of a provider group. (A group is defined by one taxpayer identification number [TIN], and will be assessed as a group practice across all four MIPS performance categories.)

How does it work?

MIPS will provide payment adjustments based upon a composite score calculated from 4 performance categories:

  • Quality: (Accounts for 50% of the overall MIPS score) Choose 6 measures to report to CMS that best reflect your practice. One of these measures must be an outcome measure or a high-value measure, and one must be a cross-cutting measure.

  • Advancing care information: (25% of the overall MIPS score) Report key measures of interoperability and information exchange. You’ll be rewarded for your performance on measures that matter most to you.

  • Clinical practice improvement activities:(15% of the overall MIPS score) Choose from more than 90 clinical practice improvement activities best suited for your practice. Clinicians participating in medical homes earn “full credit” in this category.

  • Resource use:(10% of the overall MIPS score) CMS will calculate these measures based on claims and availability of sufficient volume. You won’t need to report anything.

Together, these 4 performance categories make up your overall Composite Performance Score (CPS). So, you’ll want to familiarize yourself with the details of how they are calculated. Also, compare them to what your practice is already doing and reporting.

Where do payment adjustments fit in?

Under MIPS, your payment adjustment percentage will be based on the relationship between your CPS and a performance threshold to be determined by CMS. Unlike SGR, MACRA aims to reach budget neutrality through increases, decreases, or hiatuses in incentive payments based upon a number of factors.

“For MIPS, these factors are the performance scores compared to the pre-set benchmarks CMS will determine,” Ms. Roberts explained. “Therefore, there is a chance that providers will actually feel the impact of their performance scores without congressional intervention, as was the norm with the SGR.”

So, if your CPS is above the performance threshold, you’ll have a neutral or positive payment adjustment. If your CPS is below the performance threshold, you’ll see a negative payment adjustment.

A CPS less than or equal to 25% of the performance threshold will yield the maximum negative adjustment of -4%. On the other hand, a CPS at or above the threshold will yield a payment adjustment of 0% to +12%, based on the degree to which your CPS exceeds the threshold.

Bonus points: Clinicians with “exceptional performance” whose CPS is equal to or greater than an “additional performance threshold” (defined as the 25th quartile of possible values above the CPS performance threshold) will receive an additional bonus (not to exceed 10%) applied to payments.

The potential maximum adjustment percentage will increase each year as the program is implemented. Specifically, the maximum adjustments will range from -4% to 4% in 2019, from -5% to 5% in 2020, and from -7% to 7% in 2021. Starting in 2022 and beyond, the maximum payment adjustments will range from -9% to 9%. “This sliding scale of adjustments will increase both the risk and the rewards associated with meeting or exceeding performance,” Ms. Roberts wrote.

For additional information to prepare for MIPS and the Quality Payment Program, visit the QPP website at CMS.gov.

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